MUTUAL FUND TRUST, 485BPOS, 1997-12-29

MUTUAL FUND TRUST
485BPOS, 1997-12-29

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As filed via EDGAR with the Securities and Exchange Commission
on December 29, 1997

File No. 811-8358
Registration No. 33-75250
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|

Pre-Effective Amendment No. |_|

Post-Effective Amendment No. 11 |X|

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Post-Effective Amendment No. 11 |X|
------------------------------
MUTUAL FUND TRUST
(Exact Name of Registrant as Specified in Charter)

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

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

<TABLE>
<CAPTION>
<S> <C> <C>
Copies to:
George Martinez, Esq. Peter Eldridge, Esq Gary S. Schpero, Esq.
Mutual Fund Trust Chemical Bank Simpson Thacher & Bartlett
125 West 55th Street 270 Park Avenue 425 Lexington Avenue
New York, New York 10019 New York, New York 10017 New York, New York 10017
- --------------------------------------------------------------------------------------

</TABLE>
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

|X| immediately upon filing pursuant to | | on ( ) pursuant to
paragraph (b) paragraph (b)
|_| 60 days after filing pursuant to |_| on ( ) pursuant to
paragraph (a)(1) paragraph (a)(1)
|_| 75 days after filing pursuant to |_| on ( ) pursuant to
paragraph (a)(2) paragraph (a)(2) rule 485.

If appropriate, check the following box:

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

------------------
The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its three series of shares under the Securities Act of
1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940 on July 18,
1994 and the Rule 24f-2 Notice for the Registrant's fiscal year ended August 31,
1997 was filed on November 25, 1997.

<PAGE>

MUTUAL FUND TRUST
Registration Statement on Form N-1A

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

VISTA(SM) SHARES
VISTA(SM) PREMIER SHARES
VISTA(SM) INSTITUTIONAL SHARES
VISTA(SM) NEW YORK TAX FREE INCOME FUND
VISTA(SM) CALIFORNIA INTERMEDIATE TAX FREE INCOME FUND
VISTA(SM) TAX FREE INCOME FUND
VISTA(SM) PRIME MONEY MARKET FUND CLASS B SHARES

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

Captions in parenthesis indicate Income Fund
Prospectus captions which do not exist in
the Money Market Fund Prospectuses.

1 Front Cover Page *

2(a) Expense Summary *

(b) Not Applicable *

3(a) Financial Highlights *

(b) Not Applicable *

4(a)(b) Fund Objectives and Investment Approach; *
(Fund Objective; Investment Policies)
Other Information Concerning the Fund(s)

(c) Fund Objectives and Investment Approach; *
Common Investment Policies (Money Market
Funds Only); (Fund Objectives; Investment
Policies)

5(a) Management *

(b) Management *

(d) Other Information Concerning the Fund(s) *

(e) Back Covers *

(f) Financial Highlights; Other Information *
Concerning the Fund(s)

5A.(a-b) Not Applicable *

6(a) Other Information Concerning the Fund(s) *

(b) Not Applicable *

-i-

<PAGE>

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

(d) Not Applicable *

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

(f) How Dividends and Distributions are Made; *
Tax Information; (How Distributions are Made;
Tax Information)

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

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

7(a) How to Buy, Sell and Exchange Shares; Other *
Information Concerning the Fund(s)

(b) How the Fund(s) Value Their (its) Shares; *
How to Buy, Sell and Exchange Shares;
Other Information Concerning the Fund(s)

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

(e) Management; Other Information Concerning *
the Fund(s)

(f) Other Information Concerning the Fund(s) Management of the
Trust and Funds

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

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

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

9 Not Applicable *
</TABLE>

-ii-

<PAGE>

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

10 * Front Cover Page

11 * Front Cover Page

12 * Not Applicable

13 Fund Objectives and Investment Approach Investment Policies and
(Fund Objectives; Investment Policies) Restrictions

14 * Management of the Trust and Funds

15(a) * Not Applicable

(b) * Principal Holders

16(a) Management Management of the Trust and Funds
</TABLE>

-iii-

<PAGE>

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

(b) Management Management of the Trust and Funds

(d) Management Management of the Trust and Funds

(e) * Not Applicable

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

(g) * Not Applicable

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

(i) * Not Applicable

17 Fund Objectives and Investment Approach; Investment Policies and
(Fund Objective; Investment Policies) Restrictions

18 Other Information Concerning the Fund(s) General Information

19(a) How to Buy, Sell and Exchange Shares *

(b) How the Fund(s) Value Their (its) Shares Determination of Net Asset
Value

</TABLE>

-iv-

<PAGE>

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

20 How Dividends and Distributions Are Made; Tax Matters
Tax Information; (How Distributions are
Made; Tax Information)

21(a) * Management of the Trust and Funds

(b) * Management of the Trust and Funds

22 * Performance Information

23 * Not Applicable
</TABLE>

Part C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.

-v-

<PAGE>

[CHASE VISTA LOGO]

PREMIER(SM) SHARES

PROSPECTUS
VISTA(SM) 100% U.S. TREASURY SECURITIES
MONEY MARKET FUND
VISTA(SM) TREASURY PLUS MONEY MARKET FUND
VISTA(SM) FEDERAL MONEY MARKET FUND
VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
VISTA(SM) CASH MANAGEMENT FUND
VISTA(SM) PRIME MONEY MARKET FUND
VISTA(SM) TAX FREE MONEY MARKET FUND

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997
This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Funds in their December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call the Vista Service Center at 1-800-622-4273. The SAI has been
filed with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference.

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

INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

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

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you pay on your Fund investment, including examples
Financial Highlights ...................................................... 6
The Funds' financial history
Fund Objectives and Investment Approach
Vista 100% U.S. Treasury Securities Money Market Fund ..................... 18
Vista Treasury Plus Money Market Fund .................................... 18
Vista Federal Money Market Fund .......................................... 18
Vista U.S. Government Money Market Fund .................................... 19
Vista Cash Management Fund ................................................ 19
Vista Prime Money Market Fund ............................................. 19
Vista Tax Free Money Market Fund .......................................... 20
Common Investment Policies ................................................ 20
Management .................................................................. 28
Chase Manhattan Bank, the Funds' adviser; Chase Asset Management and
Texas Commerce Bank, the Funds' sub-advisers
How to Buy, Sell and Exchange Shares ....................................... 28
How the Funds Value Their Shares .......................................... 32
How Dividends and Distributions Are Made; Tax Information .................. 33
How the Funds distribute their earnings, and tax treatment related to those
earnings
Other Information Concerning the Funds .................................... 34
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 37
How performance is determined, stated and/or advertised

3
<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in a Fund and is, except as
described below, based on expenses incurred in the most recent fiscal year by
each Fund. The examples show the cumulative expenses attributable to a
hypothetical $1,000 investment over specified periods.

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

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

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

<TABLE>
<CAPTION>
Vista 100%
U.S. Treasury Vista
Securities Treasury Plus
Money Market Money Market
Fund Fund
------------------ -----------------------
Premier Premier
Shares Shares
------------------ -----------------------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ................................. 0.10% 0.10%
12b-1 Fee* (after estimated waiver of fee,
where indicated) ....................................... n/a n/a
Shareholder Servicing Fee
(after estimated waiver of fee, where indicated) ...... 0.00%** 0.25%
Other Expenses (after estimated waiver of fee,
where indicated) ....................................... 0.40%**# 0.10%**#
Total Fund Operating Expenses
(after waivers of fees, where indicated) ............... 0.50%**# 0.45%**#
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 year ................................................ $ 5 $ 5
3 years ................................................ 16 14
5 years ................................................ 28 25
10 years ................................................ 63 57

<CAPTION>
Vista Vista U.S. Vista
Federal Government Cash
Money Market Money Market Management
Fund Fund Fund
----------------------- -------------- -----------------
Premier Premier Premier
Shares Shares Shares
----------------------- -------------- -----------------
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ................................. 0.10% 0.10% 0.10%
12b-1 Fee* (after estimated waiver of fee,
where indicated) ....................................... n/a 0.05%**# n/a
Shareholder Servicing Fee
(after estimated waiver of fee, where indicated) ...... 0.24%** 0.15%**# 0.18%**#
Other Expenses (after estimated waiver of fee,
where indicated) ....................................... 0.16% 0.15% 0.17%
Total Fund Operating Expenses
(after waivers of fees, where indicated) ............... 0.50%** 0.45%**# 0.45%**#
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 year ................................................ $ 5 $ 5 $ 5
3 years ................................................ 16 14 14
5 years ................................................ 28 25 25
10 years ................................................ 63 57 57

<CAPTION>
Vista Vista
Prime Tax Free
Money Market Money Market
Fund Fund
------------------ --------------
Premier Premier
Shares Shares
------------------ --------------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ................................. 0.10% 0.10%
12b-1 Fee* (after estimated waiver of fee,
where indicated) ....................................... n/a n/a
Shareholder Servicing Fee
(after estimated waiver of fee, where indicated) ...... 0.18%** 0.25%
Other Expenses (after estimated waiver of fee,
where indicated) ....................................... 0.17% 0.18%
Total Fund Operating Expenses
(after waivers of fees, where indicated) ............... 0.45%** 0.53%
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 year ................................................ $ 5 $ 5
3 years ................................................ 14 17
5 years ................................................ 25 30
10 years ................................................ 57 66
</TABLE>

* Long-term shareholders in mutual funds with 12b-1 fees, such as
holders of Premier Shares of Vista U.S. Government Money Market Fund,
may pay more than the economic equivalent of the maximum front-end
sales charge permitted by rules of the National Association of
Securities Dealers, Inc.

** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the 12b-1 Fee would be 0.10% for Vista U.S. Government Money
Market Fund, the Shareholder Servicing Fee would be 0.25% for each such
Fund, Other Expenses would be 0.45% and 0.15% for Vista 100% U.S.
Treasury Securities Money Market Fund and Vista Treasury Plus Money
Market Fund, respectively, and Total Fund Operating Expenses for Vista
100% U.S. Treasury Securities Money Market Fund, Vista Treasury Plus
Money Market Fund, Vista Federal Money Market Fund, Vista U.S.
Government Money Market Fund, Vista Cash Management Fund and Vista
Prime Money Market Fund would be 0.80%, 0.50%, 0.51%, 0.60%, 0.52% and
0.52%, respectively.
# Restated from most recent fiscal year to reflect current waiver
arrangements.

5
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Premier Share outstanding throughout the period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the period ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND

<TABLE>
<CAPTION>
Year 6/3/96*
ended through
8/31/97 8/31/96
------------ ------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00
-------- --------
Income from Investment Operations:
Net Investment Income ................................. 0.048 0.011
--------- ---------
Less Distributions:
Dividends from Net Investment Income .................. 0.048 0.011
--------- ---------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00
========= =========
TOTAL RETURN 4.91% 1.11%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............... $ 5,643 $ 227
Ratio of Expenses to Average Net Assets# ............... 0.55% 0.42%
Ratio of Net Investment Income to Average Net Assets# 4.80% 3.45%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 0.80% 0.42%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 4.55% 3.45%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

6
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Premier Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA TREASURY PLUS MONEY MARKET FUND

Year ended 4/22/94*
---------------------------------------- through
8/31/97 8/31/96 8/31/95 8/31/94
--------- -------- ------- -------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- --------- ----------
Income from Investment Operations:
Net Investment Income .............................. 0.049 0.050 0.050 0.014
--------- --------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.049 0.050 0.050 0.014
--------- --------- ---------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========== ==========
TOTAL RETURN 4.98% 5.07% 5.17% 1.37%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............... $131,334 $106,011 $ 18,572 $ 36
Ratio of Expenses to Average Net Assets# ............ 0.51% 0.52% 0.50% 0.49%
Ratio of Net Investment Income to
Average Net Assets# ................................. 4.88% 4.85% 5.23% 3.85%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 0.53% 0.63% 1.57% 0.89%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 4.86% 4.74% 4.16% 3.46%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

7
<PAGE>

FINANCIAL HIGHLIGHTS

VISTA FEDERAL MONEY MARKET FUND

Year ended 4/22/94*
---------------------------------------- through
8/31/97 8/31/96 8/31/95 8/31/94
--------- -------- -------- -------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- -------- ----------
Income From Investment Operations:
Net Investment Income .............................. 0.050 0.050 0.053 0.015
--------- --------- --------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.050 0.050 0.053 0.015
--------- --------- --------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ==========
TOTAL RETURN 5.12% 5.14% 5.40% 1.47%
Ratios/Supplemental Data:
Net Assets, end of Period (000 omitted) ............... $399,644 $248,757 $148,512 $ 55,768
Ratio of Expenses to Average Net Assets# ............ 0.50% 0.50% 0.49% 0.35%
Ratio of Net Investment Income to
Average Net Assets# ................................. 5.01% 4.99% 5.32% 4.38%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 0.52% 0.52% 0.59% 0.74%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 4.99% 4.97% 5.22% 4.00%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

8
<PAGE>

(This Page Intentionally Left Blank)

9
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Premier Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, for each of the periods commencing subsequent to
June 30, 1992, have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon is included in the Annual Report to
Shareholders. Periods ended prior to July 1, 1992 were audited by other
independent accountants.

VISTA U.S. GOVERNMENT MONEY MARKET FUND(1)

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

<TABLE>
<CAPTION>
Year Ended 11/1/93
------------------------------------- through
8/31/97 8/31/96 8/31/95 8/31/94**
--------- -------- -------- ----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- ---------- ----------
Income from Investment Operations:
Net Investment Income ........................ 0.050 0.050 0.052 0.027
--------- --------- ----------- ----------
Less Distributions:
Dividends from Net Investment Income ......... 0.050 0.050 0.052 0.027
--------- --------- ----------- ----------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= =========== ==========
TOTAL RETURN 5.08% 5.15% 5.31% 2.70%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ...... $836,520 $801,665 $ 763,609 $ 545,999
Ratio of Expenses to Average Net Assets# ...... 0.55% 0.55% 0.55% 0.55%
Ratio of Net Income to Average
Net Assets# ................................. 4.97% 5.04% 5.22% 3.13%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ................................. 0.60% 0.59% 0.59% 0.61%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 4.92% 5.00% 5.18% 3.07%

<CAPTION>
7/1/92 Year Ended
Year Ended through ------------------------------------------
10/31/93 10/31/92* 6/30/92 6/30/91 6/30/90(2)
----------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- -------------
Income from Investment Operations:
Net Investment Income ........................ 0.027 0.010 0.041(3) 0.068 0.075
----------- ---------- ------------ ----------- -------------
Less Distributions:
Dividends from Net Investment Income ......... 0.027 0.010 0.041(3) 0.068 0.075
----------- ---------- ------------ ----------- -------------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ============ =========== =============
TOTAL RETURN 2.70% 0.98% 4.68% 6.91% 8.13%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ...... $1,609,704 $ 108,505 $ 78,795 $ 193,308 $ 63,774
Ratio of Expenses to Average Net Assets# ...... 0.55% 0.58% 0.57% 0.57% 0.72%
Ratio of Net Income to Average
Net Assets# ................................. 2.66% 2.87% 4.10% 6.76% 7.46%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ................................. 0.67% 0.70% 0.64% 0.65% --
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 2.54% 2.75% 4.03% 6.68% --
</TABLE>

<PAGE>

VISTA U.S. GOVERNMENT MONEY MARKET FUND(1)

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

Year Ended
----------------------------------------
9/30/89 9/30/88 9/30/87
-------- ---------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00
-------- ---------- ----------
Income from Investment Operations:
Net Investment Income ........................... 0.083 0.065 0.058
-------- ----------- -----------
Less Distributions:
Dividends from Net Investment Income ............ 0.083 0.065 0.058
-------- ----------- -----------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00
======== =========== ===========
TOTAL RETURN 6.34% 6.54% 5.78%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ......... $84,752 $ 79,541 $ 82,068
Ratio of Expenses to Average Net Assets# ......... 0.70% 0.67% 0.64%
Ratio of Net Income to Average Net Assets# ...... 8.31% 6.54% 5.78%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# .................................... -- -- --
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ........................... -- -- --
</TABLE>

(1) Trinity Government Fund and Vista U.S. Government Money Market Fund each
reorganized as a new ortfolio of Mutual Fund Group effective January 1,
1993 in a tax-free reorganization, and subsequently were reorganized into
the Trust on October 28, 1994. The new portfolio was named Vista U.S.
Government Money Market Fund.

(2) On January 31, 1990, the Trinity Government Fund was reorganized into a
series of Trinity Assets Trust. Prior to the reorganization, the Trinity
Government Fund had been incorporated under the laws of the State of
Florida since July 10, 1980 as Pinnacle Government Fund, Inc. with a
fiscal year ended September 30. Actual per share income and capital
changes for the nine-month period ended June 30, 1990 have been annualized
in order to provide a comparison to prior years' results.

(3) Includes $0.001 short-term capital gain per share.
* In 1992 the Trinity Government Fund, the predecessor to the Vista
U.S. Government Money Market Fund, changed its fiscal year-end from
June 30 to October 31.
** In 1994 the U.S. Government Money Market Fund changed its fiscal
year-end from October 31 to August 31.
# Short periods have been annualized.

13
<PAGE>

FINANCIAL HIGHLIGHTS

VISTA CASH MANAGEMENT FUND

<TABLE>
<CAPTION>
Year 5/6/96*
ended through
8/31/97 8/31/96
------------ ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................ $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income .................................... 0.051 0.016
Less Dividends from Net Investment Income
............................................................ 0.051 0.016
Net Asset Value, End of Period .............................. $ 1.00 $ 1.00
======== ========
TOTAL RETURN 5.18% 1.61%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ..................... $375,485 $433,302
Ratio of Expenses to Average Net Assets# .................. 0.50% 0.50%
Ratio of Net Investment Income to Average Net Assets# ...... 5.07% 4.93%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ........................... 0.51% 0.52%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ............ 5.06% 4.91%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

14
<PAGE>

FINANCIAL HIGHLIGHTS

VISTA PRIME MONEY MARKET FUND

<TABLE>
<CAPTION>
Year ended 11/15/93*
----------------------------------- through
8/31/97 8/31/96 8/31/95 8/31/94
--------- --------- -------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- -------- -----------
Income from Investment Operations:
Net Investment Income ........................ 0.052 0.052 0.053 0.027
Net Realized Loss on Securities ............... -- -- (0.003) --
--------- --------- --------- -----------
Total Income from Investment Operations ...... 0.052 0.052 0.050 0.027
Voluntary Capital Contribution ............... -- -- 0.003 --
--------- --------- --------- -----------
Less Distributions:
Dividends from Net Investment Income ......... 0.052 0.052 0.053 0.027
--------- --------- --------- -----------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ===========
TOTAL RETURN 5.34% 5.32% 5.44% 2.75%
Ratios/Supplemental Data:
Net Assets, end of Period (000 omitted) ...... $499,308 $418,736 $ 62,737 $ 73,253
Ratio of Expenses to Average Net Assets# ...... 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to
Average Net Assets# ........................ 5.17% 5.18% 5.24% 3.15%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# ......... 0.53% 0.51% 0.65% 0.56%
Ratio of Net Investment Income without waivers
and assumption of expenses to Average
Net Assets# ................................. 5.09% 5.12% 5.04% 3.04%
</TABLE>

* Commencement of operations.

# Short periods have been annualized.

<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Premier Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA TAX FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------

Year
Year Year
Ended Ended Ended
8/31/97 8/31/96 8/31/95
--------- --------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.032 0.031 0.032
--------- --------- ---------
Less Distributions:
Dividends from Net Investment Income 0.032 0.031 0.032
--------- --------- ---------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN 3.19% 3.12% 3.29%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ...... $104,759 $145,221 $148,436
Ratio of Expenses to Average Net Assets# ...... 0.53% 0.58% 0.56%
Ratio of Net Investment Income to
Average Net Assets# ........................... 3.13% 3.08% 3.21%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ................................. 0.53% 0.73% 0.84%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 3.13 2.92% 2.93%

11/1/93 Year Ended 7/18/90*
through ------------------------------------ through
8/31/94** 10/31/93 10/31/92 10/31/91 10/31/90
-------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- -------- --------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.018 0.022 0.031 0.046 0.002
---------- ---------- -------- ---------- ---------
Less Distributions:
Dividends from Net Investment Income 0.018 0.022 0.031 0.046 0.002
---------- ---------- -------- ---------- ---------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ========== =========
TOTAL RETURN 1.79% 2.21% 3.09% 4.68% 6.82%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ...... $ 229,306 $ 225,791 $87,027 $ 19,174 $ 11,320
Ratio of Expenses to Average Net Assets# ...... 0.55% 0.55% 0.55% 0.55% 0.55%
Ratio of Net Investment Income to
Average Net Assets# ........................... 2.11% 2.16% 2.92% 4.39% 6.82%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ................................. 0.78% 0.79% 0.76% 0.82% 0.71%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 1.89% 1.92% 2.71% 4.12% 6.66%
</TABLE>

* Commencement of offering shares.
** In 1994 the Tax Free Money Market Fund changed its fiscal year-end
from October 31 to August 31.
# Short periods have been annualized.

17
<PAGE>

FUND OBJECTIVES AND INVESTMENT APPROACH
- ---------------------------------------
VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
The Fund's objective is to provide maximum current income consistent with
maximum safety of principal and maintenance of liquidity.

The Fund invests in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, which differ principally only in their interest rates,
maturities and dates of issuance. The Fund does not purchase securities issued
or guaranteed by agencies or instrumentalities of the U.S. Government, and does
not enter into repurchase agreements. Income on direct investments in U.S.
Treasury securities is generally not subject to state and local income taxes by
reason of federal law. The dollar weighted average maturity of the Fund will be
90 days or less.

VISTA TREASURY PLUS
MONEY MARKET FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

The Fund invests in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, which differ principally only in their interest rates,
maturities and dates of issuance. In addition, the Fund will seek to enhance
its yield by investing in repurchase agreements which are fully collateralized
by obligations issued or guaranteed by the U.S. Treasury. The dollar weighted
average maturity of the Fund will be 60 days or less.

VISTA FEDERAL MONEY
MARKET FUND
The Fund's objective is to provide current income consistent with preservation
of capital and maintenance of liquidity.

The Fund invests primarily in direct obligations of the U.S. Treasury,
including Treasury bills, bonds and notes, and obligations issued or guaranteed
as to principal and interest by certain agencies or instrumentalities of the
U.S. Government. Income on direct investments in U.S. Treasury securities and
obligations of the agencies and instrumentalities in which the Fund invests is
generally not subject to state and local income taxes by reason of federal law.
The dollar weighted average maturity of the Fund will be 90 days or less. Due
to state income tax considerations, the Fund will not enter into repurchase
agreements.
- -----------------------------------
Shareholders of the above Funds that reside in a state that imposes an income
tax should determine through consultation with their own tax advisors whether
such interest income, when distributed by the Fund, will be considered by the
state to have retained exempt status, and whether the Fund's capital gains and
other income, if any, when distributed will be subject to the state's income
tax. See "How Dividends and Distributions are Made; Tax Information."

18
<PAGE>

VISTA U.S. GOVERNMENT MONEY MARKET FUND
The Fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and maintenance of liquidity.

The Fund invests substantially all of its assets in obligations issued or
guaranteed by the U.S. Treasury or agencies or instrumentalities of the U.S.
Government, and in repurchase agreements collateralized by these obligations.
The dollar weighted average maturity of the Fund will be 60 days or less.

VISTA CASH MANAGEMENT FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and the maintenance of liquidity.

The Fund invests in high quality, short-term U.S. dollar-denominated money
market instruments. The Fund invests principally in (i) high quality commercial
paper and other short-term obligations, including floating and variable rate
master demand notes of U.S. and foreign corporations; (ii) U.S. dollar-
denominated obligations of foreign governments and supranational agencies
(e.g., the International Bank for Reconstruction and Development); (iii)
obligations issued or guaranteed by U.S. banks with total assets exceeding $1
billion (including obligations of foreign branches of such banks) and by
foreign banks with total assets exceeding $10 billion (or the equivalent in
other currencies) which have branches or agencies in the U.S. (including U.S.
branches of such banks), or such other U.S. or foreign commercial banks which
are judged by the Fund's advisers to meet comparable credit standing criteria;
(iv) securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and (v) repurchase agreements. The dollar weighted average
maturity of the Fund will be 90 days or less.

VISTA PRIME MONEY MARKET FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

19
<PAGE>

instrumentalities; and (v) repurchase agreements. The dollar weighted average
maturity of the Fund will be 60 days or less.

VISTA TAX FREE MONEY
MARKET FUND
The Fund's objective is to provide as high a level of current income which is
excluded from gross income for federal income tax purposes as is consistent
with the preservation of capital and maintenance of liquidity.

The Fund invests in a non-diversified portfolio of short-term, fixed rate and
variable rate Municipal Obligations (as defined under "Additional Investment
Policies of Vista Tax Free Money Market Fund"). As a fundamental policy, under
normal market conditions the Fund will have at least 80% of its assets invested
in Municipal Obligations the interest on which, in the opinion of bond counsel,
is excluded from gross income for federal income tax purposes and does not
constitute a preference item which would be subject to the federal alternative
minimum tax on individuals (these preference items are referred to as "AMT
Items"). Although the Fund will seek to invest 100% of its assets in such
Municipal Obligations, it reserves the right under normal market conditions to
invest up to 20% of its total assets in AMT Items or securities the interest on
which is subject to federal income tax. For temporary defensive purposes, the
Fund may exceed this limitation. The dollar weighted average maturity of the
Fund will be 90 days or less.

COMMON INVESTMENT POLICIES
- --------------------------
In lieu of investing directly, each Fund is authorized to seek to achieve its
objective by investing all of its investable assets in an investment company
having substantially the same investment objective and policies as the
applicable Fund.

Each Fund seeks to maintain a net asset value of $1.00 per share.

The Funds invest only in U.S. dollar-denominated high-quality obligations which
are determined to present minimal credit risks. This credit determination must
be made in accordance with procedures established by the Board of Trustees.
Each investment must be rated in the highest short-term rating category by at
least two national rating organizations ("NROs") (or one NRO if the instrument
was rated only by one such organization) or, if unrated, must be determined to
be of comparable quality in accordance with the procedures of the Trust. If a
security has an unconditional guarantee or similar enhancement, the issuer of
the guarantee or enhancement may be relied upon in meeting these ratings
requirements rather than the issuer of the security. Securities in which the
Funds invest may not earn as high a level of current income as long-term or
lower quality securities.

The Funds purchase only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations.

20
<PAGE>

Although each Fund seeks to be fully invested, at times it may hold uninvested
cash reserves, which would adversely affect its yield.

Vista Tax Free Money Market Fund is classified as a "non-diversified" fund
under federal securities law. This Fund's assets may be more concentrated in
the securities of any single issuer or group of issuers than if the Fund were
diversified. Each Fund other than the Vista Tax Free Money Market Fund is
classified as a "diversified" fund under federal securities laws.

There can be no assurance that any Fund will achieve its investment objective.

OTHER INVESTMENT PRACTICES
The Funds may also engage in the following investment practice, when consistent
with their overall objectives and policies. These practices, and certain
associated risks, are more fully described in the SAI.

U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest in direct obligations of the
U.S. Treasury. Each Fund other than Vista 100% U.S. Treasury Securities Money
Market Fund and Vista Treasury Plus Money Market Fund may also invest in other
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (collectively, "U.S. Government Obligations"). Certain U.S.
Government Obligations, such as U.S. Treasury securities and direct
pass-through certificates of the Government National Mortgage Association
(GNMA), are backed by the "full faith and credit" of the U.S. Government. Other
U.S. Government Obligations, such as obligations of Federal Home Loan Banks and
the Federal Home Loan Mortgage Corporation, are not backed by the "full faith
and credit" of the U.S. Government. In the case of securities not backed by the
"full faith and credit" of the U.S. Government, the investor must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the U.S. Government
itself in the event the agency or instrumentality does not meet its
commitments.

21
<PAGE>

transactions, a Fund would acquire the right to sell a security at an agreed
upon price within a specified period prior to its maturity date. A put
transaction will increase the cost of the underlying security and consequently
reduce the available yield. Each of these transactions involve some risk to a
Fund if the other party should default on its obligation and the Fund is
delayed or prevented from recovering the collateral or completing the
transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

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

STRIPS AND ZERO COUPON OBLIGATIONS. Each Fund other than Vista 100% U.S.
Treasury Securities Money Market Fund may invest up to 20% of its total assets
in stripped obligations (i.e., separately traded principal and interest
components of securities) where the underlying obligation is backed by the full
faith and credit of the U.S. Government, including instruments known as
"STRIPS". Vista Cash Management Fund, Vista Prime Money Market Fund and Vista
Tax Free Money Market Fund may also invest in zero coupon obligations. Zero
coupon obligations are debt securities that do not pay regular interest
payments, and instead are sold at substantial discounts from their value at
maturity. The value of STRIPS and zero coupon obligations tends to fluctuate
more in response to changes in interest rates than the value of ordinary
interest-paying debt securities with similar maturities. The risk is greater
when the period to maturity is longer.

22
<PAGE>

certificates of indebtedness or safekeeping. Participation certificates are pro
rata interests in securities held by others; certificates of indebtedness or
safekeeping are documentary receipts for such original securities held in
custody by others. As a result of the floating or variable rate nature of these
investments, a Fund's yield may decline and it may forego the opportunity for
capital appreciation during periods when interest rates decline; however,
during periods when interest rates increase, a Fund's yield may increase and it
may have reduced risk of capital depreciation. Demand features on certain
floating or variable rate securities may obligate a Fund to pay a "tender fee"
to a third party. Demand features provided by foreign banks involve certain
risks associated with foreign investments. The Internal Revenue Service has not
ruled on whether interest on participations in floating or variable rate
municipal obligations is tax exempt, and the Tax Free Fund would purchase such
instruments based on opinions of bond counsel.

OTHER MONEY MARKET FUNDS.
Each Fund other than Vista 100% U.S. Treasury Securities Money Market Fund may
invest up to 10% of its total assets in shares of other money market funds when
consistent with its investment objective and policies, subject to applicable
regulatory limitations. Additional fees may be charged by other money market
funds.

PORTFOLIO TURNOVER. It is intended that the Funds will be fully managed by
buying and selling securities, as well as holding securities to maturity. The
frequency of the Funds' portfolio transactions will vary from year to year. In
managing a Fund, the Fund's advisers will seek to take advantage of market
developments, yield disparities and variations in the creditworthiness of
issuers. More frequent turnover will generally result in higher transactions
costs, including dealer mark-ups.

ADDITIONAL INVESTMENT POLICIES OF VISTA CASH MANAGEMENT
FUND AND VISTA PRIME MONEY MARKET FUND
Vista Cash Management Fund and Vista Prime Money Market Fund may also invest in
the following instruments, when consistent with their overall objectives and
policies. These instruments, and certain associated risks, are more fully
described in the SAI.

BANK OBLIGATIONS. Bank obligations include certificates of deposit, time
deposits and bankers' acceptances issued or guaranteed by U.S. banks (including
their foreign branches) and foreign banks (including their U.S. branches).
These obligations may be general obligations of the parent bank or may be
limited to the issuing branch by the terms of the specific obligation or by
government regulation. Foreign bank obligations involve certain risks
associated with foreign investing.

ASSET-BACKED SECURITIES.
Asset-backed securities represent a participation in, or are secured by and
payable from, a stream of payments generated by particular assets, most often a
pool of assets similar to one another, such as

23
<PAGE>

motor vehicle receivables or credit card receivables.

MUNICIPAL OBLIGATIONS. The Funds may invest in high-quality, short-term
municipal obligations that carry yields that are competitive with those of
other types of money market instruments in which they may invest. Dividends
paid by these Funds that are derived from interest on municipal obligations
will be taxable to shareholders for federal income tax purposes.

SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES.
The Funds intend to invest a substantial portion of their assets from time to
time in securities of foreign governments and supranational agencies. The Funds
will limit their investments in foreign government obligations to commercial
paper and other short-term notes issued or guaranteed by the governments of
Western Europe, Australia, New Zealand, Japan and Canada. Obligations of
supranational agencies, such as the International Bank for Reconstruction and
Development (also known as the World Bank) are supported by subscribed, but
unpaid, commitments of member countries. There is no assurance that these
commitments will be undertaken or complied with in the future, and foreign and
supranational securities are subject to certain risks associated with foreign
investing.

CUSTODIAL RECEIPTS. The Funds may acquire securities in the form of custodial
receipts that evidence ownership of future interest payments, principal
payments or both on certain U.S. Treasury notes or bonds in connection with
programs sponsored by banks and brokerage firms. These are not deemed U.S.
Government securities. These notes and bonds are held in custody by a bank on
behalf of the owners of the receipts.

ADDITIONAL INVESTMENT POLICIES OF VISTA TAX FREE MONEY
MARKET FUND
The following provides additional information regarding the permitted
investments of Vista Tax Free Money Market Fund. These investments, and certain
associated risks, are more fully described in the SAI.

24
<PAGE>

private institutions for the construction of housing, educational or medical
facilities, and may include certain types of industrial development bonds,
private activity bonds or notes issued by public authorities to finance
privately owned or operated facilities, or to fund short-term cash
requirements. Short-term Municipal Obligations may be issued as interim
financing in anticipation of tax collections, revenue receipts or bond sales to
finance various public purposes. The Municipal Obligations in which the Fund
invests may consist of municipal notes, municipal commercial paper and
municipal bonds maturing or deemed to mature in 397 days or less.

The two principal classifications of Municipal Obligations are general
obligation and revenue obligation securities. General obligation securities
involve a pledge of the credit of an issuer possessing taxing power and are
payable from the issuer's general unrestricted revenues. Their payment may
depend on an appropriation by the issuer's legislative body. The
characteristics and methods of enforcement of general obligation securities
vary according to the law applicable to the particular issuer. Revenue
obligation securities are payable only from the revenues derived from a
particular facility or class of facilities, or a specific revenue source, and
generally are not payable from the unrestricted revenues of the issuer.
Industrial development bonds and private activity bonds are in most cases
revenue obligation securities, the credit quality of which is directly related
to the private user of the facilities.

From time to time, the Fund may invest more than 25% of the value of its total
assets in industrial development bonds which, although issued by industrial
development authorities, may be backed only by the assets and revenues of the
non-governmental issuers such as hospitals or airports, provided, however, that
the Fund may not invest more than 25% of the value of its total assets in such
bonds if the issuers are in the same industry.

MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the
Fund may invest contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease or installment payments in future
years unless money is later appropriated for such purpose. The Fund will limit
its investments in non-appropriation leases to 10% of its assets. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove difficult.
Certain investments in municipal lease obligations may be illiquid.

25
<PAGE>

LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Funds limit
investment risks for their shareholders. These regulations and restrictions
prohibit each Fund from: (a) with certain limited exceptions, investing more
than 5% of its total assets in the securities of any one issuer (this
limitation does not apply to the Tax Free Fund or to U.S. Government
Obligations held by the other Funds); (b) investing more than 10% of its net
assets in illiquid securities (which include securities restricted as to resale
unless they are determined to be readily marketable in accordance with
procedures established by the Board of Trustees); or (c) investing more than
25% of its total assets in any one industry (excluding U.S. Government
Obligations, bank obligations and, for the Tax Free Money Market Fund,
obligations of states, cities, municipalities or other public authorities, as
well as municipal obligations secured by bank letters of credit or guarantees).
A complete description of these and other investment policies is included in
the SAI. Except for each Fund's investment objective, restriction (c) above and
investment policies designated as fundamental above or in the SAI, the Funds'
investment policies are not fundamental. The Trustees may change any
non-fundamental investment policy without shareholder approval.

RISK FACTORS
GENERAL. There can be no assurance that any Fund will be able to maintain a
stable net asset value. Changes in interest rates may affect the value of the
obligations held by the Funds. The value of fixed income securities varies
inversely with changes in prevailing interest rates, although money market
instruments are generally less sensitive to changes in interest rates than are
longer-term securities. For a discussion of certain other risks associated with
the Funds' additional investment activities, see "Other Investment Practices,"
"Additional Investment Policies of Vista Cash Management Fund and Vista Prime
Money Market Fund" and "Additional Investment Policies of Vista Tax Free Money
Market Fund."

VISTA CASH MANAGEMENT FUND AND VISTA PRIME MONEY MARKET FUND. These Funds are
permitted to invest any portion of their assets in obligations of domestic
banks (including their foreign branches), and in obligations of foreign
issuers. The ability to concentrate in the banking industry may involve certain
credit risks, such as defaults or downgrades, if at some future date adverse
economic conditions prevail in such industry. U.S. banks are subject to
extensive governmental regulations which may limit both the amount and types of
loans which may be made and interest rates which may be charged. In addition,
the profitability of the banking industry is largely dependent upon the
availability and cost of funds for the purpose of financing lending operations
under prevailing money market conditions. General economic conditions as well
as exposure to credit losses arising from possible financial difficulties of
borrowers

26
<PAGE>

play an important part in the operations of this industry.

Securities issued by foreign banks, foreign branches of U.S. banks and foreign
governmental and private issuers involve investment risks in addition to those
of obligations of domestic issuers, including risks relating to future
political and economic developments, more limited liquidity of foreign
obligations than comparable domestic obligations, the possible imposition of
withholding taxes on interest income, the possible seizure or nationalization
of foreign assets, and the possible establishment of exchange controls or other
restrictions. There may be less publicly available information concerning
foreign issuers, there may be difficulties in obtaining or enforcing a judgment
against a foreign issuer (including branches), and accounting, auditing and
financial reporting standards and practices may differ from those applicable to
U.S. issuers. In addition, foreign banks are not subject to regulations
comparable to U.S. banking regulations.

VISTA TAX FREE MONEY MARKET FUND. This Fund may invest without limitation in
Municipal Obligations secured by letters of credit or guarantees from U.S.
banks (including their foreign branches), and may also invest in Municipal
Obligations backed by foreign institutions. These investments are subject to
the considerations discussed in the preceding paragraphs relating to Vista Cash
Management Fund and Vista Prime Money Market Fund. Changes in the credit
quality of banks or other financial institutions backing the Fund's Municipal
Obligations could cause losses to the Fund and affect their share price. Credit
enhancements which are supplied by foreign or domestic banks are not subject to
federal deposit insurance.

This Fund is "non-diversified," which may make the value of its shares more
susceptible to developments affecting issuers in which the Fund invest. In
addition, more than 25% of the assets of the Fund may be invested in securities
to be paid from revenue of similar projects, which may cause the Fund to be
more susceptible to similar economic, political, or regulatory developments.

Because this Fund will invest primarily in obligations issued by states,
cities, public authorities and other municipal issuers, the Fund is susceptible
to factors affecting such states and their municipal issuers. A number of
municipal issuers have a recent history of significant financial and fiscal
difficulties. If a municipal issuer is unable to meet its financial
obligations, the income derived by the Fund and the Fund's ability to preserve
capital and liquidity could be adversely affected.

27
<PAGE>

limited the types and volume of bonds which are not AMT Items and the interest
on which is not subject to federal income tax. This legislation may affect the
availability of Municipal Obligations for investment by the Fund.

MANAGEMENT

THE FUNDS' ADVISERS

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

For its investment advisory services to each of the Funds, Chase is entitled to
receive an annual fee computed daily and paid monthly at an annual rate equal
to 0.10% of each Fund's average daily net assets. Chase is located at 270 Park
Avenue, New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to each Fund other than the Vista Cash Management Fund
and the Vista Tax Free Money Market Fund, under a Sub-Investment Advisory
Agreement between CAM and Chase. CAM is a wholly-owned operating subsidiary of
Chase. CAM makes investment decisions for each of these Funds on a day-to-day
basis. For these services, CAM is entitled to receive a fee, payable by Chase
from its advisory fee, at an annual rate equal to 0.03% of each such Fund's
average daily net assets. CAM provides discretionary investment advisory
services to institutional clients. The same individuals who serve as portfolio
managers for Chase also serve as portfolio managers for CAM. CAM is located at
1211 Avenue of the Americas, New York, New York 10036.

Texas Commerce Bank, National Association ("TCB") is the sub-investment adviser
to the Vista Cash Management Fund and the Vista Tax Free Money Market Fund
under a Sub-Investment Advisory Agreement between Chase and TCB. TCB has been
in the investment counselling business since 1987 and is ultimately controlled
and owned by The Chase Manhattan Corporation. TCB makes investment decisions
for the Vista Cash Management Fund and the Vista Tax Free Money Market Fund on
a day-to-day basis. For these services, TCB is entitled to receive a fee,
payable by Chase from its advisory fee, at an annual rate equal to 0.03% of
each such Fund's average daily net assets. TCB is located at 600 Travis,
Houston, Texas 77002.

HOW TO BUY, SELL AND EXCHANGE SHARES
- ------------------------------------
HOW TO BUY SHARES
Premier Shares may be purchased through certain investment representatives or
shareholder servicing agents. Qualified investors are defined to be
institutions, trusts, partnerships, corporations, qualified and other
retirement plans and fiduciary accounts opened by a

28
<PAGE>

bank, trust company or thrift institution which exercises investment authority
over such accounts.

All purchases made by check should be in U.S. dollars and made payable to the
Vista Funds. Third party checks, credit cards and cash will not be accepted.
When purchases are made by check, redemptions will not be allowed until the
purchase check clears, which may take 15 calendar days or longer. In addition,
the redemption of shares purchased through Automated Clearing House (ACH) will
not be allowed until your payment clears, which may take 7 business days or
longer. In the event a check used to pay for shares is not honored by a bank,
the purchase order will be cancelled and the shareholder will be liable for any
losses or expenses incurred by a Fund.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

BUYING SHARES THROUGH THE SYSTEMATIC INVESTMENT PLAN.
You can make regular investments of $100 or more per transaction through
automatic periodic deduction from your bank savings or checking account.
Shareholders electing to start this Systematic Investment Plan when opening an
account should complete Section 8 of the account application. Current
shareholders may begin the Plan at any time by sending a signed letter and a
deposit slip or voided check to the Vista Service Center. Call the Vista
Service Center at 1-800-622-4273 for complete instructions.

BUYING SHARES THROUGH AN INVESTMENT REPRESENTATIVE OR SHAREHOLDER SERVICING
AGENT. Premier Shares of the Funds may be purchased through a shareholder
servicing agent (i.e., a financial institution, such as a bank, trust company
or savings and loan association that has entered into a shareholder servicing
agreement with the Funds) or by customers of brokers or certain financial
institutions which have entered into Selected Dealer Agreements with the Funds'
distributor. An investor may purchase Premier Shares by authorizing his
shareholder servicing agent or investment representative to purchase shares on
his behalf through the Funds' distributor. Shareholder servicing agents may
offer additional services to their customers, including customized procedures
for the purchase and redemption of Premier Shares, such as pre-authorized or
systematic purchase and withdrawal programs and "sweep" checking programs. For
further information, see "Other Information Concerning the Funds" in this
prospectus and the SAI.

Shares are purchased without a sales load at the net asset value next
determined after the Vista Service Center receives your order in proper form on
any business day during which the Federal Reserve Bank of New York and the New
York Stock Exchange are open for business ("Fund Business Day"). To receive
that day's dividend, the Vista Service Center or your investment representative
or shareholder servicing agent must generally receive your order in proper form

29
<PAGE>

prior to a Fund's Cut-off Time. The Funds' Cut-off Times (Eastern time) are as
follows:

Vista 100% U.S. Treasury
Securities Money Market
Fund ..................... Noon
Vista Tax Free Money Market
Fund ..................... Noon
Vista Federal Money Market
Fund ..................... 2:00 p.m.
Vista U.S. Government Money
Market Fund ............... 2:00 p.m.
Vista Cash Management Fund ... 2:00 p.m.
Vista Prime Money Market
Fund ..................... 2:00 p.m.
Vista Treasury Plus Money
Market Fund ............... 4:00 p.m.

Each Fund reserves the right to set an earlier Cut-off Time on any Fund
Business Day on which the Public Securities Association ("PSA") recommends an
early close to trading on the U.S. Government securities market. Generally,
such earlier Cut-off Time will be noon (Eastern time). The PSA is the trade
association that represents securities firms and banks that underwrite, trade
and sell debt securities, both domestically and internationally. Orders for
shares received and accepted prior to the Cut-off Times will be entitled to all
dividends declared on that day. Orders received for shares after a Fund's
Cut-off Time and prior to 4:00 p.m., Eastern time on any Fund Business Day will
not be accepted and executed on the same day except at the Funds' discretion.
Orders received and not accepted after a Fund's Cut-off Time will be considered
received prior to the Fund's Cut-off Time on the following Fund Business Day
and processed accordingly. Orders for shares are in proper form only after
funds are converted to federal funds. Orders paid by check and received before
a Fund's Cut-off Time will generally be available for the purchase of shares
the following Fund Business Day. For purchases by wire, if federal funds are
not received by the Vista Service Center by 4:00 Eastern time on the day of the
purchase order, the order will be canceled. The Funds reserve the right to
reject any purchase order.

MINIMUM INVESTMENTS. Each Fund has established a minimum initial investment
amount of $100,000 for the purchase of Premier Shares. Shareholders must
maintain an average account balance of $100,000 in the Premier Shares of a Fund
at all times. There is no minimum for subsequent investments.

HOW TO SELL SHARES
You can sell your Fund shares on any Fund Business Day either directly or
through your investment representative or shareholder servicing agent. A Fund
will only forward redemption payments on shares for which it has collected
payment of the purchase price.

SELLING SHARES DIRECTLY TO A FUND. Send a signed letter of instruction to the
Vista Service Center. The price you receive is the next net asset value
calculated after the Fund receives your request in proper form. In order to
allow the advisers to most effectively manage the Funds, investors are urged to
make redemption requests as early in the day as possible.

SIGNATURE GUARANTEES. If you want your redemption proceeds sent to an address
other than your address as it appears on Vista's records, a signature guarantee
is required. A Fund may require

30
<PAGE>

additional documentation for the sale of shares by a corporation, partnership,
agent or fiduciary, or a surviving joint owner. Contact the Vista Service
Center for details.

DELIVERY OF PROCEEDS. A Fund generally sends you payment for your shares the
Fund Business Day after your request is received in proper form, provided your
request is received by the Vista Service Center prior to the Fund's Cut-off
Time, and assuming the Fund has collected payment of the purchase price of your
shares. Under unusual circumstances, the Funds may suspend redemptions, or
postpone payment for more than seven business days, as permitted by federal
securities laws.

TELEPHONE REDEMPTIONS. You may use Vista's Telephone Redemption Privilege to
redeem shares from your account unless you have notified the Vista Service
Center of an address change within the preceding 30 days. Telephone redemption
requests in excess of $25,000 will only be made by wire to a bank account on
record with the Funds. There is a $10.00 charge for each wire transaction.
Unless an investor indicates otherwise on the account application, the Funds
will be authorized to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as his or her
representative, who can provide the Funds with his or her account registration
and address as it appears on the Funds' records.

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

During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Vista Service Center by telephone. In this
event, you may wish to submit a written redemption request, or contact your
investment representative or shareholder servicing agent. The Telephone
Redemption Privilege may be modified or terminated without notice.

SELLING SHARES THROUGH YOUR INVESTMENT REPRESENTATIVE OR YOUR SHAREHOLDER
SERVICING AGENT. Your investment representative or your shareholder servicing
agent must receive your request before the Cut-off Time for your Fund to
receive that day's net asset value. Your representative will be responsible for
furnishing all necessary documentation to the Vista Service Center.

INVOLUNTARY REDEMPTION OF ACCOUNTS. Each Fund may involuntary redeem your
shares if the aggregate net asset value of the shares in your account is less
than $100,000 due to redemptions or if you purchase through the Systematic
Investment Plan and fail to meet that Fund's

31
<PAGE>

investment minimum within a twelve month period. In the event of any such
redemption, you will receive at least 60 days' notice prior to the redemption.

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for Premier Shares of certain other Vista money
market funds at net asset value and for certain classes of shares of the Vista
non-money market funds at net asset value plus any applicable sales charge,
subject to any minimum investment requirement. Not all Vista funds offer all
classes of shares. The prospectus of the other Vista fund into which shares are
being exchanged should be read carefully and retained for future reference.

EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Vista Service Center for procedures for telephone transactions. Ask
your investment representative or the Vista Service Center for prospectuses of
other Vista funds. Please read the prospectus carefully before investing and
keep it for future reference. Shares of certain Vista funds are not available
to residents of all states.

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

HOW THE FUNDS VALUE
THEIR SHARES

The net asset value of each class of shares of each Fund is currently
determined daily as of 4:00 p.m., Eastern time on each Fund Business Day by
dividing the net assets of a Fund attributable to such class by the number of
shares of such class outstanding at the time the determination is made.
Effective with the anticipated introduction of certain automated share purchase
programs, the net asset value of shares of each class of Funds available
through the programs will also be determined as of 6:00 p.m., Eastern time on
each Fund Business Day.

32
<PAGE>

if the instrument were sold. It is anticipated that the net asset value of each
share of each Fund will remain constant at $1.00 and the Funds will employ
specific investment policies and procedures to accomplish this result, although
no assurance can be given that they will be able to do so on a continuing
basis. The Board of Trustees will review the holdings of each Fund at intervals
it deems appropriate to determine whether that Fund's net asset value
calculated by using available market quotations (or an appropriate substitute
which reflects current market conditions) deviates from $1.00 per share based
upon amortized cost. In the event the Trustees determine that a deviation
exists that may result in material dilution or other unfair results to
investors or existing shareholders, the Trustees will take such corrective
action as they regard as necessary and appropriate.

HOW DIVIDENDS AND DISTRIBUTIONS ARE MADE; TAX INFORMATION
- ---------------------------------------------------------
The net investment income of each class of shares of each Fund is declared as a
dividend to the shareholders each Fund Business Day. Dividends are declared as
of the time of day which corresponds to the latest time on that day that a
Fund's net asset value is determined. Shares begin accruing dividends on the
day they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by ACH to a pre-established bank
account, dividends are distributed in the form of additional shares. Dividends
that are otherwise taxable are still taxable to you whether received in cash or
additional shares. Net realized short-term capital gains, if any, will be
distributed at least annually. The Funds do not expect to realize net long-term
capital gains.

Net investment income for each Fund consists of all interest accrued and
discounts earned, less amortization of any market premium on the portfolio
assets of the Fund and the accrued expenses of the Fund.

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

TAXATION OF DISTRIBUTIONS. All Fund distributions of net investment income
will be taxable as ordinary income. Distributions by Vista Tax Free Money
Market Fund of its tax-exempt interest income will not be subject to federal
income tax. Such distributions will generally be subject to state and local
taxes, but may be exempt if paid out of interest on municipal obligations of
the state or locality in which you reside. Any distributions of net capital
gain which are designated as "capital gain dividends" will be taxable as
long-term capital gain,

33
<PAGE>

regardless of how long you have held your shares. The taxation of your
distributions is the same whether received in cash or in shares through the
reinvestment of distributions.

To the extent distributions are attributable to interest from obligations of
the U.S. Government and certain of its agencies and instrumentalities, such
distributions may be exempt from certain types of state and local taxes.

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

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

OTHER INFORMATION CONCERNING THE FUNDS
- --------------------------------------
DISTRIBUTION ARRANGEMENTS

The Funds' distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. Vista U.S.
Government Money Market Fund has adopted a Rule 12b-1 distribution plan which
provides for the payment of distribution fees at annual rates of up to 0.10% of
the average daily net assets attributable to its Premier Shares. There is no
distribution plan for Premier Shares of the other Funds. Payments under the
distribution plan shall be used to compensate or reimburse the Funds'
distributor and broker-dealers for services provided and expenses incurred in
connection with the sale of Premier Shares of Vista U.S. Government Money
Market Fund, and are not tied to the amount of actual expenses incurred.
Promotional activities for the sale of Premier Shares of Vista U.S. Government
Money Market Fund will be conducted generally by the Vista Family of Funds, and
activities intended to promote the Fund's Premier Shares may also benefit the
Fund's other shares and other Vista funds.

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

SHAREHOLDER SERVICING AGENTS

34
<PAGE>

statements, transmitting shareholder reports and communications to customers
and other similar shareholder liaison services. For performing these services,
each shareholder servicing agent receives an annual fee of up to 0.25% of the
average daily net assets of the Premier Shares of each Fund held by investors
for whom the shareholder servicing agent maintains a servicing relationship.
Shareholder servicing agents may subcontract with other parties for the
provision of shareholder support services.

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

For shareholders that bank with Chase, Chase may aggregate investments in the
Vista Funds with balances held in Chase bank accounts for purposes of
determining eligibility for certain bank privileges that are based on specified
minimum balance requirements, such as reduced or no fees for certain banking
services or preferred rates on loans and deposits. Chase and certain broker-
dealers and other shareholder servicing agents may, at their own expense,
provide gifts, such as computer software packages, guides and books related to
investment or additional Fund shares valued up to $250 to their customers that
invest in the Vista Funds.

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

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

35
<PAGE>

ADMINISTRATOR AND SUB-ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of each Fund's
average daily net assets.

VFD provides certain sub-administrative services to each Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from each Fund at an annual rate equal to 0.05% of the
Fund's average daily net assets. VFD has agreed to use a portion of this fee to
pay for certain expenses incurred in connection with organizing new series of
the Trust and certain other ongoing expenses of the Trust. VFD is located at
One Chase Manhattan Plaza, Third Floor, New York, New York 10081.

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

EXPENSES
Each Fund pays the expenses incurred in its operations, including its pro rata
share of expenses of the Trust. These expenses include investment advisory and
administrative fees; the compensation of the Trustees; registration fees;
interest charges; taxes; expenses connected with the execution, recording and
settlement of security transactions; fees and expenses of the Funds' custodian
for all services to the Funds, including safekeeping of funds and securities
and maintaining required books and accounts; expenses of preparing and mailing
reports to investors and to government offices and commissions; expenses of
meetings of investors; fees and expenses of independent accountants, of legal
counsel and of any transfer agent, registrar or dividend disbursing agent of
the Trust; insurance premiums; and expenses of calculating the net asset value
of, and the net income on, shares of the Funds. Shareholder servicing and
distribution fees are allocated to specific classes of the Funds. In addition,
the Funds may allocate transfer agency and certain other expenses by class.
Service providers to a Fund may, from time to time, voluntarily waive all or a
portion of any fees to which they are entitled.

36
<PAGE>

set forth below. Shareholders are entitled to one vote for each whole share
held, and each fractional share shall be entitled to a proportionate fractional
vote, except that Trust shares held in the treasury of the Trust shall not be
voted. Shares of each class of a Fund generally vote together except when
required under federal securities laws to vote separately on matters that only
affect a particular class, such as the approval of distribution plans for a
particular class. Fund shares will be maintained in book entry form, and no
certificates representing shares owned will be issued to shareholders.

Each Fund issues multiple classes of shares. This Prospectus relates only to
Premier Shares of the Funds. Premier Shares may be purchased only by qualified
investors. See "How to Buy, Sell and Exchange Shares." The Funds offer other
classes of shares in addition to these classes and may determine not to offer
certain classes of shares. The categories of investors that are eligible to
purchase shares and minimum investment requirements may differ for each class
of the Funds' shares. In addition, other classes of Fund shares may be subject
to differences in sales charge arrangements, ongoing distribution and service
fee levels, and levels of certain other expenses, which will affect the
relative performance of the different classes. Investors may call
1-800-622-4273 to obtain additional information about other classes of shares
of the Funds that are offered. Any person entitled to receive compensation for
selling or servicing shares of a Fund may receive different levels of
compensation with respect to one class of shares over another.

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

Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.

PERFORMANCE INFORMATION

Each Fund may advertise its annualized "yield" and its "effective yield".
Annualized "yield" is determined by assuming that income generated by an
investment in a Fund over a stated seven-day period (the "yield") will continue
to be generated each week over a 52-week period. It is shown as a percentage of
such investment. "Effective yield" is the annualized "yield" calculated
assuming the reinvestment of the income earned during each week of the 52-week
period. The "effective yield" will be

37
<PAGE>

slightly higher than the "yield" due to the compounding effect of this assumed
reinvestment.

The Vista Tax Free Money Market Fund may also quote a "tax equivalent yield",
the yield that a taxable money market fund would have to generate in order to
produce an after-tax yield equivalent to a tax free fund's yield. The tax
equivalent yield of the Vista Tax Free Money Market Fund can then be compared
to the yield of a taxable money market fund. Tax equivalent yields can be
quoted on either a "yield" or "effective yield" basis.

Investment performance may from time to time be included in advertisements
about the Funds. Performance is calculated separately for each class of shares.
Because this performance information is based on historical earnings, it should
not be considered as an indication or representation of future performance.
Investment performance, which will vary, is based on many factors, including
market conditions, the composition of each Fund's portfolio, each Fund's
operating expenses and which class of shares you purchase. Investment
performance also reflects the risks associated with each Fund's investment
objective and policies. These factors should be considered when comparing each
Fund's investment results to those of other mutual funds and investment
vehicles.

Quotations of investment performance for any period when an expense limitation
was in effect will be greater if the limitation had not been in effect. Each
Fund's performance may be compared to other mutual funds, relevant indices and
rankings prepared by independent services. See the SAI.

38
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

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

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

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

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

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

VPMM-1-1297

<PAGE>

[CHASE VISTA LOGO]

PROSPECTUS
VISTA(SM) PRIME MONEY MARKET FUND
CLASS B AND C SHARES

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Fund in its December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call the Vista Service Center at 1-800-34-VISTA. The SAI has been
filed with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference.

Investors should be aware that Class B shares of the Fund are made available
for exchange purposes only and that the yield on Class B and Class C shares
will be substantially lower than other classes of shares of the Fund. Class B
and Class C shares of the Fund carry the same 0.75% distribution fee as other
Vista Class B and Class C shares.

INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

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

<PAGE>

2
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary .................................................................. 4
The expenses you pay on your Fund investment, including examples
Financial Highlights ............................................................ 6
The Fund's financial history
Fund Objective and Investment Approach .......................................... 7
Other Investment Practices ...................................................... 7
Management ........................................................................ 12
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management, the
Fund's sub-adviser
About Your Investment ............................................................ 12
How to Buy, Sell and Exchange Shares ............................................. 13
How the Fund Values Its Shares ................................................... 18
How Dividends and Distributions Are Made; Tax Information ........................ 18
How the Fund distributes its earnings, and tax treatment related to those earnings
Other Information Concerning the Fund ............................................. 19
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ......................................................... 23
How performance is determined, stated and/or advertised
</TABLE>

3
<PAGE>

EXPENSE SUMMARY

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

<TABLE>
<CAPTION>
Class B Class C
Shares Shares
------- --------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) ................................. None None
Maximum Deferred Sales Charge
(as a percentage of the lower of original purchase price or redemption
proceeds)* ......................................................... 5.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ................................................ 0.10% 0.10%
12b-1 Fee ** ......................................................... 0.75% 0.75%+
Shareholder Servicing Fee (after estimated waiver)*** .................. 0.00% 0.25%+
Other Expenses (after estimated waiver and reimbursement)*** ......... 0.40% 0.40%
---- ----
Total Fund Operating Expenses (after waiver of fee and
expense reimbursement) *** .......................................... 1.25% 1.50%
==== ====
</TABLE>

<TABLE>
<CAPTION>
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- -------- -------- --------
<S> <C> <C> <C> <C>
Class B Shares:
Assuming complete redemption at the end
of the period++ ..................... $65 $73 $93 $151
Assuming no redemptions ............... $13 $40 $69 $151
Class C Shares:
Assuming complete redemption at the end
of the period++ ..................... $26 $47 $82 $179
Assuming no redemptions ............... $15 $47 $82 $179
</TABLE>

* The maximum deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge generally
declines by 1% annually thereafter (except in the fourth year),
reaching zero after six years. The maximum deferred sales charge on
Class C shares applies to redemptions during the first year after
purchase; the charge is 1% during the first year and zero thereafter.
See "How to Buy, Sell and Exchange Shares."
** Long-term shareholders in mutual funds with 12b-1 fees, such as Class
B and Class C shareholders of the Fund, may pay more than the economic
equivalent of the maximum front-end sales charge permitted by rules of
the National Association of Securities Dealers, Inc.
*** Reflects current fee waiver and expense subsidy arrangments to maintain
Total Fund Operating Expenses at the level indicated in the table above.
Absent such arrangements, the Shareholder Servicing Fee would be 0.25%
and Total Fund Operating Expenses would be 1.50% for Class B shares.
+ Beginning with the 13th month following the purchase of Class C
shares by their customers, broker-dealers receive payments at an annual
rate of 1.00% of the average daily net asset value of the Class C shares
invested in the Fund by their customers, consisting of a 12b-1
distribution fee at an annual rate of 0.75% of such assets and a service
fee at an annual rate of 0.25% of such assets.
++ Assumes deduction at the time of redemption of the maximum applicable
deferred sales charge.

4
<PAGE>

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

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

5
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Class B Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this Annual Report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is also included in the Annual
Report to Shareholders.

VISTA PRIME MONEY MARKET FUND

<TABLE>
<CAPTION>
Class B Shares
----------------------------------------------
Year Year Year 4/21/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94**
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of Period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----------
Income from Investment Operations:
Net investment income ................................. 0.043 0.042 0.043 0.011
Net Realized Loss on Securities ........................ -- -- (0.003) --
--------- --------- --------- -----------
Total Income from Investment Operations ............... 0.043 0.042 0.040 0.011
--------- --------- --------- -----------
Voluntary Capital Contribution ........................ -- -- 0.003 --
--------- --------- --------- -----------
Less Distributions:
Dividends from Net Investment Income .................. 0.043 0.042 0.043 0.011
--------- --------- --------- -----------
Net Asset Value, End of Period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ===========
Total Return ............................................. 4.33% 4.25% 4.37% 1.11%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............... $ 10,269 $ 15,667 $ 4,880 $ 1,452
Ratio of Expenses to Average Net Assets # ............... 1.35% 1.47% 1.47% 1.47%
Ratio of Net Investment Income to Average Net Assets # 4.27% 4.17% 4.33% 2.96%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets # .................. 1.53% 1.71% 2.53% 1.67%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets # ...... 4.09% 3.93% 3.27% 2.76%
</TABLE>

* Commencement of offering shares.

** In 1994 the Prime Money Market Fund changed its fiscal year-end from
October 31 to August 31.

# Short periods have been annualized.

6
<PAGE>

FUND OBJECTIVE AND
INVESTMENT APPROACH
- -------------------
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

In lieu of investing directly, the Fund is authorized to seek to achieve its
objective by investing all of its investable assets in an investment company
having substantially the same investment objective and policies as the Fund.

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

OTHER INVESTMENT
PRACTICES
- ----------------
The Fund seeks to maintain a net asset value of $1.00 per share.

The Fund invests only in U.S. dollar-denominated high quality obligations which
are determined to present minimal credit risks. This credit determination must
be made in accordance with procedures established by the Board of Trustees.
Each investment must be rated in the highest short-term rating category by at
least two national rating organizations ("NROs") (or one NRO if the instrument
was rated only by one such organization) or, if unrated, must be determined to
be of comparable quality in accordance with the procedures of the Trust. If a
security has an unconditional guarantee or similar enhancement, the issuer of
the guarantee or enhancement may be relied upon in meeting these ratings
requirements rather than the issuer of the security. Securities in which the
Fund invests may not earn as high a level of current income as long-term or
lower quality securities.

The Fund purchases only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations. Although
the Fund seeks to be fully invested, at times it may hold uninvested cash
reserves, which would adversely affect its yield.

7
<PAGE>

There can be no assurance that the Fund will achieve its investment objective.

The Fund may also engage in the following investment practices, when consistent
with its overall objective and policies. These practices, and certain
associated risks, are more fully described in the SAI.

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in direct obligations of the
U.S. Treasury. The Fund may also invest in other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
(collectively, "U.S. Government Obligations"). Certain U.S. Government
Obligations, such as U.S. Treasury securities and direct pass-through
certificates of the Government National Mortgage Association (GNMA), are backed
by the "full faith and credit" of the U.S. Government. Other U.S. Government
Obligations, such as obligations of Federal Home Loan Banks and the Federal
Home Loan Mortgage Corporation, are not backed by the "full faith and credit"
of the U.S. Government. In the case of securities not backed by the "full faith
and credit" of the U.S. Government, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the U.S. Government itself in the event
the agency or instrumentality does not meet its commitments.

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

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

8
<PAGE>

establish a segregated account in which it will maintain liquid assets on a
daily basis in an amount at least equal to the repurchase price (including
accrued interest). The Fund would be required to pay interest on amounts
obtained through reverse repurchase agreements, which are considered borrowings
under federal securities laws.

STRIPS AND ZERO COUPON OBLIGATIONS. The Fund may invest up to 20% of its total
assets in stripped obligations (i.e., separately traded principal and interest
components of securities) where the underlying obligation is backed by the full
faith and credit of the U.S. Government, including instruments known as
"STRIPS". The Fund may also invest in zero coupon obligations. Zero coupon
obligations are debt securities that do not pay regular interest payments, and
instead are sold at substantial discounts from their value at maturity. The
value of STRIPS and zero coupon obligations tends to fluctuate more in response
to changes in interest rates than the value of ordinary interest-paying debt
securities with similar maturities. The risk is greater when the period to
maturity is longer.

FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. The Fund may
invest in floating rate securities, whose interest rates adjust automatically
whenever a specified interest rate changes, and variable rate securities, whose
interest rates are periodically adjusted. Certain of these instruments permit
the holder to demand payment of principal and accrued interest upon a specified
number of days' notice from either the issuer or a third party. The securities
in which the Fund may invest include participation certificates and
certificates of indebtedness or safekeeping. Participation certificates are pro
rata interests in securities held by others; certificates of indebtedness or
safekeeping are documentary receipts for such original securities held in
custody by others. As a result of the floating or variable rate nature of these
investments, the Fund's yield may decline and it may forego the opportunity for
capital appreciation during periods when interest rates decline; however,
during periods when interest rates increase, the Fund's yield may increase and
it may have reduced risk of capital depreciation. Demand features on certain
floating or variable rate securities may obligate the Fund to pay a "tender
fee" to a third party. Demand features provided by foreign banks involve
certain risks associated with foreign investments.

OTHER MONEY MARKET FUNDS.
The Fund may invest up to 10% of its total assets in shares of other money
market funds when consistent with its investment objective and policies,
subject to applicable regulatory limitations. Additional fees may be charged by
other money market funds.

9
<PAGE>

obligations of the parent bank or may be limited to the issuing branch by the
terms of the specific obligation or by government regulation. Foreign bank
obligations involve certain risks associated with foreign investing.

MUNICIPAL OBLIGATIONS. The Fund may invest in high-quality, short-term
municipal obligations that carry yields that are competitive with those of
other types of money market instruments in which it may invest. Dividends paid
by the Fund that are derived from interest on municipal obligations will be
taxable to shareholders for federal income tax purposes.

SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES.
The Fund intends to invest a substantial portion of its assets from time to
time in securities of foreign governments and supranational agencies. The Fund
will limit its investments in foreign government obligations to the commercial
paper and other short-term notes issued or guaranteed by the governments of
Western Europe, Australia, New Zealand, Japan and Canada. Obligations of
supranational agencies, such as the International Bank for Reconstruction and
Development (also known as the World Bank) are supported by subscribed, but
unpaid, commitments of its member countries. There is no assurance that these
commitments will be undertaken or complied with in the future, and foreign and
supranational securities are subject to certain risks associated with foreign
investing.

CUSTODIAL RECEIPTS. The Fund may acquire securities in the form of custodial
receipts that evidence ownership of future interest payments, principal
payments or both on certain U.S. Treasury notes or bonds in connection with
programs sponsored by banks and brokerage firms. These are not deemed U.S.
Government securities. These notes and bonds are held in custody by a bank on
behalf of the owners of the receipts.

PORTFOLIO TURNOVER. It is intended that the Fund will be fully managed by
buying and selling securities, as well as holding securities to maturity. The
frequency of the Fund's portfolio transactions will vary from year to year. In
managing the Fund, the Fund's advisers will seek to take advantage of market
developments, yield disparities and variations in the creditworthiness of
issuers. More frequent turnover will generally result in higher transactions
costs, including dealer mark-ups.

LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Fund limit investment
risks for shareholders. These regulations and restrictions prohibit the Fund
from: (a) with certain limited exceptions, investing more than 5% of its total
assets in the securities of any one issuer (this limitation does not apply to
U.S. Government Obligations held by

10
<PAGE>

the Fund); (b) investing more than 10% of its net assets in illiquid securities
(which include securities restricted as to resale unless they are determined to
be readily marketable in accordance with procedures established by the Board of
Trustees); or (c) investing more than 25% of its total assets in any one
industry (excluding U.S. Government Obligations and bank obligations). A
complete description of these and other investment policies is included in the
SAI. Except for the Fund's investment objective, restriction (c) above and
investment policies designated as fundamental above or in the SAI, the Fund's
investment policies are not fundamental. The Trustees may change any non-
fundamental investment policy without shareholder approval.

RISK FACTORS
There can be no assurance that the Fund will be able to maintain a stable net
asset value. Changes in interest rates may affect the value of the obligations
held by the Fund. The value of fixed income securities varies inversely with
changes in prevailing interest rates, although money market instruments are
generally less sensitive to changes in interest rates than are longer-term
securities. For certain other risks associated with the Fund's additional
investment activities, see the above discussion of those activities.

The Fund is permitted to invest any portion of its assets in obligations of
domestic banks (including their foreign branches), and in obligations of
foreign issuers. The ability to concentrate in the banking industry may involve
certain credit risks, such as defaults or downgrades, if at some future date
adverse economic conditions prevail in such industry. U.S. banks are subject to
extensive governmental regulations which may limit both the amount and types of
loans which may be made and interest rates which may be charged. In addition,
the profitability of the banking industry is largely dependent upon the
availability and cost of funds for the purpose of financing lending operations
under prevailing money market conditions. General economic conditions as well
as exposure to credit losses arising from possible financial difficulties of
borrowers play an important part in the operations of this industry.

Securities issued by foreign banks, foreign branches of U.S. banks and foreign
governmental and private issuers involve investment risks in addition to those
of domestic obligations of domestic issuers, including risks relating to future
political and economic developments, more limited liquidity of foreign
obligations than comparable domestic obligations, the possible imposition of
withholding taxes on interest income, the possible seizure or nationalization
of foreign assets, and the possible establishment of exchange controls or other
restrictions. There may be less publicly available information concerning
foreign issuers there may be difficulties in obtaining or enforcing a judgment
against a foreign issuer (including branches) and accounting, auditing and
financial reporting standards and practices may differ from those applicable to
U.S. issuers. In addition, foreign banks are not subject to

11
<PAGE>

regulations comparable to U.S. banking regulations.

MANAGEMENT
- ----------
THE FUND'S ADVISERS

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

For its investment advisory services to the Fund, Chase is entitled to receive
an annual fee computed daily and paid monthly at an annual rate equal to 0.10%
of the Fund's average daily net assets. Chase is located at 270 Park Avenue,
New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Fund under a Sub-Investment Advisory Agreement
between CAM and Chase. CAM is a wholly-owned operating subsidiary of Chase. CAM
makes investment decisions for the Fund on a day-to-day basis. For these
services, CAM is entitled to receive a fee, payable by Chase from its advisory
fee, at an annual rate equal to 0.03% of the Fund's average daily net assets.
CAM provides discretionary investment advisory services to institutional
clients. The same individuals who serve as portfolio managers for Chase also
serve as portfolio managers for CAM. CAM is located at 1211 Avenue of the
Americas, New York, New York 10036.

ABOUT YOUR INVESTMENT
- ---------------------
CLASS B SHARES. Investors should be aware that Class B shares of the Fund are
made available only for purposes of exchanges from Class B shares of other
Vista funds. Class B shares are subject to an annually declining contingent
deferred sales charge ("CDSC") if redeemed within a specified period after
purchase. However, no contingent deferred sales charge is imposed on the Class
B shares being disposed of in an exchange into the Fund.

CLASS C SHARES. Class C shares redeemed within one year after purchase are
subject to a CDSC equal to 1% of the lesser of their original cost or the net
asset value at the time of the redemption. If you hold your shares for one year
or more, you will receive the entire net asset value of your shares upon
redemption. As in the case of Class B shares, no contingent deferred sales
charge is imposed on the Class C shares being disposed of in an exchange into
the Fund.

12
<PAGE>

HOW TO BUY, SELL AND EXCHANGE SHARES

- ------------------------------------
HOW TO BUY SHARES

Class B shares of the Fund may only be acquired via exchange from Class B
shares of another Vista fund and only if the account registrations are
identical. Class C shares of the Fund may be acquired by purchase as well as
via exchange from Class C shares of another Vista fund where the account
registrations are identical.

You can open an account in Class C shares of the Fund with as little as $2,500
(or $1,000 for IRAs, SEP-IRAs and the Systematic Investment Plan). Additional
investments can be made at any time with as little as $100. You can buy Class C
shares three ways--through an investment representative or shareholder
servicing agent, through the Funds' distributor by calling the Vista Service
Center, or through the Systematic Investment Plan.

All purchases of Class C shares made by check should be in U.S. dollars and
made payable to the Vista Funds. Third party checks, credit cards and cash will
not be accepted. When purchases are made by check, redemptions will not be
allowed until the purchase check clears, which may take 15 calendar days or
longer. In addition, the redemption of shares purchased through Automated
Clearing House (ACH) will not be allowed until your payment clears, which may
take 7 business days or longer. In the event a check used to pay for shares is
not honored by a bank, the purchase order will be cancelled and the shareholder
will be liable for any losses or expenses incurred by a Fund. For purchases by
wire, if federal funds are not received by the Vista Service Center by 4:00
Eastern time on the day of the purchase order, the order will be canceled.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

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

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

BUYING CLASS C SHARES THROUGH AN INVESTMENT REPRESENTATIVE OR SHAREHOLDER
SERVICING AGENT. Class C shares of the Funds may be purchased through a
shareholder servicing agent (i.e., a financial institution, such as a bank,
trust company or savings and loan association that has entered into a
shareholder servicing agreement with the Funds) or by customers of brokers or
certain financial institutions which have entered into Selected Dealer
Agreements with the Funds'

13
<PAGE>

distributor. An investor may purchase Class C shares by authorizing his
shareholder servicing agent or investment representative to purchase shares on
his behalf through the Funds' distributor. Shareholder servicing agents may
offer additional services to their customers, including customized procedures
for the purchase and redemption of Vista Shares, such as pre-authorized or
systematic purchase and withdrawal programs and "sweep" checking programs. For
further information, see "Other Information Concerning the Funds" in this
prospectus and the SAI.

Class B and Class C shares of the Fund are sold by the Fund's distributor
without an initial sales load at the net asset value next determined after your
exchange order is received in proper form on any business day during which the
Federal Reserve Bank of New York and the New York Stock Exchange are open for
business ("Fund Business Day"). To receive that day's dividend, the Vista
Service Center or your investment representative or shareholder servicing agent
must generally receive your order in proper form prior to the Fund's Cut-off
Time, which is 2:00 p.m., Eastern time. The Fund reserves the right to set an
earlier Cut-off Time on any Fund Business Day on which the Public Securities
Association ("PSA") recommends an early close to trading on the U.S. Government
securities market. Generally, such earlier Cut-Off Time will be noon (Eastern
time). The PSA is the trade association that represents securities firms and
banks that underwrite, trade and sell debt securities, both domestically and
internationally. Orders for shares received and accepted prior to the cut-off
time will be entitled to all dividends declared on that day. Orders for shares
received after the Fund's Cut-off Time and prior to 4:00 p.m., Eastern time on
any Fund Business Day will not be accepted and executed on the same day except
at the Fund's discretion. Orders received and not accepted after the Fund's
Cut-off Time will be considered received prior to the Fund's Cut-off Time on
the following Fund Business Day and processed accordingly. Orders for Class C
shares are in proper form only after funds are converted to federal funds.
Orders for Class C shares paid by check and received before the cut-off time
will generally be available for the purchases of shares the following Fund
Business Day. The Fund reserves the right to reject any purchase order.

If you are considering exchanging shares shortly after purchase, you should pay
for those shares with a certified check to avoid any delay in exchange. To
eliminate the need for safekeeping, the Fund will not issue certificates for
your Class C shares unless you request them. Due to the conversion feature of
Class B shares, certificates for Class B shares will not be issued and all
Class B shares will be held in book entry form.

14
<PAGE>

Class B Shares

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

In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during
the CDSC period. The holding period of Class B shares of the Fund will be
calculated from the date that the Class B shares were initially acquired in one
of the other Vista funds. Those Class B shares being redeemed will be
considered to represent capital appreciation or dividend and capital gain
distribution reinvestments in other funds (if applicable) and then shares held
for the longest period of time. As a result, the CDSC imposed should be the
lowest possible rate. When a share that has appreciated in value is redeemed
during the CDSC period, a CDSC is assessed only on its initial purchase price.
For further information on how sales charges are calculated if you exchange
your shares, see "How to Exchange Your Shares."

The CDSC will be waived on redemption of Class B shares arising out of death or
disability or in connection with certain withdrawals from IRA or other
retirement plans. Up to 12% of the value of Class B shares subject to a
systematic withdrawal plan may also be redeemed each year without a CDSC,
provided that the Class B account had a minimum balance of $20,000 at the time
the systematic withdrawal plan was established. The SAI contains additional
information about CDSC waivers.

Class C Shares

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

In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during
the CDSC period. The holding period of Class C shares of the Fund will be
calculated from the date that the Class C shares were initially acquired in one
of the other Vista funds. Those Class C shares being redeemed will be
considered to represent capital appreciation or dividend and capital gain
distribution reinvestments in other funds (if applicable) and then shares held
for the longest period of time. As a result, the CDSC imposed should be the
lowest possible rate. When a share that has appreciated in value is redeemed
during the CDSC period,

15
<PAGE>

a CDSC is assessed only on its initial purchase price. For further information
on how sales charges are calculated if you exchange your shares, see "How to
Exchange Your Shares."

HOW TO SELL SHARES

You can sell your Fund shares on any Fund Business Day either directly or
through your investment representative or shareholder servicing agent. The Fund
will only forward redemption payments on shares for which it has collected
payment of the purchase price.

SELLING SHARES DIRECTLY TO THE FUND. Send a signed letter of instruction to the
Vista Service Center. The price you receive is the next net asset value
calculated after the Fund receives your request in proper form, less any
applicable CDSC.

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

DELIVERY OF PROCEEDS. The Fund generally sends you payment for your shares the
Fund Business Day after your request is received in proper form, provided your
request is received by the Vista Service Center prior to the Fund's Cut-off
Time, and assuming the Fund has collected payment of the purchase price of your
shares. Under unusual circumstances, the Fund may suspend redemptions, or
postpone payment for more than seven business days, as permitted by federal
securities laws.

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

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

During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Vista Service Center by telephone. In this
event, you may

16
<PAGE>

wish to submit a written redemption request, or contact your investment
representative or shareholder servicing agent. The Telephone Redemption
Privilege may be modified or terminated without notice.

SYSTEMATIC WITHDRAWAL PLAN. Make regular withdrawals of $100 or more monthly,
quarterly or semi-annually. Call the Vista Service Center at 1-800-34-VISTA for
complete instructions.

SELLING SHARES THROUGH YOUR INVESTMENT REPRESENTATIVE OR YOUR SHAREHOLDER
SERVICING AGENT. Your investment representative or your shareholder servicing
agent must receive your request before the Fund's Cut-off Time to receive that
day's net asset value. Your representative will be responsible for furnishing
all necessary documentation to the Vista Service Center, and may charge you for
its services.

INVOLUNTARY REDEMPTION OF ACCOUNTS. The Fund may involuntarily redeem your
shares if the aggregate net asset value of the shares in your account is less
than $500 due to redemptions. In the event of any such redemption, you will
receive at least 60 days' notice prior to the redemption. In the event the Fund
redeems Class B or Class C shares pursuant to this provision, no CDSC will be
imposed.

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other
Vista funds at net asset value beginning 15 days after purchase, subject to any
minimum investment requirement. Not all Vista funds offer all classes of
shares. The prospectus of the other Vista fund into which shares are being
exchanged should be read carefully and retained for future reference. If you
exchange shares subject to a CDSC, the transaction will not be subject to the
CDSC. However, when you redeem the shares acquired through the exchange, the
redemption may be subject to the CDSC, depending upon when you originally
purchased the shares. The CDSC will be computed using the schedule of any fund
into or from which you have exchanged your shares that would result in your
paying the highest CDSC applicable to your class of shares. In computing the
CDSC, the length of time you have owned your shares will be measured from the
date of original purchase and will not be affected by any exchange.

EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Vista Service Center for procedures for telephone transactions. Ask
your investment representative or the Vista Service Center for prospectuses of
other Vista funds. Shares of certain Vista funds are not available to residents
of all states.

17
<PAGE>

reserves the right to revise or terminate the exchange privilege, limit the
amount or number of exchanges or reject any exchange. In addition, any
shareholder who makes more than ten exchanges of shares involving the Fund in a
year or three in a calendar quarter will be charged a $5.00 administration fee
for each such exchange. Shareholders would be notified of any such action to
the extent required by law. Consult the Vista Service Center before requesting
an exchange. See the SAI to find out more about the exchange privilege.

HOW THE FUND
VALUES ITS SHARES
- -----------------
The net asset value of each class of the Fund's shares is currently determined
daily as of 4:00 p.m., Eastern time on each Fund Business Day by dividing the
net assets of the Fund attributable to such class by the number of shares of
such class outstanding at the time the determination is made. Effective with
the anticipated introduction of certain automated share purchase programs, the
net asset value of shares of each class of the Fund will also be determined as
of 6:00 p.m., Eastern time on each Fund Business Day if the Fund is available
through these programs.

The portfolio securities of the Fund are valued at their amortized cost in
accordance with federal securities laws, certain requirements of which are
summarized under "Other Investment Practices." This method increases stability
in valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price the Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share will remain constant at $1.00 and the Fund will employ specific
investment policies and procedures to accomplish this result, although no
assurance can be given that it will be able to do so on a continuing basis. The
Board of Trustees will review the holdings of the Fund at intervals it deems
appropriate to determine whether the Fund's net asset value calculated by using
available market quotations (or an appropriate substitute which reflects
current market conditions) deviates from $1.00 per share based upon amortized
cost. In the event the Trustees determine that a deviation exists that may
result in material dilution or other unfair results to investors or existing
shareholders, the Trustees will take such corrective action as they regard as
necessary and appropriate.

HOW DIVIDENDS AND
DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------
The net investment income of each class of shares of the Fund is declared as a
dividend to the shareholders on each Fund Business Day. Dividends are declared
as of the time of day which corresponds to the latest time on that day that the
Fund's net asset value is determined. Shares begin accruing dividends on the
day they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by ACH to a pre-established bank
account, dividends are distributed in the form of additional shares.

18
<PAGE>

Dividends that are otherwise taxable are still taxable to you whether received
in cash or additional shares. Net short-term capital gain, if any, will be
distributed at least annually. The Fund does not expect to realize net
long-term capital gains.

Net investment income for the Fund consists of all interest accrued and
discounts earned less, amortization of any market premium on the portfolio
assets of the Fund, and the accrued expenses of the Fund.

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

All Fund distributions of net investment income will be taxable as ordinary
income. Such distributions will generally be subject to state and local taxes,
but may be exempt if paid out of interest on municipal obligations of the state
or locality in which you reside. Any distributions of net capital gain which
are designated as "capital gain dividends" will be taxable as long-term capital
gain, regardless of how long you have held your shares. The taxation of your
distribution is the same whether received in cash or in shares through the
reinvestment of distributions.

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

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

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLANS

The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Fund
has adopted a Rule 12b-1 distribution plan for Class B and Class C shares which
provides that the Fund will pay distribution fees at annual rates of up to
0.75% of the average daily net assets attributable to its Class B and Class C
shares, respectively. Payments under the distribution plan shall be used to
compensate or reimburse the Fund's distributor and broker-dealers for services
provided and expenses incurred in connection with the sale of Class B and Class
C shares, and are not tied to the amount of actual expenses

19
<PAGE>

incurred. Payments may be used to compensate broker-dealers with trail or
maintenance commissions at an annual rate of up to 0.25% of the average daily
net asset value of the Class B shares or 0.75% of the net asset value of the
Class C shares invested in the Fund by customers of these broker-dealers. Trail
or maintenance commissions are paid to broker-dealers beginning the 13th month
following the purchase of shares by their customers. Promotional activities for
the sale of Class B and Class C shares will be conducted generally by the Vista
Family of Funds, and activities intended to promote the Fund's Class B and
Class C shares may also benefit the Fund's other shares and other Vista funds.

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

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

For shareholders that bank with Chase, Chase may aggregate investments in the
Vista Funds with balances held in Chase bank accounts for purposes of

20
<PAGE>

determining eligibility for certain bank privileges that are based on specified
minimum balance requirements, such as reduced or no fees for certain banking
services or preferred rates on loans and deposits. Chase and certain broker-
dealers and other shareholder servicing agents may, at their own expense,
provide gifts, such as computer software packages, guides and books related to
investment or additional Fund shares valued up to $250 to their customers that
invest in the Vista Funds.

ADMINISTRATOR AND
SUB-ADMINISTRATOR
Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of the Fund's
average daily net assets.

VFD provides certain sub-administrative services to the Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay
for certain expenses incurred in connection with organizing new series of the
Trust and certain other ongoing expenses of the Trust. VFD is located at One
Chase Manhattan Plaza, Third Floor, New York, New York 10081.

CUSTODIAN

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

EXPENSES
The Fund pays the expenses incurred in its operations, including its pro rata
share of expenses of the Trust. These expenses include investment advisory and
administrative fees; the

21
<PAGE>

compensation of the Trustees; registration fees; interest charges; taxes;
expenses connected with the execution, recording and settlement of security
transactions; fees and expenses of the Fund's custodian for all services to the
Fund, including safekeeping of funds and securities and maintaining required
books and accounts; expenses of preparing and mailing reports to investors and
to government offices and commissions; expenses of meetings of investors; fees
and expenses of independent accountants, of legal counsel and of any transfer
agent, registrar or dividend disbursing agent of the Trust; insurance premiums;
and expenses of calculating the net asset value of, and the net income on,
shares of the Fund. Shareholder servicing and distribution fees are allocated
to specific classes of the Fund. In addition, the Fund may allocate transfer
agency and certain other expenses by class. Service providers to the Fund may,
from time to time, voluntarily waive all or a portion of any fees to which they
are entitled.

ORGANIZATION AND
DESCRIPTION OF SHARES
The Fund is a portfolio of Mutual Fund Trust, an open-end management investment
company organized as a Massachusetts business trust in 1994 (the "Trust"). The
Trust has reserved the right to create and issue additional series and classes.
Each share of a series or class represents an equal proportionate interest in
that series or class with each other share of that series or class. The shares
of each series or class participate equally in the earnings, dividends and
assets of the particular series or class. Shares have no preemptive or
conversion rights. Shares when issued are fully paid and non-assessable, except
as set forth below. Shareholders are entitled to one vote for each whole share
held, and each fractional share shall be entitled to a proportionate fractional
vote, except that Trust shares held in the treasury of the Trust shall not be
voted. Shares of each class of the Fund generally vote together except when
required under federal securities laws to vote separately on matters that only
affect a particular class, such as the approval of distribution plans for a
particular class. Fund shares will be maintained in book entry form, and no
certificates representing shares owned will be issued to shareholders.

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

22
<PAGE>

receive different levels of compensation with respect to one class of shares
over another.

PERFORMANCE INFORMATION

- -----------------------
The Fund may advertise its annualized "yield" and its "effective yield".
Annualized "yield" is determined by assuming that income generated by an
investment in the Fund over a stated seven-day period (the "yield") will
continue to be generated each week over a 52-week period. It is shown as a
percentage of such investment. "Effective yield" is the annualized "yield"
calculated assuming the reinvestment of the income earned during each week of
the 52-week period. The "effective yield" will be slightly higher than the
"yield" due to the compounding effect of this assumed reinvestment.

Investment performance may from time to time be included in advertisements
about the Fund. Performance is calculated separately for each class of shares.
Because this performance information is based on historical earnings, it should
not be considered as an indication or representation of future performance.
Investment performance, which will vary, is based on many factors, including
market conditions, the composition of the Fund's portfolio, the Fund's
operating expenses and which class of shares you purchase. Investment
performance also reflects the risks associated with the Fund's investment
objective and policies. These factors should be considered when comparing the
Fund's investment results to those of other mutual funds and investment
vehicles. Quotations of investment performance for any period when an expense
limitation was in effect will be greater if the limitation had not been in
effect. The Fund's performance may be compared to other mutual funds, relevant
indices and rankings prepared by independent services. See the SAI.

23
<PAGE>

VISTA SERVICE CENTER

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

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

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

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

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

VPRMB-1-1297

<PAGE>

[CHASE VISTA LOGO]

PROSPECTUS
VISTASM CALIFORNIA INTERMEDIATE
TAX FREE INCOME FUND

INVESTMENT STRATEGY: INCOME

December 29, 1997

<PAGE>

2
<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you might pay on your Fund investment, including examples
Financial Highlights ...................................................... 5
How the Fund has performed
Fund Objective ............................................................ 6
Investment Policies ......................................................... 6
The kinds of securities in which the Fund invests, investment policies and
techniques, and risks
Management .................................................................. 13
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management,
the Fund's sub-adviser, and the individuals who manage the Fund
How to Buy, Sell and Exchange Shares ....................................... 13
How the Fund Values Its Shares ............................................. 19
How Distributions Are Made; Tax Information ................................. 19
How the Fund distributes its earnings, and tax treatment related
to those earnings
Other Information Concerning the Fund ....................................... 21
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization ................................................
Performance Information ................................................... 24
How performance is determined, stated and/or advertised
Make the Most of Your Vista Privileges .................................... 25

3
<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Fund and is, except as
described below, based on expenses incurred in the most recent fiscal year. The
example shows the cumulative expenses attributable to a hypothetical $1,000
investment over specified periods.

SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) ........................ 4.50%
Maximum Deferred Sales Charge
(as a percentage of the lower of original
purchase price or redemption proceeds) ..................... None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver)* ............ 0.00%#
12b-1 Fee (after estimated waiver) * ** ..................... 0.00%#
Shareholder Servicing Fee (after estimated waiver)* ......... 0.00%
Other Expenses (after estimated waiver)* ..................... 0.60%#
-----
Total Fund Operating Expenses (after waivers of fees)* ...... 0.60%
=====

<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- -------- -------- --------
<S> <C> <C> <C> <C>
Shares+ ..................... $51 $63 $77 $117
</TABLE>

* Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such
waivers, the Investment Advisory Fee, 12b-1 Fee, Shareholder Servicing
Fee and Other Expenses would be 0.30%, 0.25%, 0.25%, and 0.70%,
respectively, and Total Fund Operating Expenses would be 1.50%.

** Long-term shareholders in mutual funds with 12b-1 fees, such as
shareholders of the Fund, may pay more than the economic equivalent of
the maximum front-end sales charge permitted by rules of the National
Association of Securities Dealers, Inc.

# Restated from most recent fiscal year to reflect current waiver
arrangements.

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

4
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the period ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
in the table below, have been audited by Price Waterhouse LLP, independent
accountants, whose report is included in the Annual Report to Shareholders.

VISTA CALIFORNIA INTERMEDIATE TAX FREE INCOME FUND

<TABLE>
<CAPTION>
Year ended
----------------------------------- 11/1/93 7/15/93*
through through
8/31/97 8/31/96 8/31/95 8/31/94+ 10/31/93
-------- ------- ------- -------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value, Beginning of Period ............... $ 9.81 $ 9.89 $ 9.69 $ 10.30 $ 10.22
--------- --------- --------- -------- ----------
Income From Investment Operations:
Net Investment Income ........................... 0.461 0.473 0.505 0.320 0.166
Net Gains or (Losses) in Securities
(both realized and unrealized) ............... 0.256 0.013 0.200 (0.408) 0.081
--------- ---------- ---------- -------- ----------
Total from Investment Operations ............... 0.717 0.486 0.705 (0.088) 0.247
--------- ---------- ---------- -------- ----------
Less Distributions:
Dividends from Net Investment Income ............ 0.458 0.476 0.505 0.404 0.165
Distributions from Capital Gains ............... -- 0.090 -- 0.118 --
--------- ---------- ---------- -------- ----------
Total distributions .............................. 0.458 0.566 0.505 0.522 0.165
--------- ---------- ---------- -------- ----------
Net Asset Value, End of Period ..................... $ 10.07 $ 9.81 $ 9.89 $ 9.69 $ 10.30
========= ========== ========== ======== ==========
Total Return(1) .................................... 7.46% 5.00% 7.55% (0.86%) 2.42%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ......... $ 25,525 $ 28,298 $ 32,746 $36,264 $ 41,728
Ratio of Expenses to Average Net Assets# ......... 0.60% 0.60% 0.52% 0.52% 0.52%
Ratio of Net Investment Income to Average
Net Assets# .................................... 4.65% 4.77% 5.24% 4.88% 4.83%
Ratio of Expenses without waivers and
assumption of expenses to Average Net Assets# ... 1.33% 1.47% 1.40% 1.37% 1.33%
Ratio of Net Investment Income without waivers
and assumption of expenses to Average
Net Assets# .................................... 3.92% 3.90% 4.36% 4.03% 4.02%
Portfolio Turnover Rate ........................... 66% 188% 94% 93% 40%
</TABLE>

* Commencement of offering shares.
+ In 1994 the California Intermediate Tax Free Income Fund changed its
fiscal year-end from October 31 to August 31.
(1) Total returns are calculated before taking into account effect of 4.50%
sales charge.
# Short periods have been annualized.

5
<PAGE>

FUND OBJECTIVE
- --------------
Vista California Intermediate Tax Free Income Fund seeks to provide current
income exempt from federal and California personal income taxes. The Fund is
not intended to be a complete investment program, and there is no assurance it
will achieve its objective.

INVESTMENT POLICIES
- -------------------
INVESTMENT APPROACH
The Fund invests primarily in California Municipal Obligations (as defined
under "Municipal Obligations"). As a fundamental policy, under normal market
conditions, the Fund will have at least 80% of its assets in California
Municipal Obligations or in securities of territories and political
subdivisions of the U.S. Government the interest on which is deemed to be
exempt from federal, state and local income taxes. The Fund reserves the right
under normal market conditions to invest up to 20% of its total assets in
securities which constitute a preference item which would be subject to the
alternative minimum tax for noncorporate investors ("AMT Items") or securities
the interest on which is subject to federal and California personal income
taxes. For temporary defensive purposes, the Fund may exceed this limitation.

The Fund's investments may include, among other instruments, fixed, variable or
floating rate general obligation and revenue bonds, zero coupon securities,
inverse floaters and bonds with interest rate caps. The Fund's Municipal
Obligations will be rated at time of purchase at least in the category Baa,
MIG-3 or VMIG-3 by Moody's Investors Service, Inc. ("Moody's"), BBB or SP-3 by
Standard & Poor's Corporation ("S&P"), or BBB or FIN-3 by Fitch Investors
Service, Inc. ("Fitch") or comparably rated by another national rating
organization, or, if unrated, considered by the Fund's advisers to be of
comparable quality.

The Fund's investments have an average maturity of 10 years or less. The Fund's
advisers may adjust the average maturity of the Fund's portfolio based upon
their assessment of the relative yields available on securities of different
maturities and their expectations of future changes in interest rates.

The Fund is classified as a "non-diversified" fund under federal securities
law. The Fund's assets may be more concentrated in the securities of any single
issuer or group of issuers than if the Fund were diversified.

WHO MAY WANT TO INVEST

The Fund may be most appropriate for investors who...
[bullet] Are seeking monthly income exempt from federal and state income tax
[bullet] Are investing for mid- to long-term investment goals

<PAGE>

[bullet] Own or plan to own other types of investments for diversification
purposes
[bullet] Can assume bond market (i.e., interest rate) risk

The Fund may NOT be appropriate for investors who are unable to tolerate any up
and down price changes, are investing for shorter-term goals or who are in need
of higher growth potential.

MUNICIPAL OBLIGATIONS
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, and their authorities,
agencies, instrumentalities and political subdivisions, the interest on which,
in the opinion of bond counsel, is exempt from federal income taxes (without
regard to whether the interest thereon is also exempt from the personal income
taxes of any state or whether the interest thereon constitutes a preference
item for purposes of the federal alternative minimum tax). "California
Municipal Obligations" are obligations of the State of California, its local
governments and political subdivisions, the interest on which, in the opinion
of bond counsel, is exempt from federal income taxes and California personal
income taxes and is not subject to the alternative minimum tax for noncorporate
investors. Municipal Obligations are issued to obtain funds for various public
purposes, such as the construction of public facilities, the payment of general
operating expenses or the refunding of outstanding debts. They may also be
issued to finance various private activities, including the lending of funds to
public or private institutions for the construction of housing, educational or
medical facilities, and may include certain types of industrial development
bonds, private activity bonds or notes issued by public authorities to finance
privately owned or operated facilities, or to fund short-term cash
requirements. Short-term Municipal Obligations may be issued as interim
financing in anticipation of tax collections, revenue receipts or bond sales to
finance various public purposes.

7
<PAGE>

MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. Certain investments in
municipal lease obligations may be illiquid.

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

MONEY MARKET INSTRUMENTS.

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

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

REPURCHASE AGREEMENTS AND FORWARD AND STAND-BY COMMITMENTS. The Fund may enter
into agreements to purchase and resell securities at an agreed-upon price and
time. The Fund may purchase securities for delivery at a future date, which may
increase its overall investment exposure and involves a risk of loss if the
value of the securities declines prior to the settlement date. The Fund may
enter into put transactions, including those sometimes referred to as stand-by
commitments, with respect to securities in its portfolio. In these
transactions, the Fund would acquire the right to sell a security at an agreed
upon price within a specified period prior to its maturity date. A put
transaction will increase the cost of the underlying security and consequently
reduce the available yield. Each of these transactions involve some risk to the
Fund if the other party should default on its obligation and the

8
<PAGE>

Fund is delayed or prevented from recovering the collateral or completing the
transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

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

9
<PAGE>

foreign banks involve certain risks associated with foreign investments. The
Internal Revenue Service has not ruled on whether interest on participations in
floating or variable rate municipal obligations is tax exempt and the Fund
would purchase such instruments based on opinions of bond counsel.

INVERSE FLOATERS AND INTEREST RATE CAPS. The Fund may invest in inverse
floaters and in securities with interest rate caps. Inverse floaters are
instruments whose interest rates bear an inverse relationship to the interest
rate on another security or the value of an index. The market value of an
inverse floater will vary inversely with changes in market interest rates, and
will be more volatile in response to interest rates changes than that of a
fixed-rate obligation. Interest rate caps are financial instruments under which
payments occur if an interest rate index exceeds a certain predetermined
interest rate level, known as the cap rate, which is tied to a specific index.
These financial products will be more volatile in price than municipal bonds
which do not include such a structure.

OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of its total assets
in shares of other investment companies, when consistent with its investment
objective and policies, subject to applicable regulatory limitations.
Additional fees may be charged by other investment companies.

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

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

10
<PAGE>

exceed the original investment of the Fund. There can be no assurance that a
liquid market will exist at a time when the Fund seeks to close out a
derivatives position. Activities of large traders in the futures and securities
markets involving arbitrage, "program trading," and other investment strategies
may cause price distortions in derivatives markets. In certain instances,
particularly those involving over-the-counter transactions or forward
contracts, there is a greater potential that a counterparty or broker may
default. In the event of a default, the Fund may experience a loss. For
additional information concerning derivatives, related instruments and the
associated risks, see the SAI.

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

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

RISK FACTORS
Changes in interest rates may affect the value of the obligations held by the
Fund. The value of fixed income securities varies inversely with changes in
prevailing interest rates. For a discussion of certain other risks associated
with the Fund's additional investment activities, see "Other Investment
Practices" and "Municipal Obligations."

Because the Fund will invest primarily in obligations issued by the State of
California and its cities, public authorities and other municipal issuers, the
Fund is susceptible to factors affecting the State of California and its
municipal issuers. The State of California and certain California counties have
a recent history of significant financial and fiscal difficulties. California's
Orange County recently defaulted on certain of its

11
<PAGE>

indebtedness. If the State of California or any of its local government
entities is unable to meet its financial obligations, the income derived by the
Fund and the Fund's ability to preserve capital and liquidity could be
adversely affected. See the SAI for further information.

Interest on certain Municipal Obligations (including certain industrial
development bonds), while exempt from federal income tax, is a preference item
for the purpose of the alternative minimum tax. Where a mutual fund receives
such interest, a proportionate share of any exempt-interest dividend paid by
the mutual fund may be treated as such a preference item to shareholders.
Federal tax legislation enacted over the past few years has limited the types
and volume of bonds which are not AMT Items and the interest on which is not
subject to federal income tax. This legislation may affect the availability of
Municipal Obligations for investment by the Fund.

The Fund may invest up to 25% of its total assets in Municipal Obligations
secured by letters of credit or guarantees from U.S. and foreign banks, and
other foreign institutions. The dependence on banking institutions may involve
certain credit risks, such as defaults or downgrades, if at some future date
adverse economic conditions prevail in the banking industry. U.S. banks are
subject to extensive governmental regulations which may limit both the amount
and types of loans which may be made and interest rates which may be charged.
In addition, the profitability of the banking industry is largely dependent
upon the availability and cost of funds for the purpose of financing lending
operations under prevailing money market conditions. General economic
conditions as well as exposure to credit losses arising from possible financial
difficulties of borrowers play an important part in the operations of this
industry.

Obligations backed by foreign banks, foreign branches of U.S. banks and foreign
governmental and private issuers involve investment risks in addition to those
of obligations of domestic issuers, including risks relating to future
political and economic developments, more limited liquidity of foreign
obligations than comparable domestic obligations, the possible imposition of
withholding taxes on interest income, the possible seizure or nationalization
of foreign assets, and the possible establishment of exchange controls or other
restrictions. There may be less publicly available information concerning
foreign issuers, there may be difficulties in obtaining or enforcing a judgment
against a foreign issuer (including branches) and accounting, auditing and
financial reporting standards and practices may differ from those applicable to
U.S. issuers. In addition, foreign banks are not subject to regulations
comparable to U.S. banking regulations.

12
<PAGE>

of similar projects, which may cause the Fund to be more susceptible to similar
economic, political, or regulatory developments, particularly in light of the
fact that the issuers in which the Fund invests will generally be located in
the State of California.

MANAGEMENT

THE FUND'S ADVISERS

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

For its investment advisory services to the Fund, Chase is entitled to receive
an annual fee computed daily and paid monthly at an annual rate equal to 0.30%
of the Fund's average daily net assets. Chase is located at 270 Park Avenue,
New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
Fund's sub-investment adviser under a Sub-Investment Advisory Agreement between
CAM and Chase. CAM is a wholly-owned operating subsidiary of Chase. CAM makes
investment decisions for the Fund on a day-to-day basis. For these services,
CAM is entitled to receive a fee, payable by Chase from its advisory fee, at an
annual rate equal to 0.15% of the Fund's average daily net assets. CAM provides
discretionary investment advisory services to institutional clients. The same
individuals who serve as portfolio managers for Chase also serve as portfolio
managers for CAM. CAM is located at 1211 Avenue of the Americas, New York, New
York 10036.

Pamela Hunter, Vice President of Chase, has been responsible for the day-to-day
management of the Fund since its inception in 1993. Ms. Hunter is part of a
team providing fixed income strategy and product development. Ms. Hunter has
been employed at Chase (including its predecessors) since 1980.

HOW TO BUY, SELL
AND EXCHANGE SHARES

HOW TO BUY SHARES

You can open a Fund account with as little as $2,500 for regular accounts,
$1,000 for traditional and Roth IRAs, SEP-IRAs and the Systematic Investment
Plan, or $500 for Education IRAs. Additional investments may be made at any
time with as little as $100. You can buy Fund shares three ways-through an
investment representative, through the Fund's distributor by calling the Vista
Service Center, or through the Systematic Investment Plan.

13
<PAGE>

which may take 15 calendar days or longer. In addition, the redemption of
shares purchased through Automated Clearing House (ACH) will not be allowed
until your payment clears, which may take 7 business days or longer.

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

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

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

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

An investor who purchases shares pays a sales charge at the time of purchase.
As a result, shares are not subject to any sales charges when they are
redeemed. Certain purchases of shares qualify for reduced sales charges. See
"How to Buy, Sell and Exchange Shares" and "Other Information Concerning the
Fund."

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

<PAGE>

<TABLE>
<CAPTION>
Sales charge as a
percentage of:
------------------------
Amount of sales charge
Amount of transaction at Offering Net amount reallowed to dealers as a
offering price($) Price invested percentage of offering price
- ----------------------------- -------- ---------- ----------------------------
<S> <C> <C> <C>
Under 100,000 4.50 4.71 4.00
100,000 but under 250,000 3.75 3.90 3.25
250,000 but under 500,000 2.50 2.56 2.25
500,000 but under 1,000,000 2.00 2.04 1.75
</TABLE>

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

The Fund's distributor pays broker-dealers commissions on net sales of shares
of $1 million or more based on an investor's cumulative purchases. Such
commissions are paid at the rate of 0.75% of the amount under $2.5 million,
0.50% of the next $7.5 million, 0.25% of the next $40 million and 0.15%
thereafter. The Fund's distributor may withhold such payments with respect to
short-term investments.

GENERAL

You may be eligible to buy shares at reduced sales charges. Consult your
investment representative or the Vista Service Center for details about Vista's
combined purchase privilege, cumulative quantity discount, statement of
intention, group sales plan, employee benefit plans, and other plans.
Descriptions are also included in the enclosed application and in the SAI. For
purchases of the Fund's shares made from January 1, 1998 through December 31,
1998, no initial sales charge will be assessed if you are using redemption
proceeds received within the prior ninety days from non-Vista mutual funds to
buy your shares and are opening or adding to a Vista prototype IRA with a
transfer of assets or rollover from a qualified plan. If you use such
redemption proceeds to open or add to a Vista prototype IRA, the Fund's
distributor will pay broker-dealers commissions on the net sales of shares at
the rate of 1%. In addition, sales charges are waived if you are using
redemption proceeds received within the prior ninety days from non-Vista mutual
funds to buy your shares, and on which you paid a front-end or contingent
deferred sales charge.

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

The Fund may sell shares at net asset value without an initial sales charge to
the current and retired Trustees (and their immediate families), current and
retired employees (and their immediate families) of Chase, the Fund's
distributor and transfer agent or any affiliates or subsidiaries thereof,
registered representatives and other employees (and their immediate families)
of broker-dealers having selected dealer agreements with the Fund's
distributor, employees (and their

15
<PAGE>

immediate families) of financial institutions having selected dealer agreements
with the Fund's distributor (or otherwise having an arrangement with a
broker-dealer or financial institution with respect to sales of Vista Fund
shares), financial institution trust departments investing an aggregate of $1
million or more in the Vista Family of Funds and clients of certain
administrators of tax-qualified plans when proceeds from repayments of loans to
participants are invested (or reinvested) in the Vista Family of Funds.

For purchases of the Fund's shares made from January 1, 1998 through December
31, 1998, no initial sales charge will be assessed if you are investing the
proceeds of an IRA for which The Chase Manhattan Bank or its designee serves as
trustee or custodian. No initial sales charge will apply to the purchase of the
Fund's shares if you are investing the proceeds of a qualified retirement plan
where a portion of the plan was invested in the Vista Family of Funds, any
qualified retirement plan with 50 or more participants, or an individual
participant in a tax-qualified plan making a tax-free rollover or transfer of
assets from the plan in which Chase or an affiliate serves as trustee or
custodian of the plan or manages some portion of the plan's assets.

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

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

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

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

The Fund may sell shares at net asset value without an initial sales charge in
connection with the acquisition by the Fund of assets of an investment company
or personal holding company. The SAI contains additional information about
purchasing the Fund's shares at reduced sales charges.

16
<PAGE>

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

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

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

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

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

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

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

TELEPHONE REDEMPTIONS.
You may use Vista's Telephone Redemption Privilege to redeem shares from your
account unless you have notified the Vista Service

17
<PAGE>

Center of an address change within the preceding 15 days. Telephone redemption
requests in excess of $25,000 will only be made by wire to a bank account on
record with the Fund. There is a $10.00 charge for each wire transaction.
Unless an investor indicates otherwise on the account application, the Fund
will be authorized to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as his or her
representative, who can provide the Fund with his or her account registration
and address as it appears on the Fund's records.

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

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

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

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

INVOLUNTARY REDEMPTION OF ACCOUNTS. The Fund may involuntarily redeem your
shares if at such time the aggregate net asset value of the shares in your
account is less than $500 due to redemptions or if you purchase through the
Systematic Investment Plan and fail to meet the Fund's investment minimum
within a twelve month period. In the event of any such redemption, you will
receive at least 60 days notice prior to the redemption.

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other
Vista funds at net asset value

18
<PAGE>

beginning 15 days after purchase. Not all Vista funds offer all classes of
shares. The prospectus of the other Vista fund into which shares are being
exchanged should be read carefully and retained for future reference.

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

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

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

REINSTATEMENT PRIVILEGE.

Upon written request, shareholders have a one time privilege of reinstating
their investment in the Fund at net asset value next determined subject to
written request within 90 calendar days of the redemption. The reinstatement
request must be accompanied by payment for the shares (not in excess of the
redemption), and shares will be purchased at the next determined net asset
value.

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

19
<PAGE>

Distributions from capital gains are made after applying any available capital
loss carryovers.

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

If a check representing a Fund distribution is not cashed within a specified
period, the Vista Service Center will notify you that you have the option of
requesting another check or reinvesting the distribution in the Fund or in an
established account of another Vista fund. If the Vista Service Center does not
receive your election, the distribution will be reinvested in the Fund.
Similarly, if the Fund or the Vista Service Center sends you correspondence
returned as "undeliverable," distributions will automatically be reinvested in
the Fund.

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

TAXATION OF DISTRIBUTIONS.

Distributions by the Fund of its tax-exempt interest income will not be subject
to federal income tax, but generally will be subject to state and local taxes.
However, to the extent paid out of interest on California Municipal
Obligations, such distributions will also be exempt from California personal
income taxes for a California individual resident shareholder.

All other Fund distributions of net investment income will be taxable as
ordinary income. Any distributions of net capital gain which are designated as
"capital gain dividends" will be taxable as long-term capital gain, regardless
of how long you have held the shares. The taxation of your distributions will
be the same whether received in cash or in shares through the reinvestment of
distributions.

20
<PAGE>

the net asset value per share will be higher on the date of such purchase as it
will include the distribution amount.

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

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLAN

The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Trust
has adopted a Rule 12b-1 distribution plan which provides for the payment of
distribution fees at annual rates of up to 0.25% of the average daily net
assets attributable to shares of the Fund. Payments under the distribution plan
shall be used to compensate or reimburse the Fund's distributor and
broker-dealers for services provided and expenses incurred in connection with
the sale of shares, and are not tied to the amount of actual expenses incurred.
Payments may be used to compensate broker-dealers with trail or maintenance
commissions at an annual rate of up to 0.25% of the average daily net asset
value of shares maintained in the Fund by customers of these broker-dealers.
Trail or maintenance commissions are paid to broker-dealers beginning the 13th
month following the purchase of shares by their customers. Promotional
activities for the sale of shares will be conducted generally by the Vista
Family of Funds, and activities intended to promote the Fund's shares may also
benefit the Fund's other shares and other Vista funds.

VFD may provide promotional incentives to broker-dealers that meet specified
targets for one or more Vista Funds. These incentives may include gifts of up
to $100 per person annually, an occassional meal, ticket to a sporting event or
theater for entertainment for broker- dealers and their guests; and payment or
reimbursements for travel expenses, including lodging and meals, in connection
with attendance at training and educational meetings within and outside the
U.S. VFD may from time to time, pursuant to objective criteria established by
it, pay additional compensation to qualifying authorized broker-dealers for
certain services or activities which are primarily intended to result in sales
of shares of the Fund. In some instances, such cash compensation may be offered
only to certain broker-dealers who employ registered representatives who have
sold or may sell significant amounts of shares of the Fund and/or the other
Vista Funds during a specified period of time. Such compensation does not
represent an additional expense to the Fund or its shareholders, since it will
be paid

21
<PAGE>

by VFD out of compensation retained by it from the Fund or other sources
available to it.

SHAREHOLDER
SERVICING AGENTS

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

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

22
<PAGE>

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

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

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

23
<PAGE>

shares held in the treasury of the Trust shall not be voted.

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

PERFORMANCE
INFORMATION

The Fund's investment performance may from time to time be included in
advertisements about the Fund. "Yield" is calculated by dividing the annualized
net investment income calculated pursuant to federal rules per share during a
recent 30-day period by the maximum public offering price per share of such
class on the last day of that period. "Effective yield" is the "yield"
calculated assuming the reinvestment of income earned, and will be slightly
higher than the "yield" due to the compounding effect of this assumed
reinvestment. "Tax equivalent yield "is the yield that a taxable fund would
have to generate in order to produce an after-tax yield equivalent to the
Fund's yield. The tax equivalent yield of the Fund can then be compared to the
yield of a taxable fund. Tax equivalent yields can be quoted on either a
"yield" or "effective yield" basis.

24
<PAGE>

Total return may also be presented for other periods or without reflecting
sales charges. Any quotation of investment performance not reflecting the
maximum initial sales charge or contingent deferred sales charge would be
reduced if such sales charges were used.

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

25
<PAGE>

MAKE THE MOST OF YOUR VISTA PRIVILEGES

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

[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.

[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
monthly, quarterly or semiannually. A minimum account balance of
$5,000 is required to establish a systematic withdrawal plan.

[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Vista
account to another on a regular, prearranged basis. There is no
additional charge for this service.

[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Vista funds in the same
class of shares without charge. The exchange privilege allows you to
adjust your investments as your objectives change. Investors may not
maintain, within the same fund, simultaneous plans for systematic
investment or exchange and systematic withdrawal or exchange.

[bullet] REINSTATEMENT PRIVILEGE--Shareholders have a one time privilege of
reinstating their investment in the Fund at net asset value next
determined subject to written request within 90 calendar days of the
redemption, accompanied by payment for the shares (not in excess of
the redemption).

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

26
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

[CHASE VISTA LOGO]

INSTITUTIONAL(SM) SHARES

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Funds in their December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call the Vista Service Center at 1-800-622-4273. The SAI has been
filed with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference.

INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

<PAGE>

(This Page Intentionally Left Blank)

2
<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you pay on your Fund investment, including examples
Financial Highlights ...................................................... 6
The Funds' financial history
Fund Objectives and Investment Approach
Vista 100% U.S. Treasury Securities Money Market Fund ..................... 13
Vista Treasury Plus Money Market Fund .................................... 13
Vista Federal Money Market Fund .......................................... 13
Vista U.S. Government Money Market Fund .................................... 14
Vista Cash Management Fund ................................................ 14
Vista Prime Money Market Fund ............................................. 14
Vista Tax Free Money Market Fund .......................................... 15
Common Investment Policies ................................................ 15
Management .................................................................. 23
Chase Manhattan Bank, the Funds' adviser; Chase Asset Management and
Texas Commerce Bank, the Funds' sub-advisers
How to Buy, Sell and Exchange Shares ....................................... 23
How the Funds Value Their Shares .......................................... 26
How Dividends and Distributions Are Made; Tax Information .................. 27
How the Funds distribute their earnings, and tax treatment related to those
earnings
Other Information Concerning the Funds .................................... 28
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 31
How performance is determined, stated and/or advertised

3
<PAGE>

EXPENSE SUMMARY

Charges or credits, not reflected in the expense table below, may be incurred
directly by customers of financial institutions in connection with an
investment in a Fund.

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

<TABLE>
<CAPTION>
Vista 100%
U.S. Treasury Vista Vista
Securities Treasury Plus Federal
Money Money Money
Market Market Market
Fund Fund Fund
-------------- --------------- ---------------
Institutional Institutional Institutional
Shares Shares Shares
-------------- --------------- ---------------
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ........................... 0.10% 0.10% 0.10%
12b-1 Fee .......................................... n/a n/a n/a
Shareholder Servicing Fee ........................... n/a n/a n/a
Other Expenses (after estimated waiver of fees, where
indicated) ....................................... 0.11%*# 0.10%*# 0.17%
Total Fund Operating Expenses (after waivers of fees,
where indicated) ................................. 0.21%*# 0.20%*# 0.27%
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 year ............................................. $ 2 $ 2 $ 3
3 years ............................................. 7 6 9
5 years ............................................. 12 11 15
10 years .......................................... 27 26 34

<CAPTION>
Vista U.S. Vista Vista Vista
Government Cash Prime Tax Free
Money Manage- Money Money
Market ment Market Market
Fund Fund Fund Fund
-------------- ------------- ------------- -------------
Institutional Institutional Institutional Institutional
Shares Shares Shares Shares
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ........................... 0.10% 0.10% 0.10% 0.10%
12b-1 Fee .......................................... n/a n/a n/a n/a
Shareholder Servicing Fee ........................... n/a n/a n/a n/a
Other Expenses (after estimated waiver of fees, where
indicated) ....................................... 0.14% 0.14% 0.15% 0.16%
Total Fund Operating Expenses (after waivers of fees,
where indicated) ................................. 0.24% 0.24% 0.25% 0.26%
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 year ............................................. $ 2 $ 2 $ 3 $ 3
3 years ............................................. 8 8 8 8
5 years ............................................. 14 14 14 15
10 years .......................................... 31 31 32 33
</TABLE>

* Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, Other Expenses would be 0.16% and 0.15% for Vista 100% U.S.
Treasury Securities Money Market Fund and Vista Treasury Plus Money
Market Fund, respectively, and Total Fund Operating Expenses would be
0.26% and 0.25% for Vista 100% U.S. Treasury Securities Money Market
Fund and Vista Treasury Plus Money Market Fund, respectively.
# Restated from most recent fiscal year to reflect current waiver
arrangements.

<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the period ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND

<TABLE>
<CAPTION>
Year 6/3/96*
ended through
8/31/97 8/31/96
-------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................ $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income .................................... 0.051 0.012
Less Distributions:
Dividends from net investment income ..................... 0.051 $ 0.12
========= =========
Net Asset Value, End of Period .............................. $ 1.00 $ 1.00
TOTAL RETURN 5.20% 1.23%
========= =========
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ..................... $ 81,273 $ 1
Ratio of Expenses to Average Net Assets# .................. 0.27% 0.21%
Ratio of Net Investment Income to Average Net Assets# ...... 5.06% 3.65%
Ratio of Expenses without waivers and assumption of expenses
to Average Net Assets# .................................... 0.27% 0.21%
Ratio of Net Investment Income without waivers and assumption
of Expenses to Average Net Assets# ........................ 5.06% 3.65%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

6
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA TREASURY PLUS MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 4/20/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/95
--------- --------- -------- -------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------
Income From Investment Operations:
Net Investment Income .............................. 0.051 0.052 0.053 0.014
--------- --------- --------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.051 0.052 0.053 0.014
--------- --------- --------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ==========
TOTAL RETURN 5.24% 5.29% 5.36% 1.45%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............... $291,546 $188,513 $ 17,636 $ 14,976
Ratio of Expenses to Average Net Assets# ............ 0.26% 0.30% 0.32% 0.32%
Ratio of Net Investment Income to
Average Net Assets# ................................. 5.16% 5.11% 5.21% 3.93%
Ratio of Expenses without waivers and
assumption of expenses to Average Net Assets# ...... 0.26% 0.38% 0.89% 0.53%
Ratio of Net Investment Income without waivers and
assumption of Expenses to Average Net Assets# ...... 5.16% 5.03% 4.64% 3.72%
</TABLE>

* Commencement of operations.

# Short periods have been annualized.

7
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA FEDERAL MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 4/20/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------
Income From Investment Operations:
Net Investment Income ........................... 0.052 0.052 0.054 0.015
--------- --------- --------- ----------
Less Distributions:
Dividends from Net Investment Income ............ 0.052 0.052 0.054 0.015
--------- --------- --------- ----------
Net Asset Value, End of Period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ==========
TOTAL RETURN 5.35% 5.35% 5.57% 1.54%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ......... $130,659 $141,312 $113,591 $ 117,364
Ratio of Expenses to Average Net Assets# ......... 0.27% 0.30% 0.31% 0.30%
Ratio of Net Investment Income to
Average Net Assets# ........................... 5.23% 5.20% 5.45% 4.26%
Ratio of Expenses without waivers and
assumption of expenses to Average Net Assets# ... 0.27% 0.30% 0.37% 0.49%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ... 5.23% 5.20% 5.39% 4.06%
</TABLE>

* Commencement of operations.
# Short periods have been annualized.

8
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain obtain
a copy of this annual report by contacting the Fund. The financial statements
and notes, as well as the financial information set forth in the table below,
have been audited by Price Waterhouse LLP, independent accountants, whose
report thereon is included in the Annual Report to Shareholders.

VISTA U.S. GOVERNMENT MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 12/10/93*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94+
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- --------- -----------
Income from Investment Operations:
Net Investment Income ........................ 0.053 0.053 0.055 0.026
----------- ----------- --------- -----------
Less Distributions:
Dividends from net investment income ......... 0.053 0.053 0.055 0.026
----------- ----------- --------- -----------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== ========= ===========
TOTAL RETURN 5.40% 5.45% 5.60% 2.61%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ......... $2,955,206 $1,181,763 $466,083 $ 212,810
Ratio of Expenses to Average Net Assets# ......... 0.24% 0.27% 0.27% 0.27%
Ratio of Net Investment Income to
Average Net Asset# ........................... 5.29% 5.30% 5.58% 3.81%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# ............ 0.24% 0.27% 0.28% 0.27%
Ratio of Net Investment Income without waivers and
assumption of Expenses to Average Net Assets# 5.29% 5.30% 5.57% 3.81%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

9
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout the period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the period ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA CASH MANAGEMENT FUND

<TABLE>
<CAPTION>
Year 5/6/96*
ended through
8/31/97 8/31/96
--------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................ $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income .................................... 0.053 0.017
Less Distributions:
Dividends from Net Investment Income ..................... 0.053 0.017
Net Asset Value, End of Period .............................. $ 1.00 $ 1.00
========= =========
TOTAL RETURN 5.45% 1.69%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ..................... $924,099 $657,002
Ratio of Expenses to Average Net Assets# .................. 0.24% 0.25%
Ratio of Net Investment Income to Average Net Asset# ...... 5.34% 5.22%
Ratio of Expenses without waivers and assumption of expenses
to Average Net Assets# .................................... 0.24% 0.25%
Ratio of Net Investment Income without waivers and assumption
of Expenses to Average Net Assets# ........................ 5.34% 5.22%
</TABLE>

* Commencement of offering shares.

# Short periods have been annualized.

10
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA PRIME MONEY MARKET FUND

Year Year Year 4/26/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94+
----------- --------- --------- -------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- --------- --------- ----------
Income From Investment Operations:
Net Investment Income .............................. 0.054 0.054 0.055 0.014
Net Gains or (Losses) in Securities
(both realized and unrealized) ..................... -- -- (0.003) --
----------- --------- --------- ----------
Total from Investment Operations ..................... 0.054 0.054 0.052 0.014
----------- --------- --------- ----------
Voluntary Capital Contribution ........................ -- -- 0.003 --
----------- --------- --------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.054 0.054 0.055 0.014
----------- --------- --------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========= ========= ==========
TOTAL RETURN 5.49% 5.51% 5.62% 1.50%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............... $1,347,651 $724,544 $185,640 $ 57,961
Ratio of Expenses to Average Net Assets# ............ 0.25% 0.26% 0.27% 0.27%
Ratio of Net Investment Income to
Average Net Assets# ................................. 5.37% 5.33% 5.57% 4.21%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# .................. 0.25% 0.26% 0.35% 0.37%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 5.37% 5.33% 5.49% 4.11%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

11
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Institutional Share outstanding throughout each period shown. This information
is supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund. The financial statements and
notes, as well as the financial information set forth in the table below, have
been audited by Price Waterhouse LLP, independent accountants, whose report
thereon is included in the Annual Report to Shareholders.

VISTA TAX FREE MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 11/1/93*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ----------
Income from Investment Operations:
Net Investment Income ........................... 0.036 0.034 0.035 0.019
--------- --------- --------- ----------
Less Distributions:
Dividends from Net Investment Income ............ 0.036 0.034 0.035 0.019
--------- --------- --------- ----------
Net Asset Value, End of Period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ==========
TOTAL RETURN 3.45% 3.40% 3.53% 1.95%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ......... $286,204 $148,536 $108,494 $ 110,332
Ratio of Expenses to Average Net Assets# ......... 0.26% 0.31% 0.33% 0.34%
Ratio of Net Investment Income to
Average Net Assets# ........................... 3.41% 3.33% 3.46% 2.38%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# ............ 0.26% 0.31% 0.34% 0.34%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ... 3.41% 3.33% 3.45% 2.38%
</TABLE>

* Commencement of offering shares.

# Short periods have been annualized.

12
<PAGE>

FUND OBJECTIVES AND
INVESTMENT APPROACH

- -------------------
VISTA 100% U.S. TREASURY
SECURITIES MONEY MARKET FUND
The Fund's objective is to provide maximum current income consistent with
maximum safety of principal and maintenance of liquidity.

VISTA TREASURY PLUS MONEY
MARKET FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

The Fund invests in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, which differ principally only in their interest rates,
maturities and dates of issuance. In addition, the Fund will seek to enhance
its yield by investing in repurchase agreements which are fully collateralized
by obligations issued or guaranteed by the U.S. Treasury. The dollar weighted
average maturity of the Fund will be 60 days or less.

VISTA FEDERAL MONEY
MARKET FUND
The Fund's objective is to provide current income consistent with preservation
of capital and maintenance of liquidity.

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

Shareholders of the above Funds that reside in a state that imposes an income
tax should determine through consultation with their own tax advisors whether
such interest income, when distributed by the Fund, will be considered by the
state to have retained exempt status, and whether the Fund's capital gains and
other income, if any, when distributed will be subject to the state's income
tax. See "How Dividends and Distributions are Made; Tax Information."

13
<PAGE>

VISTA U.S. GOVERNMENT MONEY
MARKET FUND
The Fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and maintenance of liquidity.

The Fund invests substantially all of its assets in obligations issued or
guaranteed by the U.S. Treasury, or agencies or instrumentalities of the U.S.
Government, and in repurchase agreements collateralized by these obligations.
The dollar weighted average maturity of the Fund will be 60 days or less.

VISTA CASH MANAGEMENT FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and the maintenance of liquidity.

VISTA PRIME MONEY
MARKET FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

14
<PAGE>

(iv) securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and (v) repurchase agreements. The dollar weighted average
maturity of the Fund will be 60 days or less.

COMMON INVESTMENT
POLICIES
- --------
In lieu of investing directly, each Fund is authorized to seek to achieve its
objective by investing all of its investable assets in an investment company
having substantially the same investment objective and policies as the
applicable Fund.

Each Fund seeks to maintain a net asset value of $1.00 per share.

The Funds invest only in U.S. dollar-denominated high quality obligations which
are determined to present minimal credit risks. This credit determination must
be made in accordance with procedures established by the Board of Trustees.
Each investment must be rated in the highest short-term rating category by at
least two national rating organizations ("NROs") (or one NRO if the instrument
was rated only by one such organization) or, if unrated, must be determined to
be of comparable quality in accordance with the procedures of the Trust. If a
security has an unconditional guarantee or similar enhancement, the issuer of
the guarantee or enhancement may be relied upon in meeting these ratings
requirements rather than the issuer of the security. Securities in which the
Funds invest may not earn as high a level of current income as long-term or
lower quality securities.

The Funds purchase only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations.

Although each Fund seeks to be fully invested, at times it may hold

15
<PAGE>

uninvested cash reserves, which would adversely affect its yield.

There can be no assurance that any Fund will achieve its investment objective.

OTHER INVESTMENT PRACTICES
The Funds may also engage in the following investment practices when consistent
with their overall objectives and policies. These practices, and certain
associated risks, are more fully described in the SAI.

REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. Each Fund other than Vista 100% U.S. Treasury Securities Money
Market Fund and Vista Federal Money Market Fund may enter into agreements to
purchase and resell securities at an agreed-upon price and time. Each Fund
other than the Vista Tax Free Money Market Fund also has the ability to lend
portfolio securities in an amount equal to not more than 30% of its total
assets to generate additional income. These transactions must be fully
collateralized at all times. Each Fund may purchase securities for delivery at
a future date, which may increase its overall investment exposure and involves
a risk of loss if the value of the securities declines prior to the settlement
date. Each Fund may enter into put transactions, including those sometimes
referred to as stand-by commitments, with respect to securities in its
portfolio. In these transactions, a Fund would acquire the right to sell a
security at an agreed upon price within a specified period prior to its
maturity date. A put transaction will increase the cost of the underlying
security and

16
<PAGE>

consequently reduce the available yield. Each of these transactions involve
some risk to a Fund if the other party should default on its obligation and the
Fund is delayed or prevented from recovering the collateral or completing the
transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

17
<PAGE>

variable rate nature of these investments, a Fund's yield may decline and it
may forego the opportunity for capital appreciation during periods when
interest rates decline; however, during periods when interest rates increase, a
Fund's yield may increase and it may have reduced risk of capital depreciation.
Demand features on certain floating or variable rate securities may obligate a
Fund to pay a "tender fee" to a third party. Demand features provided by
foreign banks involve certain risks associated with foreign investments. The
Internal Revenue Service has not ruled on whether interest on participations in
floating or variable rate municipal obligations is tax exempt, and the Tax Free
Fund would purchase such instruments based on opinions of bond counsel.

ADDITIONAL INVESTMENT
POLICIES OF VISTA CASH
MANAGEMENT FUND AND VISTA PRIME MONEY MARKET FUND
Vista Cash Management Fund and Vista Prime Money Market Fund may also invest in
the following instruments, when consistent with their overall objectives and
policies. These instruments, and certain associated risks, are more fully
described in the SAI.

18
<PAGE>

may invest. Dividends paid by these Funds that are derived from interest on
municipal obligations will be taxable to shareholders for federal income tax
purposes.

ADDITIONAL INVESTMENT
POLICIES OF VISTA TAX FREE
MONEY MARKET FUND
The following provides additional information regarding the permitted
investments of Vista Tax Free Money Market Fund. These investments, and certain
associated risks, are more fully described in the SAI.

19
<PAGE>

Municipal Obligations may be issued as interim financing in anticipation of tax
collections, revenue receipts or bond sales to finance various public purposes.
The Municipal Obligations in which the Fund invests may consist of municipal
notes, municipal commercial paper and municipal bonds maturing or deemed to
mature in 397 days or less.

MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. The Fund will limit its investments in
non-appropriation leases to 10% of its assets. Although "non-appropriation"
lease obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. Certain investments
in municipal lease obligations may be illiquid.

20
<PAGE>

the other Funds); (b) investing more than 10% of its net assets in illiquid
securities (which include securities restricted as to resale unless they are
determined to be readily marketable in accordance with procedures established
by the Board of Trustees); or (c) investing more than 25% of its total assets
in any one industry (excluding U.S. Government Obligations, bank obligations
and, for the Vista Tax Free Money Market Fund, obligations of states, cities,
municipalities or other public authorities, as well as municipal obligations
secured by bank letters of credit or guarantees). A complete description of
these and other investment policies is included in the SAI. Except for each
Fund's investment objective, restriction (c) above and investment policies
designated as fundamental above or in the SAI, the Funds' investment policies
are not fundamental. The Trustees may change any non-fundamental investment
policy without shareholder approval.

21
<PAGE>

domestic obligations, the possible imposition of withholding taxes on interest
income, the possible seizure or nationalization of foreign assets, and the
possible establishment of exchange controls or other restrictions. There may be
less publicly available information concerning foreign issuers, there may be
difficulties in obtaining or enforcing a judgment against a foreign issuer
(including branches), and accounting, auditing and financial reporting
standards and practices may differ from those applicable to U.S. issuers. In
addition, foreign banks are not subject to regulations comparable to U.S.
banking regulations.

VISTA TAX FREE MONEY MARKET FUND. This Fund may invest without limitation in
Municipal Obligations secured by letters of credit or guarantees from U.S.
banks (including their foreign branches), and may also invest in Municipal
Obligations backed by foreign institutions. These investments are subject to
the considerations discussed in the preceding paragraphs relating to Vista Cash
Management Fund and Vista Prime Money Market Fund. Changes in the credit
quality of banks or other financial institutions backing the Fund's Municipal
Obligations could cause losses to the Fund and affect its share price. Credit
enhancements which are supplied by foreign or domestic banks are not subject to
federal deposit insurance.

22
<PAGE>

MANAGEMENT
- ----------
THE FUNDS' ADVISERS

HOW TO BUY, SELL
AND EXCHANGE SHARES

HOW TO BUY SHARES
Institutional Shares may be purchased through selected financial service firms,
such as broker-dealer firms and banks ("Dealers") who have entered into a
selected dealer agreement with the Funds' distributor on each business day
during which the Federal Reserve Bank of New York and the New York Stock
Exchange are open for business ("Fund Business Day"). Qualified investors are
defined as institutions, trusts, partnerships, corporations, qualified and
other retirement plans and fiduciary accounts opened by a bank, trust company
or thrift institution which

23
<PAGE>

exercises investment authority over such accounts.

Institutional Shares are sold without a sales load at the net asset value next
determined after the Vista Service Center receives your order in proper form on
any Fund Business Day. To receive that day's dividend, the Vista Service Center
or Dealer must generally receive your order prior to a Fund's Cut-off Time. The
Funds' Cut-off Times (Eastern time) are as follows:

Vista 100% U.S. Treasury
Securities Money Market
Fund ..................... Noon
Vista Tax Free Money Market
Fund ..................... Noon
Vista Federal Money Market
Fund ..................... 2:00 p.m.
Vista U.S. Government Money
Market Fund ............... 2:00 p.m.
Vista Cash Management Fund ... 2:00 p.m.
Vista Prime Money Market Fund .2:00 p.m.
Vista Treasury Plus Money
Market Fund ............... 4:00 p.m.

Each Fund reserves the right to set an earlier Cut-off Time on any Fund
Business Day on which the Public Securities Association ("PSA") recommends an
early close to trading on the U.S. Government securities market. Generally,
such earlier Cut-off Time will be noon (Eastern time). The PSA is the trade
association that represents securities firms and banks that underwrite, trade
and sell debt securities, both domestically and internationally. Orders
received for shares after a Fund's Cut-off Time and prior to 4:00 p.m., Eastern
time on any Fund Business Day will not be accepted and executed on the same day
except at the Funds' discretion. Orders received and not accepted after a
Fund's Cut-off Time will be considered received prior to the Fund's Cut-off
Time on the following Fund Business Day and processed accordingly. Orders for
shares received and accepted prior to the Cut-off Times will be entitled to all
dividends declared on that day. The Funds reserve the right to reject any
purchase order.

All purchases of Institutional Shares must be paid for by federal funds wire.
If federal funds are not received by the Vista Service Center by 4:00 Eastern
time on the day of the purchase order, the order will be canceled. Any order
received after the Cut-off Times noted above will not be accepted. Any funds
received in connection with late orders will be invested on the next Fund
Business Day.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

Dealers may offer additional services to their customers, including customized
procedures for the purchase and redemption of Institutional Shares, such as
pre-authorized or systematic purchase and withdrawal programs, "sweep" checking
programs, cash advances, automated access and direct demand deposit debit.

MINIMUM INVESTMENTS. Each Fund has established a minimum initial investment
amount of $1,000,000 for the purchase of Institutional Shares. Shareholders
must maintain an average account balance of $1,000,000 in the Institutional
Shares of a Fund at all times. There is no minimum for subsequent investments.

24
<PAGE>

HOW TO SELL SHARES
You may redeem all or any portion of the shares in your account on any Fund
Business Day at the net asset value next determined after a redemption request
in proper form is furnished by you to your Dealer and transmitted to and
received by the Vista Service Center. A wire redemption may be requested by
telephone to the Vista Service Center. For telephone redemptions, call the
Vista Service Center at 1-800-622-4273.

In making redemption requests, the names of the registered shareholders on your
account and your account number must be supplied. The price you receive is the
next net asset value calculated after the Fund receives your request in proper
form. In order to allow the advisers to most effectively manage the Funds,
investors are urged to make redemption requests as early in the day as
possible.

DELIVERY OF PROCEEDS.
Payment for redemption requests received in proper form prior to a Fund's
Cut-off Time but no later than 2:00 p.m., Eastern time is normally made in
federal funds wired to the redeeming shareholder on the same Fund Business Day.
Payment for redemption requests received after the Cut-off Time or 2:00 p.m.,
Eastern time is normally made in federal funds wired to the redeeming
shareholder on the next Fund Business Day. Under unusual circumstances, the
Funds may suspend redemptions, or postpone payment for more than seven business
days, as permitted by federal securities laws.

TELEPHONE REDEMPTIONS.
You may use Vista's Telephone Redemption Privilege to redeem shares from your
account unless you have notified the Vista Service Center of an address change
within the preceding 30 days. Telephone redemption requests in excess of
$25,000 will only be made by wire to a bank account on record with the Funds.
There is a $10.00 charge for each wire transaction. Unless an investor
indicates otherwise on the account application, the Funds will be authorized to
act upon redemption and transfer instructions received by telephone from a
shareholder, or any person claiming to act as his or her representative, who
can provide the Funds with his or her account registration and address as it
appears on the Funds' records.

During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Vista Service Center by telephone. In this
event, you may wish to submit a written

25
<PAGE>

redemption request, or contact your Dealer. The Telephone Redemption Privilege
may be modified or terminated without notice.

SELLING SHARES THROUGH YOUR DEALER. Your Dealer must receive your request
before the Cut-off Time for your Fund to receive that day's net asset value.
Your representative will be responsible for furnishing all necessary
documentation to the Vista Service Center.

INVOLUNTARY REDEMPTION OF ACCOUNTS. Each Fund may involuntarily redeem your
shares if the aggregate net asset value of the shares of that Fund in your
account is less than $1,000,000 due to redemptions. In the event of any such
redemption, you will receive at least 60 days' notice prior to the redemption.

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for Institutional Shares of certain other Vista
money market funds at net asset value and for certain classes of shares of the
Vista non-money market funds at net asset value plus any applicable sales
charge, subject to any minimum investment requirement. Not all Vista funds
offer all classes of shares. The prospectus of the other Vista fund into which
shares are being exchanged should be read carefully and retained for future
reference.

EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Vista Service Center for procedures for telephone transactions. Ask
your investment representative or the Vista Service Center for prospectuses of
other Vista Funds. Please read the prospectus carefully before investing and
keep it for future reference. Shares of certain Vista Funds are not available
to residents of all states.

26
<PAGE>

the anticipated introduction of a new automated share purchase program by
certain Dealers, the net asset value of shares of each class of Funds available
through the program will also be determined as of 6:00 p.m., Eastern time on
each Fund Business Day.

The portfolio securities of each Fund are valued at their amortized cost in
accordance with federal securities laws, certain requirements of which are
summarized under "Common Investment Policies." This method increases stability
in valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price a Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share of each Fund will remain constant at $1.00 and the Funds will employ
specific investment policies and procedures to accomplish this result, although
no assurance can be given that they will be able to do so on a continuing
basis. The Board of Trustees will review the holdings of each Fund at intervals
it deems appropriate to determine whether that Fund's net asset value
calculated by using available market quotations (or an appropriate substitute
which reflects current market conditions) deviates from $1.00 per share based
upon amortized cost. In the event the Trustees determine that a deviation
exists that may result in material dilution or other unfair results to
investors or existing shareholders, the Trustees will take such corrective
action as they regard as necessary and appropriate.

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

The net investment income of each class of shares of each Fund is declared as a
dividend to the shareholders each Fund Business Day. Dividends are declared as
of the time of day which corresponds to the latest time on that day that a
Fund's net asset value is determined. Shares begin accruing dividends on the
day they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by ACH to a pre-established bank
account, dividends are distributed in the form of additional shares of the same
share class. Dividends that are otherwise taxable are still taxable to you
whether received in cash or additional shares. Net realized short-term capital
gains, if any, will be distributed at least annually. The Funds do not expect
to realize net long-term capital gains.

27
<PAGE>

not make distributions as it intends, the Fund will be subject to tax on all of
its income and gains.

TAXATION OF DISTRIBUTIONS.
All Fund distributions of net investment income will be taxable as ordinary
income. Distributions by Vista Tax Free Money Market Fund of its tax-exempt
interest income will not be subject to federal income tax. Such distributions
will generally be subject to state and local taxes, but may be exempt if paid
out of interest on municipal obligations of the state or locality in which you
reside. Any distributions of net capital gain which are designated as "capital
gain dividends" will be taxable as long-term capital gain, regardless of how
long you have held your shares. The taxation of your distributions is the same
whether received in cash or in shares through the reinvestment of
distributions.

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

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

OTHER INFORMATION
CONCERNING THE FUNDS
- --------------------
ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of each Fund's
average daily net assets.

SUB-ADMINISTRATOR AND
DISTRIBUTOR
Vista Fund Distributors, Inc. ("VFD") acts as the Funds' sub-administrator and
distributor. VFD is a subsidiary of The BISYS Group, Inc. and is unaffiliated
with Chase. For the sub-administrative services it performs, VFD is entitled to
receive a fee from each Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay
for certain expenses incurred in connection with organizing new series of the
Trust and certain other ongoing expenses of the Trust. VFD is located at One
Chase Manhattan Plaza, Third Floor, New York, New York 10081.

28
<PAGE>

servicing agents may, at their won expense, provide gifts, such as computer
software packages, guides and books related to investment of additional Fund
shares valued up to $250 to their customers that invest in the Vista Funds.

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

CUSTODIAN

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

29
<PAGE>

ORGANIZATION AND DESCRIPTION OF SHARES
Each Fund is a portfolio of Mutual Fund Trust, an open-end management
investment company organized as a Massachusetts business trust in 1994 (the
"Trust"). The Trust has reserved the right to create and issue additional
series and classes. Each share of a series or class represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class participate equally in the
earnings, dividends and assets of the particular series or class. Shares have
no preemptive or conversion rights. Shares when issued are fully paid and
non-assessable, except as set forth below. Shareholders are entitled to one
vote for each whole share held, and each fractional share shall be entitled to
a proportionate fractional vote, except that Trust shares held in the treasury
of the Trust shall not be voted. Shares of each class of a Fund generally vote
together except when required under federal securities laws to vote separately
on matters that only affect a particular class, such as the approval of
distribution plans for a particular class. Fund shares will be maintained in
book entry form, and no certificates representing shares owned will be issued
to shareholders.

Each Fund issues multiple classes of shares. This Prospectus relates only to
Institutional Shares of the Funds. Institutional Shares may be purchased only
by qualified investors. See "How to Buy, Sell and Exchange Shares." The Funds
offer other classes of shares in addition to these classes and may determine
not to offer certain classes of shares. The categories of investors that are
eligible to purchase shares and minimum investment requirements may differ for
each class of a Fund's shares. In addition, other classes of Fund shares may be
subject to differences in sales charge arrangements, ongoing distribution and
service fee levels, and levels of certain other expenses, which will affect the
relative performance of the different classes. Investors may call
1-800-622-4273 to obtain additional information about other classes of shares
of the Funds that are offered. Any person entitled to receive compensation for
selling or servicing shares of a Fund may receive different levels of
compensation with respect to one class of shares over another.

30
<PAGE>

existed and the Trust itself was unable to meet its obligations.

PERFORMANCE INFORMATION
- -----------------------
Each Fund may advertise its annualized "yield" and its "effective yield."
Annualized "yield" is determined by assuming that income generated by an
investment in a Fund over a stated seven-day period (the "yield") will continue
to be generated each week over a 52-week period. It is shown as a percentage of
such investment. "Effective yield" is the annualized "yield" calculated
assuming the reinvestment of the income earned during each week of the 52-week
period. The "effective yield" will be slightly higher than the "yield" due to
the compounding effect of this assumed reinvestment.

Vista Tax Free Money Market Fund may also quote a "tax equivalent yield," the
yield that a taxable money market fund would have to generate in order to
produce an after-tax yield equivalent to the tax free fund's yield. The tax
equivalent yield of the Vista Tax Free Money Market Fund can then be compared
to the yield of a taxable money market fund. Tax equivalent yields can be
quoted on either a "yield" or "effective yield" basis.

<PAGE>

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

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

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

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

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

VINS-1-1297

<PAGE>

[CHASE VISTA LOGO]

PROSPECTUS
VISTA(SM) TAX FREE INCOME FUND
CLASS A

INVESTMENT STRATEGY: INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Fund in its December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call Chase Global Funds Services Company at 1-800-344-3092. The SAI
has been filed with the Securities and Exchange Commission and is incorporated
into this Prospectus by reference.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary .................................................................. 3
The expenses you might pay on your Fund investment, including examples
Financial Highlights ............................................................ 4
How the Fund has performed
Fund Objectives .................................................................. 6
Investment Policies ............................................................... 6
The kinds of securities in which the Fund invests, investment policies and
techniques, and risks
Management ........................................................................ 12
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management, the
Fund's sub-adviser, and the individuals who manage the Fund
About Your Investment ............................................................ 13
Alternative sales arrangements
How to Buy, Sell and Exchange Shares ............................................. 13
How the Fund Values its Shares ................................................... 20
How Distributions Are Made; Tax Information ....................................... 21
How the Fund distributes its earnings, and tax treatment related to those earnings
Other Information Concerning the Fund ............................................. 22
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ......................................................... 26
How performance is determined, stated and/or advertised
</TABLE>

2
<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Fund and is, except as
described below, based on expenses incurred in the most recent fiscal year. The
examples show the cumulative expenses attributable to a hypothetical $1,000
investment over specified periods.

<TABLE>
<CAPTION>
Class A
Shares
--------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) ................................................ 4.50%
Maximum Deferred Sales Charge (as a percentage of the lower of original purchase price
or redemption proceeds) ............................................................ None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver)* .................................... 0.14%#
12b-1 Fee (after estimated waiver)* ** ............................................. 0.00%#
Shareholder Servicing Fee (after estimated waiver)* ................................. 0.11%#
Other Expenses ..................................................................... 0.50%#
--------
Total Fund Operating Expenses (after waiver of fee)* ................................. 0.75%#
========
</TABLE>

Examples

<TABLE>
<CAPTION>
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- -------- -------- --------
<S> <C> <C> <C> <C>
Class A Shares+ ............... $52 $68 $85 $134
</TABLE>

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

3
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Class A Share. This information is supplemented by financial statements and
accompanying notes appearing in the Fund's Annual Report to Shareholders for
the period ended August 31, 1997, which is incorporated by reference into the
SAI. Shareholders may obtain a copy of this annual report by contacting the
Fund or their Shareholder Servicing Agent. The financial statements and notes,
as well as the financial information in the table below, have been audited by
Price Waterhouse LLP, independent accountants, located at 1177 Avenue of the
Americas, New York, New York 10036, whose report is included in the Annual
Report to Shareholders.

VISTA TAX FREE INCOME FUND

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

<TABLE>
<CAPTION>
Class A
---------------------------------------------------------
Year Year Year 11/1/93
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94+
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ......... $ 11.84 $ 11.85 $ 11.70 $ 12.70
---------- -------- ---------- --------
Income from Investment Operations:
Net Investment Income ........................ 0.579 0.580 0.585 0.475
Net Gains or (Losses) in Securities
(both realized and unrealized) ............... 0.484 (0.007) 0.147 (0.847)
---------- -------- ---------- --------
Total from Investment Operations ............... 1.063 0.573 .732 (0.372)
Less Distributions:
Dividends from net investment income ......... 0.583 0.583 0.582 0.475
Distributions from capital gains ............ -- -- -- 0.153
---------- -------- ---------- --------
Total Distributions ........................... 0.883 0.583 0.582 0.628
---------- -------- ---------- --------
Net Asset Value, End of Period ............... $ 12.32 $ 11.84 $ 11.85 $ 11.70
========== ======== ========== ========
Total Return(1) .............................. 9.14% 4.88% 6.53% (2.99%)
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ...... $ 63,729 $70,480 $ 88,783 $98,054
Ratio of Expenses to Average NetAssets ...... 0.90% 0.90% 0.85% 0.58%#
Ratio of Net Investment Income to
Average Net Assets ........................... 4.78% 4.83% 5.07% 4.75%#
Ratio of Expenses without waivers and
assumption of expenses to Average Net
Assets ....................................... 1.29% 1.46% 1.47% 1.29%#
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets ........................... 4.39% 4.27% 4.45% 4.04%#
Portfolio Turnover Rate ........................ 147% 210% 233% 258%
</TABLE>

<TABLE>
<CAPTION>
Class A
----------------------------------------------------
Year Ended
----------------------------------------------------
10/31/93 10/31/92 10/31/91 10/31/90
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ......... $ 11.52 $ 11.12 $ 10.43 $ 10.58
---------- -------- ---------- --------
Income from Investment Operations:
Net Investment Income ........................ 0.662 0.731 0.727 0.723
Net Gains or (Losses) in Securities
(both realized and unrealized) ............... 1.412 0.556 0.693 (0.094)
---------- -------- ---------- --------
Total from Investment Operations ............... 2.074 1.287 1.420 0.629
Less Distributions:
Dividends from net investment income ......... 0.662 0.731 0.726 0.726
Distributions from capital gains ............ 0.237 0.156 -- 0.055
---------- -------- ---------- --------
Total Distributions ........................... 0.899 0.887 0.726 0.781
---------- -------- ---------- --------
Net Asset Value, End of Period ............... $ 12.70 $ 11.52 $ 11.12 $ 10.43
========== ======== ========== ========
Total Return(1) .............................. 18.72% 11.99% 13.98% 6.18%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ...... $ 83,672 $17,548 $ 5,425 $ 3,973
Ratio of Expenses to Average NetAssets ...... 0.23% 0.00% 0.04% 0.12%
Ratio of Net Investment Income to
Average Net Assets ........................... 5.25% 6.26% 6.71% 6.86%
Ratio of Expenses without waivers and
assumption of expenses to Average Net
Assets ....................................... 1.20% 2.34% 4.04% 2.50%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets ........................... 4.28% 3.92% 2.71% 4.48%
Portfolio Turnover Rate ........................ 149% 266% 211% 89%
</TABLE>

Class A
----------------------------------------
Year Ended 9/4/87*
----------------------------- to
10/31/89 10/31/88 10/31/87
---------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ......... $ 10.63 $ 10.08 $ 10.00
---------- -------- ----------
Income from Investment Operations:
Net Investment Income ........................ 0.756 0.738 0.059
Net Gains or (Losses) in Securities
(both realized and unrealized) ............... 0.006 0.603 0.021
---------- -------- ----------
Total from Investment Operations ............... 0.762 1.341 0.080
Less Distributions:
Dividends from net investment income ......... 0.759 0.791 --
Distributions from capital gains ............ 0.053 -- --
---------- -------- ----------
Total Distributions ........................... 0.812 0.791 --
---------- -------- ----------
Net Asset Value, End of Period ............... $ 10.58 $ 10.63 $ 10.08
========== ======== ==========
Total Return(1) .............................. 7.48% 13.83% 5.41%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ...... $ 3,196 $ 1,197 $ 101
Ratio of Expenses to Average NetAssets ...... 0.00% 0.00% 0.00%
Ratio of Net Investment Income to
Average Net Assets ........................... 7.06% 7.50% 7.35%
Ratio of Expenses without waivers and
assumption of expenses to Average Net
Assets ....................................... 2.50% 2.00% 2.00%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets ........................... 4.56% 5.50% 5.35%
Portfolio Turnover Rate ........................ 257% 422% 94%
</TABLE>

---------------
* Commencement of operations.
+ In 1994 the Tax Free Income
Fund changed its fiscal year-end from October 31 to August 31.
(1) Total returns
are calculated before taking into account effect of 4.50% sales charge.
# Short periods less than one year have been annualized.

5
<PAGE>

FUND OBJECTIVES
- ---------------
Vista Tax Free Income Fund seeks to provide monthly dividends which are
excluded from gross income for federal tax purposes, as well as to protect the
value of its shareholders' investment, by investing primarily (i.e., at least
80% of its assets under normal conditions) in Municipal Obligations. The Fund
is not intended to be a complete investment program, and there is no assurance
it will achieve its objective.

INVESTMENT POLICIES
- -------------------
INVESTMENT APPROACH

The Fund invests primarily in Municipal Obligations (as defined under
"Municipal Obligations"). As a fundamental policy, under normal market
conditions, the Fund will have at least 80% of its assets in Municipal
Obligations the interest on which, in the opinion of bond counsel, is excluded
from gross income for federal income tax purposes and does not constitute a
preference item which would be subject to the federal alternative minimum tax
on individuals (these preference items are referred to as "AMT Items"). The
Fund reserves the right under normal market conditions to invest up to 20% of
its total assets in AMT Items or securities the interest on which is subject to
federal income tax. For temporary defensive purposes, the Fund may exceed this
limitation.

The Fund's investments may include, among other instruments, fixed, variable or
floating rate general obligation and revenue bonds, zero coupon securities,
inverse floaters and bonds with interest rate caps. The Fund's Municipal
Obligations will be rated at time of purchase at least in the category Baa,
MIG-3 or VMIG-3 by Moody's Investors Service, Inc. ("Moody's"), or BBB or SP-2
by Standard & Poor's Corporation ("S&P"), or BBB or FIN-3 by Fitch Investors
Service, Inc. ("Fitch") or comparably rated by another national rating
organization, or, if unrated, considered by the Fund's advisers to be of
comparable quality.

There is no restriction on the maturity of the Fund's portfolio or any
individual portfolio security. The Fund's advisers may adjust the average
maturity of the Fund's portfolio based upon their assessment of the relative
yields available on securities of different maturities and their expectations
of future changes in interest rates.

For temporary defensive purposes, the Fund may invest without limitation in
high quality money market instruments and repurchase agreements, the interest
income from which may be taxable to shareholders as ordinary income for federal
income tax purposes.

6
<PAGE>

WHO MAY WANT TO INVEST
The Fund may be most appropriate for investors who . . .
[bullet] Are seeking monthly tax-free income exempt from federal income tax
[bullet] Are investing for mid- to long-term investment goals
[bullet] Own or plan to own other types of investments for diversification
purposes
[bullet] Can assume bond market (i.e., interest rate) risk

The Fund may NOT be appropriate for investors who are unable to tolerate any up
and down price changes, are investing for shorter-term goals or who are in need
of higher growth potential.

MUNICIPAL OBLIGATIONS
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, and their authorities,
agencies, instrumentalities and political subdivisions, the interest on which,
in the opinion of bond counsel, is excluded from gross income for federal
income tax purposes (without regard to whether the interest thereon is also
exempt from the personal income taxes of any state or whether the interest
thereon constitutes a preference item for purposes of the federal alternative
minimum tax). These securities are issued to obtain funds for various public
purposes, such as the construction of public facilities, the payment of general
operating expenses or the refunding of outstanding debts. They may also be
issued to finance various private activities, including the lending of funds to
public or private institutions for the construction of housing, educational or
medical facilities, and may include certain types of industrial development
bonds, private activity bonds or notes issued by public authorities to finance
privately owned or operated facilities, or to fund short-term cash
requirements. Short-term Municipal Obligations may be issued as interim
financing in anticipation of tax collections, revenue receipts or bond sales to
finance various public purposes.

From time to time, the Fund may invest more than 25% of the value of its total
assets in industrial development bonds which, although issued by industrial
development

7
<PAGE>

authorities, may be backed only by the assets and revenues of the non-
governmental issuers such as hospitals or airports, provided, however, that the
Fund may not invest more than 25% of the value of its total assets in such
bonds if the issuers are in the same industry.
MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. Certain investments in
municipal lease obligations may be illiquid.

OTHER INVESTMENT PRACTICES

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

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

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

The Fund may borrow money from banks for temporary or short-term purposes, but
will not borrow to buy additional securities, known as

8
<PAGE>

"leveraging". The Fund may also sell and simultaneously commit to repurchase a
portfolio security at an agreed-upon price and time. The Fund may use this
practice to generate cash for shareholder redemptions without selling
securities during unfavorable market conditions. Whenever the Fund enters into
a reverse repurchase agreement, it will establish a segregated account in which
it will maintain liquid assets on a daily basis in an amount at least equal to
the repurchase price (including accrued interest). The Fund would be required
to pay interest on amounts obtained through reverse repurchase agreements,
which are considered borrowings under federal securities laws.

9
<PAGE>

OTHER INVESTMENT COMPANIES. The Fund may invest up to 10% of its total assets
in shares of other investment companies when consistent with its investment
objective and policies, subject to applicable regulatory limitations.
Additional fees may be charged by other investment companies.

10
<PAGE>

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

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

Because the Fund will invest primarily in obligations issued by states, cities,
public authorities and other municipal issuers, the Fund is susceptible to
factors affecting such states and their municipal issuers. A number of
municipal issuers have a recent history of significant financial and fiscal
difficulties. If an issuer in which the Fund invests is unable to meet its
financial obligations, the income derived by the Fund and the Fund's ability to
preserve capital and liquidity could be adversely affected. See the SAI for
further information.

Interest on certain Municipal Obligations (including certain industrial
development bonds), while exempt from federal income tax, is a preference item
for the

11
<PAGE>

purpose of the alternative minimum tax. Where a mutual fund receives such
interest, a proportionate share of any exempt-interest dividend paid by the
mutual fund may be treated as such a preference item to shareholders. Federal
tax legislation enacted over the past few years has limited the types and
volume of bonds which are not AMT Items and the interest on which is not
subject to federal income tax. This legislation may affect the availability of
Municipal Obligations for investment by the Fund.

Because the Fund is "non-diversified," the value of its shares is more
susceptible to developments affecting issuers in which the Fund invests. In
addition, more than 25% of the Fund's assets may be invested in securities to
be paid from revenue of similar projects, which may cause the Fund to be more
susceptible to similar economic, political, or regulatory developments.

MANAGEMENT
- ----------
THE FUND'S ADVISERS

The Chase Manhattan Bank ("Chase") acts as the Fund's investment adviser under
an Investment Advisory Agreement and has overall responsibility for investment
decisions of the Fund,

12
<PAGE>

subject to the oversight of the Board of Trustees. Chase is a wholly-owned
subsidiary of The Chase Manhattan Corporation, a bank holding company. Chase
and its predecessors have over 100 years of money management experience.

Pamela Hunter, Vice President of Chase, has been responsible for the day-to-day
management of the Fund since its inception in 1987. Ms. Hunter is part of a
team providing fixed income strategy and product development. Ms. Hunter has
been employed at Chase (including its predecessors) since 1980.

ABOUT YOUR INVESTMENT
- ---------------------
CLASS A SHARES. An investor who purchases Class A shares pays a sales charge at
the time of purchase. As a result, Class A shares are not subject to any sales
charges when they are redeemed. Certain purchases of Class A shares qualify for
reduced sales charges. See "How to Buy, Sell and Exchange Shares" and "Other
Information Concerning the Fund."

HOW TO BUY, SELL
AND EXCHANGE SHARES
- -------------------
PURCHASE OF SHARES
The minimum initial investment by a shareholder is $2,500, including IRAs and
Keoghs. There is no minimum for additional investments. The Fund reserves the
right, in its sole discretion, to reject any purchase order or cease offering
shares for purchase at any time. No share certificates will be issued unless
requested in writing. Subscriptions for shares are subject to acceptance by the
Fund and are not binding until accepted.

Purchase by Mail: Shares of the Fund may be purchased by sending a completed
Application (included with this Prospectus or obtainable from the Fund) to
Gintel Group, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston,
MA 02208-2798, accompanied by a check payable to "Gintel Group" in payment for
the shares. Applications sent to the Fund will be forwarded to Chase Global
Funds Services Company and will

13
<PAGE>

not be effective until received by Chase Global Funds Services Company. Special
forms are required for IRA and Keogh subscriptions and may be obtained by
contacting the Fund. When purchases are made by check, redemptions will not be
allowed until of the purchase check clears, which may take 15 calendar days or
longer. In addition, the redemption or shares purchased through Automated
Clearing House (ACH) will not be allowed until the payment clears, which may
take 7 business days or longer. In the event a check used to pay for shares is
not honored by a bank, the purchase order will be cancelled and the shareholder
will be liable for any losses or expenses incurred by the Fund.

Purchase by Exchange: Shares of the Fund may be exchanged for shares of any
other fund within the Gintel Group, to the extent such shares are offered for
sale in the investor's state of residence. Before any exchange, an investor
must obtain and should carefully review a copy of the current prospectus of the
fund into which he or she wishes to exchange and should retain such copy for
future reference. When opening an account by exchange, the new account must be
established with the same name(s), address, and tax identification number as
the other account and must meet that fund's minimum initial investment and
other eligibility requirements. For federal income tax purposes, an exchange is
treated as a sale of shares and generally results in a capital gain or loss. If
an investor wishes to use the exchange feature, he or she should consult his or
her investment representative or Chase Global Funds Services Company to
determine if the feature is available and whether any other conditions are
imposed on its use. The discussion of the exchange feature in this Prospectus
supersedes the discussion of the exchange privileges in the SAI for investors
purchasing shares through the Gintel Group. Purchase by exchange may be
executed by either mail or telephone but in every instance must comply with the
purchase and redemption procedures set forth in the Prospectus. Neither Chase
Global Funds Services Company nor the Fund will be liable for acting upon such
instructions, regardless of the authority or absence thereof of the person
giving the instructions, or for any loss, expense, or cost arising out of any
exchange by telephone, whether or not properly authorized and directed. An
investor will bear the risk of loss. The staff of the Securities and Exchange
Commission is currently examining whether such responsibilities may be
disclaimed. The accuracy of telephone transactions should be verified
immediately upon the receipt of confirmation statement.

Purchase by Wire: Investors may purchase shares by wire by first telephoning
Chase Global Funds Services Company at 1-800-344-3092 for instructions and wire
control number and subsequently wiring Federal funds and registration
instructions to:

The Chase Manhattan Bank

New York, NY 10003

ABA# 0210-0002-1

F/B/O The Gintel Group

Acct. # 910-2-732980

Ref: Tax Free Income Fund

14
<PAGE>

Account Number

------------------------
Account Name:

--------------------------
Purchase by Automatic Investment: Investors may purchase shares on a regular
basis, (the first, the fifteenth, or the first and fifteenth of each month), by
automatically transferring a specified dollar amount ($100 minimum) from their
regular checking or NOW account to their specified Gintel Group Account.
Special forms are required for this automatic investment plan and may be
obtained by contacting the Fund. Existing shareholders may begin the plan at
any time by sending a signed letter with signature guarantee and a deposit slip
or voided check.

ADDITIONAL INVESTMENTS
An investor may add to his or her account by purchasing additional shares of
the same class of the Fund's shares by mailing a check to the Gintel Group
(payable to "Gintel Group") at its address set forth above under "Purchases by
Mail" or by wiring funds to the Fund's custodian using the procedures set forth
above under "Purchases by Wire." It is important that the account number,
account name and the Fund and class of shares to be purchased are specified on
the check or wire to ensure proper crediting to the investor's account.

PROCESSING OF PURCHASE ORDERS

Shares are purchased at the public offering price, which is based on the net
asset value next determined after the Fund's distributor receives an order in
proper form. In most cases, in order for an investor to receive that day's
public offering price, Chase Global Funds Services Company must generally
receive the purchase order in proper form prior to the close of regular trading
on the New York Stock Exchange. If an investor buys shares through his or her
investment representative, the representative must have received the order
before the close of regular trading on the New York Stock Exchange in order to
receive that day's public offering price. Orders are in proper form only after
funds are converted to Federal Funds. Orders paid by check and received before
2:00 p.m. will generally be available for the purchase of shares the following
Fund Business Day.

Confirmed purchases will be done only at the discretion of the Investment
Advisor.

Purchase of shares of the Fund may also be made through registered securities
dealers who have entered into selected dealer agreements with the Distributor.
A dealer who agrees to process an order on behalf of an investor may charge the
investor a fee for this service.

The offering price of each Fund share is the net asset value per share next
computed after the subscriber's application is received by Chase Global Funds
Services Company. The net asset value per share is determined by dividing the
market value of the Fund's securities as of the close of trading plus any cash
or other assets (including dividends and accrued interest) less all liabilities
(including accrued expenses) by the number of the Fund's shares outstanding.
The Fund will determine net asset value of its shares on each "Fund Business
Day", which is any day the New

15
<PAGE>

York Stock Exchange is open for business exclusive of national holidays.

All ordinary income dividends and capital gains distributions are automatically
reinvested at net asset value unless the Chase Global Funds Services Company
receives written notice from a shareholder at least 30 days prior to the record
date requesting that the distributions and dividends be distributed to the
investor in cash.

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

<TABLE>
<CAPTION>
Sales charge as a
percentage of:
--------------------- Amount of sales charge
Amount of transaction at Offering Net amount reallowed to dealers as a
offering price($) Price price percentage of offering price
- ----------------------------------- -------- ---------- ----------------------------
<S> <C> <C> <C>
Under 100,000 ..................... 4.50 4.71 4.00
100,000 but under 250,000 ......... 3.75 3.90 3.25
250,000 but under 500,000 ......... 2.50 2.56 2.25
500,000 but under 1,000,000 ...... 2.00 2.04 1.75
</TABLE>

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

The Fund's distributor pays broker-dealers commissions on net sales of Class A
shares of $1 million or more based on an investor's cumulative purchases. Such
commissions are paid at the rate of 0.75% of the amount under $2.5 million,
0.50% of the next $7.5 million, 0.25% of the next $40 million and 0.15%
thereafter. The Fund's distributor may withhold such payments with respect to
short-term investments.

GENERAL

You may be eligible to buy Class A shares at reduced sales charges. Consult
your investment representative or Chase Global Funds Services Company for
details about Vista's combined purchase privilege, cumulative quantity
discount, statement of intention, group sales plan, employee benefit plans, and
other plans. Descriptions are also included in the enclosed application and in
the SAI. For purchases of the Fund's Class A shares made from January 1, 1998
through December 31, 1998, no initial sales charge will be assessed if you are
using redemption proceeds received within the prior ninety days from non-Vista
mutual funds to buy your shares and are opening or adding to a Vista prototype
IRA with a transfer of assets or rollover from a qualified plan. If you use
such redemption proceeds to open or add to a Vista prototype IRA, the Fund's
distributor will pay broker-dealers commissions on the net sales of Class A
shares at the rate of 1%. In addition, sales charges are waived if you are
using redemption proceeds received within the prior

16
<PAGE>

ninety days from non-Vista mutual funds to buy your shares, and on which you
paid a front-end or contingent deferred sales charge.

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

For purchases of the Fund's Class A shares made from January 1, 1998 through
December 31, 1998, no initial sales charge will be assessed if you are
investing the proceeds of an IRA for which the Chase Manhattan Bank or its
designee serves as trustee or custodian. No initial sales charge will apply to
the purchase of the Fund's Class A shares if you are investing the proceeds of
a qualified retirement plan where a portion of the plan was invested in the
Vista Family of Funds, any qualified retirement plan with 50 or more
participants, or an individual participant in a tax-qualified plan making a
tax-free rollover or transfer of assets from the plan in which Chase or an
affiliate serves as trustee or custodian of the plan or manages some portion of
the plan's assets.

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

17
<PAGE>

deferred compensation plans and trusts used to fund those plans.

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

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

The Fund may sell Class A shares at net asset value without an initial sales
charge in connection with the acquisition by the Fund of assets of an
investment company or personal holding company.

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

REDEMPTION OF SHARES
Upon receipt by Chase Global Funds Services Company of a request in proper
form, the Fund will redeem shares at its next determined net asset value. There
is no assurance that the net asset value received upon redemption will be
greater than that paid by a shareholder upon purchase. The Fund will forward
redemption payments only on shares for which it has collected payment.

Redemption by Mail: Shares may be redeemed by sending a written redemption
request to Gintel Group, c/o Chase Global Funds Services Company, P.O. Box
2798, Boston, MA 02208-2798. Any written request sent to the Fund will be
forwarded to Chase Global Funds Services Company and the effective date of the
redemption request will be when the request is received in proper form by Chase
Global Funds Services Company. The redemption value of each Fund share is the
net asset value per share next computed after the redemption request is
received in proper form. In order to receive that day's net asset value, Chase
Global Funds Services Company must receive an investor's request before the
close of regular trading on the New York Stock Exchange. Where share
certificates have been issued, a shareholder must endorse the certificates and
include them in the redemption request. "Proper form" means that the request
for redemption must include the following:

1. A letter of instruction specifying the Fund name, the account number, and
the number of shares or the dollar amount to be redeemed and signed by all
registered owners exactly as their names appear on the account.

18
<PAGE>

eligible guarantor institutions previously approved by Chase Global Funds
Services Company (commercial banks and members of domestic stock exchanges)
will continue to be approved. Eligible guarantor institutions not previously
approved by Chase Global Funds Services Company and not yet members of a
recognized signature guarantee program, must make application to that company.
For complete information or a copy of Chase Global Funds Services Company's
signature guarantee Standards, Procedures and Guidelines, please contact the
Transfer Agent at (800) 344-3092. A notary public is not an acceptable
guarantor.

3. Other supporting legal documents, if required, in the case of estates,
trusts, guardianships, corporations, pension and profit sharing plans and other
organizations. Shareholders should contact Chase Global Funds Services Company,
(800) 344-3092, to obtain further information on the specific documentation
required.

Payment will be made for redeemed shares as soon as practicable, but generally
no later than five business days after proper receipt of redemption
notification. Payment will be made by check, unless a shareholder arranges for
the proceeds of redemption requests to be sent by Federal fund wire to a
designated bank account, in which case a wire charge (currently $8.00 per wire)
will be deducted from the account. Shareholders should contact Chase Global
Funds Services Company, (800) 344-3092, to obtain further information on this
service and the related charges.

Redemption by Telephone: Shareholders who authorize telephone redemptions in
the Application may redeem shares by telephone instructions to Chase Global
Funds Services Company which will wire or mail the proceeds of redemptions to
the bank and bank account number specified in the Application or mail the
proceeds to the address of record, except that telephone redemptions of less
than $1000 will be mailed. Redemptions of $1000 or more will be charged a wire
fee (currently $8.00 per wire) which will be deducted from the account. Any
change in the bank account specified in the Application must be made in writing
with a signature guarantee as described above for redemptions by mail. If an
investor selects a telephone redemption privilege, the investor authorizes
Chase Global Funds Services Company to act on telephone instructions from any
person representing himself or herself to be the investor or the investor's
investment representative and reasonably believed by Chase Global Funds
Services Company to be genuine. The Fund will require Chase Global Funds
Services Company to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that the instructions are genuine and, if
it does not follow such procedures, the Fund may be liable for losses due to
unauthorized or fraudulent requests. An investor agrees, however, that to the
extent permitted by applicable law, neither the Fund nor its agents nor Chase

19
<PAGE>

Global Funds Services Company will be liable for any loss, liability, cost or
expense arising out of any redemption request, including any fraudulent or
unauthorized request. For information, consult Chase Global Funds Services
Center at (800)-344-3092. The telephone redemption privilege may be modified or
terminated without notice.

Automatic Redemptions: A shareholder who owns shares of the Fund with a value
of $10,000 or more may establish a Systematic Withdrawal Plan. The Shareholder
may request a declining balance withdrawal, a fixed dollar withdrawal, a fixed
share withdrawal, or a fixed percentage withdrawal (based on the current value
of the account) on a monthly, quarterly, semiannual or annual basis. When a
shareholder reaches age 591/2 and begins to receive distributions from an IRA
or other retirement plan invested in the Fund, the shareholder can arrange to
have a regular monthly or quarterly redemptions made under Systematic
Withdrawal Plan. In this case it is not necessary for the account value to be
$10,000 or more. Further Information on establishing a Systematic Withdrawal
Plan may be obtained by calling the Fund.

PROCESSING OF REDEMPTION ORDERS
The Fund generally sends payment for an investor's shares on the business day
after the investor's request is received in proper form, assuming that the Fund
has collected payment of the purchase price of such investor's shares. Under
unusual circumstances, the Fund may suspend redemptions, or postpone payment
for more than seven business days, as permitted by federal securities laws.

Sales of shares of the Fund may also be made through registered securities
dealers who have entered into selected dealer agreements with the Distributor.
A dealer who agrees to process an order on behalf of an investor may charge the
investor a fee for this service.

With the exception of IRA or Keogh accounts, the Fund reserves the right to
close an investor's account if the account has dropped below $500 in value for
a period of three months or longer other than as a result of a decline in the
net asset value per share or if an investor purchases through an automatic
investment plan and fails to meet the Fund's investment minimum within a
twelve-month period. Shareholders are notified at least 60 days prior to any
proposed redemption and invited to add to their account if they wish to
continue as a shareholder of the Fund; however the Fund does not presently
contemplate making such redemptions.

Confirmed redemptions will be done only at the discretion of the Investment
Advisor.

20
<PAGE>

priced at 4:15 p.m., Eastern time), on each business day of the Fund, by
dividing the net assets of the Fund attributable to that class by the total
number of outstanding shares of that class. Values of assets held by the Fund
are determined on the basis of their market or other fair value, as described
in the SAI.

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

If a check representing a Fund distribution is not cashed within a specified
period, Chase Global Funds Services Company will notify you that you have the
option of requesting another check or reinvesting the distribution in the Fund.
If Chase Global Funds Services Company does not receive your election, the
distribution will be reinvested in the Fund. Similarly, if the Fund or Chase
Global Funds Services Company sends you correspondence returned as
"undeliverable," distributions will automatically be reinvested in the Fund.

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

TAXATION OF DISTRIBUTIONS.

Distributions by the Fund of its tax-exempt interest income will not be subject
to federal income tax. Such distributions will generally be subject to state
and local taxes, but may be exempt if paid out of interest on municipal
obligations of the state or locality in which the shareholder resides.

All other Fund distributions of net investment income will be taxable as

21
<PAGE>

ordinary income. Any distributions of net capital gain which are designated as
"capital gain dividends" will be taxable as long-term capital gain, regardless
of how long you have held the shares. The taxation of your distributions will
be the same whether received in cash or in shares through the reinvestment of
distributions.

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

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

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLAN

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

22
<PAGE>

educational meetings within and outside the U.S.

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

SHAREHOLDER SERVICING AGENTS

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

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

23
<PAGE>

additional Fund shares valued up to $250 to their customers that invest in the
Vista Funds.

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

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

TRANSFER AGENT AND DIVIDEND PAYING AGENT
DST Systems, Inc. located at 210 W. 10th Street, Kansas City, MO 64105 serves
as the Fund's transfer agent and dividend paying agent.

24
<PAGE>

to government offices and commissions; expenses of meetings of investors; fees
and expenses of independent accountants, of legal counsel and of any transfer
agent, registrar or dividend disbursing agent of the Trust; insurance premiums;
and expenses of calculating the net asset value of, and the net income on,
shares of the Fund. Shareholder servicing and distribution fees are allocated
to specific classes of the Fund. In addition, the Fund may allocate transfer
agency and certain other expenses by class. Service providers to the Fund may,
from time to time, voluntarily waive all or a portion of any fees to which they
are entitled.

ORGANIZATION AND
DESCRIPTION OF SHARES

The Fund is a portfolio of Mutual Fund Trust, an open-end management investment
company organized as a Massachusetts business trust in 1994 (the "Trust"). The
Trust has reserved the right to create and issue additional series and classes.
Each share of a series or class represents an equal proportionate interest in
that series or class with each other share of that series or class. The shares
of each series or class participate equally in the earnings, dividends and
assets of the particular series or class. Shares have no preemptive or
conversion rights. Shares when issued are fully paid and non-assessable, except
as set forth below. Shareholders are entitled to one vote for each whole share
held, and each fractional share shall be entitled to a proportionate fractional
vote, except that Trust shares held in the treasury of the Trust shall not be
voted. Shares of each class of the Fund generally vote together except when
required under federal securities laws to vote separately on matters that only
affect a particular class, such as the approval of distribution plans for a
particular class.

The Fund issues multiple classes of shares. This Prospectus relates to Class A
shares of the Fund. The Fund may offer other classes of shares in addition to
these classes and may determine not to offer certain classes of shares. The
categories of investors that are eligible to purchase shares and minimum
investment requirements may differ for each class of the Fund's shares. In
addition, other classes of Fund shares may be subject to differences in sales
charge arrangements, ongoing distribution and service fee levels, and levels of
certain other expenses, which would affect the relative performance of the
different classes. Investors may call 1-800-344-3092 to obtain additional
information about other classes of shares of the Fund that are offered. Any
person entitled to receive compensation for selling or servicing shares of the
Fund may receive different levels of compensation with respect to one class of
shares over another.

25
<PAGE>

a meeting of shareholders to remove a trustee(s) when requested to do so in
writing by record holders of not less than 10% of all outstanding shares of the
Trust.

UNIQUE CHARACTERISTICS OF MASTER/FEEDER
- ---------------------------------------
FUND STRUCTURE
- --------------
Unlike other mutual funds which directly acquire and manage their own portfolio
securities, the Fund is permitted to invest all of its investable assets in a
separate registered investment company (a "Portfolio"). In that event, a
shareholder's interest in the Fund's underlying investment securities would be
indirect. In addition to selling a beneficial interest to the Fund, a Portfolio
could also sell beneficial interests to other mutual funds or institutional
investors. Such investors would invest in such Portfolio on the same terms and
conditions and would pay a proportionate share of such Portfolio's expenses.
However, other investors in a Portfolio would not be required to sell their
shares at the same public offering price as the Fund, and might bear different
levels of ongoing expenses than the Fund. Shareholders of the Fund should be
aware that these differences may result in differences in returns experienced
in the different funds that invest in a Portfolio. Such differences in return
are also present in other mutual fund structures.

Smaller funds investing in a Portfolio could be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large
fund were to withdraw from a Portfolio, the remaining funds might experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio could become less diverse, resulting in increased
portfolio risk. However, this possibility also exists for traditionally
structured funds which have large or institutional investors. Funds with a
greater pro rata ownership in a Portfolio could have effective voting control
of such Portfolio. Under this master/feeder investment approach, whenever the
Trust was requested to vote on matters pertaining to a Portfolio, the Trust
would hold a meeting of shareholders of the Fund and would cast all of its
votes in the same proportion as did the Fund's shareholders. Shares of the Fund
for which no voting instructions had been received would be voted in the same
proportion as those shares for which voting instructions had been received.
Certain changes in a Portfolio's objective, policies or restrictions might
require the Trust to withdraw the Fund's interest in such Portfolio. Any such
withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution from such Portfolio). The Fund could incur
brokerage fees or other transaction costs in converting such securities to
cash. In addition, a distribution in

26
<PAGE>

kind could result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund.

State securities regulations generally would not permit the same individuals
who are disinterested Trustees of the Trust to be Trustees of a Portfolio
absent the adoption of procedures by a majority of the disinterested Trustees
of the Trust reasonably appropriate to deal with potential conflicts of
interest up to and including creating a separate Board of Trustees. The Fund
will not adopt a master/feeder structure under which the disinterested Trustees
of the Trust are Trustees of the Portfolio unless the Trustees of the Trust,
including a majority of the disinterested Trustees, adopt procedures they
believe to be reasonably appropriate to deal with any conflict of interest up
to and including creating a separate Board of Trustees.

If the Fund invests all of its investable assets in a Portfolio, investors in
the Fund will be able to obtain information about whether investment in the
Portfolio might be available through other funds by contacting the Fund at
1-800-622-4273. In the event the Fund adopts a master/feeder structure and
invests all of its investable assets in a Portfolio, shareholders of the Fund
will be given at least 30 days' prior written notice.

PERFORMANCE INFORMATION
- -----------------------
The Fund's investment performance may from time to time be included in
advertisements about the Fund. Performance is calculated separately for each
class of shares, as described in the SAI. "Yield" for each class of shares is
calculated by dividing the annualized net investment income calculated pursuant
to federal rules per share during a recent 30-day period by the maximum public
offering price per share of such class on the last day of that period.
"Effective yield" is the "yield" calculated assuming the reinvestment of income
earned, and will be slightly higher than the "yield" due to the compounding
effect of this assumed reinvestment. "Tax equivalent yield" is the yield that a
taxable fund would have to generate in order to produce an after-tax yield
equivalent to the Fund's yield. The tax equivalent yield of the Fund can then
be compared to the yield of a taxable fund. Tax equivalent yields can be quoted
on either a "yield" or "effective yield" basis.

27
<PAGE>

performance also often reflects the risks associated with the Fund's investment
objectives and policies. These factors should be considered when comparing the
Fund's investment results to those of other mutual funds and other investment
vehicles. Quotation of investment performance for any period when a fee waiver
or expense limitation was in effect will be greater than if the waiver or
limitation had not been in effect. The Fund's performance may be compared to
other mutual funds, relevant indices and rankings prepared by independent
services. See the SAI.

28
<PAGE>

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<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

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

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

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

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

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

<PAGE>

[CHASE VISTA LOGO]

VISTA(SM) SHARES

PROSPECTUS
VISTA(SM) 100% U.S. TREASURY SECURITIES
MONEY MARKET FUND
VISTA(SM) TREASURY PLUS MONEY MARKET FUND
VISTA(SM) FEDERAL MONEY MARKET FUND
VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
VISTA(SM) CASH MANAGEMENT FUND
VISTA(SM) TAX FREE MONEY MARKET FUND
VISTA(SM) NEW YORK TAX FREE MONEY MARKET FUND
VISTA(SM) CALIFORNIA TAX FREE MONEY MARKET FUND

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Funds in their December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call the Vista Service Center at 1-800-34-VISTA. The SAI has been
filed with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference.

INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

THE VISTA TAX FREE, NEW YORK TAX FREE AND CALIFORNIA TAX FREE MONEY MARKET
FUNDS MAY EACH INVEST A SIGNIFICANT PERCENTAGE OF ITS ASSETS IN THE SECURITIES
OF A SINGLE ISSUER; ACCORDINGLY, AN INVESTMENT IN THESE FUNDS MAY BE RISKIER
THAN INVESTMENTS IN OTHER TYPES OF MONEY MARKET FUNDS.
<PAGE>

2
<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you pay on your Fund investment, including examples
Financial Highlights ...................................................... 6
The Funds' financial history
Fund Objectives and Investment Approach
Vista 100% U.S. Treasury Securities Money Market Fund ..................... 20
Vista Treasury Plus Money Market Fund .................................... 20
Vista Federal Money Market Fund .......................................... 20
Vista U.S. Government Money Market Fund .................................... 21
Vista Cash Management Fund ................................................ 21
Vista Tax Free Money Market Fund .......................................... 21
Vista New York Tax Free Money Market Fund ................................. 22
Vista California Tax Free Money Market Fund .............................. 22
Common Investment Policies ................................................ 23
Management ............................................................... 30
Chase Manhattan Bank, the Funds' adviser; Chase Asset Management and Texas
Commerce Bank, the Funds' sub-advisers
How to Buy, Sell and Exchange Shares ....................................... 31
How the Funds Value Their Shares .......................................... 35
How Dividends and Distributions Are Made; Tax Information .................. 36
How the Funds distribute their earnings, and tax treatment related
to those earnings
Other Information Concerning the Funds .................................... 37
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 40
How performance is determined, stated and/or advertised

3
<PAGE>

EXPENSE SUMMARY

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

<TABLE>
<CAPTION>
Vista
100% U.S. Vista
Treasury Treasury
Securities Plus Money
Money Market
Market Fund Fund
------------- -----------
Vista Vista
Shares Shares
------------- -----------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.10% 0.10%
12b-1 Fee ** (after estimated waiver of fee, where indicated) ............ 0.08%*# 0.10%
Shareholder Servicing Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.30%*# 0.28%*#
Other Expenses (after estimated waiver of fee, where indicated) ......... 0.11%*# 0.11%*#
Total Fund Operating Expenses (after waivers of fees, where indicated) .. 0.59%* 0.59%*
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 year .................................................................. $ 6 $ 6
3 years .................................................................. 19 19
5 years .................................................................. 33 33
10 years .................................................................. 74 74

<CAPTION>
Vista Vista U.S.
Federal Government Vista
Money Money Cash
Market Market Management
Fund Fund Fund
-------- ------------ -----------
Vista Vista Vista
Shares Shares Shares
-------- ------------ -----------
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.10% 0.10% 0.10%
12b-1 Fee ** (after estimated waiver of fee, where indicated) ............ 0.10% 0.10% n/a
Shareholder Servicing Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.20%* 0.23%* 0.33%*
Other Expenses (after estimated waiver of fee, where indicated) ......... 0.30% 0.16% 0.16%
Total Fund Operating Expenses (after waivers of fees, where indicated) . 0.70%* 0.59%* 0.59%*
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 year .................................................................. $ 7 $ 6 $ 6
3 years .................................................................. 22 19 19
5 years .................................................................. 39 33 33
10 years .................................................................. 87 74 74

<CAPTION>
Vista Vista
Vista New York California
Tax Free Tax Free Tax Free
Money Money Money
Market Market Market
Fund Fund Fund
-------- ------------ -----------
Vista Vista Vista
Shares Shares Shares
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.10% 0.10% 0.00%*#
12b-1 Fee ** (after estimated waiver of fee, where indicated) ............ 0.10% 0.10% 0.05%*#
Shareholder Servicing Fee (after estimated waiver of fee, where
indicated) ............................................................... 0.22%* 0.26%* 0.10%*
Other Expenses (after estimated waiver of fee, where indicated) ......... 0.17% 0.13%*# 0.40%#
Total Fund Operating Expenses (after waivers of fees, where indicated) .. 0.59%* 0.59%* 0.55%*
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 year .................................................................. $ 6 $ 6 $ 6
3 years .................................................................. 19 19 18
5 years .................................................................. 33 33 31
10 years .................................................................. 74 74 69
</TABLE>

* Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Investment Advisory Fee, 12b-1 Fee and Shareholder
Servicing Fee would be 0.10%, 0.10% and 0.35%, respectively, for each
such Fund. Other Expenses would be 0.16%, 0.16% and 0.18% for Vista
100% U.S. Treasury Securities Money Market Fund, Vista Treasury Plus
Money Market Fund and Vista New York Tax Free Money Market Fund,
respectively, and Total Fund Operating Expenses for Vista 100% U.S.
Treasury Securities Money Market Fund, Vista Treasury Plus Money Market
Fund, Vista Federal Money Market Fund, Vista U.S. Government Money
Market Fund, Vista Cash Management Fund, Vista Tax Free Money Market
Fund, Vista New York Tax Free Money Market Fund and Vista California
Tax Free Money Market Fund would be 0.71%, 0.71%, 0.85%, 0.71%, 0.61%,
0.72%, 0.73 and 0.95%, respectively. Chase has agreed to waive fees
payable to it and/or reimburse expenses for a two year period
commencing on May 6, 1996 to the extent necessary to prevent Total Fund
Operating Expenses for Vista Shares of the Vista Treasury Plus Money
Market Fund, Vista U.S. Government Money Market Fund, Vista Cash
Management Fund, Vista Tax Free Money Market Fund and Vista New York
Tax Free Money Market Fund from exceeding 0.73%, 0.76%, 0.72%, 0.74%
and 0.71%, respectively, of average net assets during such period.

** Long-term shareholders in mutual funds with 12b-1 fees, such as holders
of Vista Shares of all Funds except Vista Cash Management Fund, may pay
more than the economic equivalent of the maximum front-end sales charge
permitted by rules of the National Association of Securities Dealers,
Inc.
# Restated from most recent fiscal year to reflect current waiver
arrangements.

5
<PAGE>

FINANCIAL HIGHLIGHTS

On May 3, 1996, the Hanover 100% U.S Treasury Securities Money Market Fund
("Hanover 100% Treasury Fund") merged into Vista 100% U.S. Treasury Securities
Money Market Fund, which was created to be the successor to the Hanover 100%
Treasury Fund. The table set forth below provides selected per share data and
ratios for one Hanover 100% Treasury Fund share outstanding through May 3, 1996
and one Vista Share of the Vista 100% U.S. Treasury Securities Money Market
Fund outstanding for periods thereafter. This information is supplemented by
financial statements and accompanying notes appearing in the Hanover 100%
Treasury Fund's Annual Report to Shareholders

for the fiscal year ended November 30, 1995 and the Fund's Annual Report to
Shareholders for the period ended August 31, 1997, which both are incorporated
by reference into the SAI. Shareholders may obtain a copy of these annual
reports by contacting the Fund or their Shareholder Servicing Agent. The
financial statements and notes, as well as the financial information set forth
in the table below, for the year ended August 31, 1997 and the period ended
August 31, 1996 have been audited by Price Waterhouse LLP, independent
accountants, whose report thereon is included in the Fund's Annual Report to
Shareholders. Periods ended prior to December 1, 1995 were audited by other
independent accountants.

VISTA 100% U.S. TREASURY SECURITIES
MONEY MARKET FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Year 12/01/95 Year Ended
Ended through -----------
8/31/97 8/31/96** 11/30/95
----------- ----------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ...... $ 1.00 $ 1.00 $ 1.000
----------- ----------- -----------
Income from Investment Operations:
Net Investment Income .................. 0.048 0.035 0.050
----------- ----------- -----------
Less Distributions:
Dividends from Net Investment
Income .................................... 0.048 0.035 0.050
----------- ----------- -----------
Net Asset Value, End of Period ............ $ 1.00 $ 1.00 $ 1.000
=========== =========== ===========
TOTAL RETURN 4.87% 3.50% 5.15%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) $2,376,214 $1,671,603 $1,337,549
Ratio of Expenses to Average Net
Assets# ................................. 0.59% 0.60% 0.58%
Ratio of Net Investment Income to
Average Net Assets# ..................... 4.74% 4.58% 4.99%
Ratio of Expenses without waivers and
assumption of expenses to
Average Net Assets# ..................... 0.71% 0.68% 0.61%
Ratio of Net Investment Income
without waivers and assumption of
expenses to Average Net Assets # ......... 4.62% 4.50% 4.96%

<CAPTION>
Year Ended 7/1/91*
------------------------------------- through
11/30/94 11/30/93 11/30/92 11/30/91
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ...... $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
Income from Investment Operations:
Net Investment Income .................. 0.033 0.026 0.033 0.021
----------- ---------- ---------- ----------
Less Distributions:
Dividends from Net Investment
Income .................................... 0.033 0.026 0.033 0.021
----------- ---------- ---------- ----------
Net Asset Value, End of Period ............ $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== ========== ========== ==========
TOTAL RETURN 3.32 % 2.62 % 3.33 % 2.58%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) $1,024,125 $ 873,631 $ 383,688 $ 141,875
Ratio of Expenses to Average Net
Assets# ................................. 0.59 % 0.58 % 0.55 % 0.45%
Ratio of Net Investment Income to
Average Net Assets# ..................... 3.26 % 2.58 % 3.28 % 5.02%
Ratio of Expenses without waivers and
assumption of expenses to
Average Net Assets# ..................... 0.62 % 0.61 % 0.67 % 0.74%
Ratio of Net Investment Income
without waivers and assumption of
expenses to Average Net Assets # ......... 3.23 % 2.55 % 3.16 % 4.73%
</TABLE>

* Fund commenced operations on July 1, 1991.
** In 1996, the Fund changed its fiscal year end from November 30 to
August 31.
# Short periods have been annualized.

<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout the period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the period ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA TREASURY PLUS MONEY MARKET FUND

<TABLE>
<CAPTION>
Year 5/6/96*
Ended through
8/31/97 8/31/96
----------- -----------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................... $ 1.00 $ 1.00
----------- -----------
Income from Investment Operations:
Net Investment Income ....................................... 0.048 0.015
----------- -----------
Less Dividends from Net Investment Income ..................... 0.048 0.015
----------- -----------
Net Asset Value, End of Period ................................. $ 1.00 $ 1.00
=========== ===========
TOTAL RETURN 4.89% 1.50%
=========== ===========
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ........................ $1,605,845 $1,382,184
Ratio of Expenses to Average Net Assets# ..................... 0.59% 0.59%
Ratio of Net Investment Income to Average Net Assets# ......... 4.79% 4.63%
Ratio of Expenses without waivers and assumption of expenses to
Average Net Assets# .......................................... 0.70% 0.73%
Ratio of Net Investment Income without waivers and assumption of
expenses to Average Net Assets# .............................. 4.68% 4.49%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

8
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA FEDERAL MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 5/9/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.048 0.048 0.051 0.013
--------- --------- --------- ---------
Total from Investment Operations ............ 0.048 0.048 0.051 0.013
Less Distributions:
Dividends from Net Investment Income ......... 0.048 0.048 0.051 0.013
--------- --------- --------- ---------
Net Asset Value, End of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
TOTAL RETURN 4.91% 4.83% 5.20% 1.26%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ...... $301,031 $352,934 $203,399 $ 19,955
Ratio of Expenses to Average Net Assets# ...... 0.70% 0.70% 0.69% 0.40%
Ratio of Net Investment Income to Average Net
Assets# ....................................... 4.79% 4.79% 5.16% 4.36%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# ......... 0.82% 0.93% 0.93% 1.02%
Ratio of Net Investment Income without waivers
and assumptions of expenses to Average Net
Assets# .................................... 4.67% 4.56% 4.92% 3.74%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

9
<PAGE>

FINANCIAL HIGHLIGHTS

VISTA U.S. GOVERNMENT MONEY MARKET FUND

<TABLE>
<CAPTION>
Year Year Year 11/1/93 1/1/93*
ended ended ended through through
8/31/97 8/31/96 8/31/95 8/31/94** 10/31/93
----------- ----------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PER-
FORMANCE
Net Asset Value, Beginning of Period . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ----------- --------- ----------- ----------
Income from Investment Operations:
Net Investment Income ............... 0.049 0.049 0.049 0.025 0.019
----------- ----------- --------- ----------- ----------
Less Distributions:
Dividends from Net Investment
Income .............................. 0.049 0.049 0.049 0.025 0.019
----------- ----------- --------- ----------- ----------
Net Asset Value, End of Period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== ========= =========== ==========
TOTAL RETURN 5.04% 4.97% 5.05% 2.48% 2.02%
Ratios/Supplemental Data
Net Assets, End of Period (000
omitted) ........................... $2,139,368 $2,057,023 $341,336 $ 335,365 $ 323,498
Ratio of Expenses to Average Net
Assets# .............................. 0.59% 0.65% 0.80% 0.80% 0.82%
Ratio of Net Investment Income to
Average Net Assets# .................. 4.93% 4.83% 4.93% 2.94% 2.39%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ............... 0.72% 0.73% 0.80% 0.80% 0.82%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net
Assets# ........................... 4.80% 4.75% 4.93% 2.94% 2.39%
</TABLE>

* Commencement of offering shares.

** In 1994 the U.S. Government Money Market Fund changed its fiscal
year-end from October 31 to August 31.

# Short periods have been annualized.

10
<PAGE>

(This Page Intentionally Left Blank)

11
<PAGE>
FINANCIAL HIGHLIGHTS

On May 3, 1996, the Hanover Cash Management Fund merged into Vista Cash
Management Fund. The table set forth below provides selected per share data and
ratios for one Hanover Cash Management Fund share (the accounting survivor of
the merger) outstanding through May 3, 1996 and one Vista Share of the Vista
Cash Management Fund outstanding for periods thereafter. This information is
supplemented by financial statements and accompanying notes appearing in the
Hanover Cash Management Fund's Annual Report to Shareholders for the fiscal
year ended November 30, 1995 and the Fund's Annual Report to Shareholders
for the period ended August 31, 1997, which both are incorporated by reference
into the SAI. Shareholders may obtain a copy of these annual reports by
contacting the Fund or their Shareholder Servicing Agent. The financial
statements and notes, as well as the financial information set forth in the
table below, for the year ended August 31, 1997 and the period ended August 31,
1996 have been audited by Price Waterhouse LLP, independent accountants, whose
report thereon is included in the Fund's Annual Report to Shareholders. Periods
ended prior to December 1, 1995 were audited by other independent accountants.

VISTA CASH MANAGEMENT FUND

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

Year 12/1/95 Year Ended
Ended through --------------------------
8/31/97 8/31/96** 11/30/95 11/30/94
----------- ------------- ----------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ------------- ----------- ----------
Income from Investment Operations:
Net Investment Income ................................. 0.050 0.037 0.054 0.036
----------- ------------- ----------- ----------
Less Distributions:
Dividends from Net Investment Income .................. 0.050 0.037 0.054 0.036
----------- ------------- ----------- ----------
Net Asset Value, End of Period ........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== ============= =========== ==========
TOTAL RETURN 5.09% 3.69% 5.49% 3.62 %
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............... $2,576,142 $1,621,212 $1,634,493 $ 990,045
Ratio of Expenses to Average Net Assets# ............... 0.59% 0.60% 0.58% 0.58 %
Ratio of Net Investment Income to Average Net Assets# . 4.99% 4.91% 5.35% 3.62 %
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ........................ 0.62% 0.63% 0.62% 0.62 %
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets # ......... 4.96% 4.88% 5.31% 3.58 %

<CAPTION>
Year Ended 1/17/89*
-------------------------------------------------- through
11/30/93 11/30/92 11/30/91 11/30/90 11/30/89
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- -----------
Income from Investment Operations:
Net Investment Income ................................. 0.027 0.035 0.059 0.077 0.076
---------- ---------- ---------- ---------- -----------
Less Distributions:
Dividends from Net Investment Income .................. 0.027 0.035 0.059 0.077 0.076
---------- ---------- ---------- ---------- -----------
Net Asset Value, End of Period ........................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ===========
TOTAL RETURN 2.74% 3.51% 6.01% 7.94% 7.83%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............... $ 861,025 $ 560,173 $ 343,166 $ 196,103 $ 134,503
Ratio of Expenses to Average Net Assets# ............... 0.61% 0.67% 0.67% 0.67% 0.67%
Ratio of Net Investment Income to Average Net Assets# . 2.70% 3.41% 5.84% 7.65% 8.62%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ........................ 0.64% 0.72% 0.73% 0.73% 0.74%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets # ......... 2.67% 3.36% 5.78% 7.59% 8.55%
</TABLE>

* Fund commenced operations January 17, 1989.
** In 1996, the Fund changed its fiscal year end from November 30 to
August 31.
# Short periods have been annualized.

<PAGE>
FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders can obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA TAX FREE MONEY MARKET FUND

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

<TABLE>
<CAPTION>
Year Year Year
ended ended ended
8/31/97 8/31/96 8/31/95
--------- --------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from Investment Operations:
Net Investment Income .............................. 0.031 0.029 0.029
--------- --------- ---------
Less Distributions:
Dividends from Net Investment Income ............... 0.031 0.029 0.029
--------- --------- ---------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN 3.12% 2.92% 2.99%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $565,625 $574,115 $166,915
Ratio of Expenses to Average Net Assets# ............ 0.59% 0.69% 0.86%
Ratio of Net Investment Income to
Average Net Assets# ................................. 3.08% 2.89% 2.96%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 0.73% 0.80% 0.94%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 2.94% 2.78% 2.87%

<CAPTION>
11/1/93 Year Ended
through -----------------------------------------------------
8/31/94** 10/31/93 10/31/92 10/31/91 10/31/90
-------- ----------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ----------- ---------- ---------- ----------
Income from Investment Operations:
Net Investment Income .............................. 0.015 0.019 0.028 0.043 0.054
---------- ----------- ---------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.015 0.019 0.028 0.043 0.054
---------- ----------- ---------- ---------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== =========== ========== ========== ==========
TOTAL RETURN 1.54% 1.90% 2.79% 4.37% 5.47%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $ 121,710 $ 160,497 $ 145,241 $ 115,770 $ 112,770
Ratio of Expenses to Average Net Assets# ............ 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Net Investment Income to
Average Net Assets# ................................. 1.82% 1.88% 2.70% 4.27% 5.33%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 0.85% 0.91% 0.98% 0.99% 0.97%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 1.82% 1.83% 2.57% 4.13% 5.21%

<CAPTION>
Year Ended 9/4/87*
---------------------- through
10/31/89 10/31/88 10/31/87
-------- -------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Income from Investment Operations:
Net Investment Income .............................. 0.056 0.045 0.007
---------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.056 0.045 0.007
---------- ---------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00
========== ========== ==========
TOTAL RETURN 5.76% 4.61% 4.50%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $ 107,534 $ 116,260 $ 133,177
Ratio of Expenses to Average Net Assets# ............ 0.85% 0.85% 0.85%
Ratio of Net Investment Income to
Average Net Assets# ................................. 5.59% 4.47% 4.47%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ..................... 1.01% 1.02% 1.18%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 5.43% 4.30% 4.15%
</TABLE>

* Commencement of offering shares.

** In 1994 the Tax Free Money Market Fund changed its fiscal year-end
from October 31 to August 31.

# Short periods have been annualized.

<PAGE>
FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders can obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to Shareholders.

VISTA NEW YORK TAX FREE MONEY MARKET FUND

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

<TABLE>
<CAPTION>
Year Year Year
ended ended ended
8/31/97 8/31/96 8/31/95
--------- --------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from Investment Operations:
Net Investment Income ................................. 0.030 0.028 0.028
--------- --------- ---------
Less Distributions:
Dividends from Net Investment Income ............... 0.030 0.028 0.028
--------- --------- ---------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN 3.02% 2.85% 2.88%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $956,766 $890,413 $378,400
Ratio of Expenses to Average Net Assets# ............ 0.59% 0.74% 0.86%
Ratio of Net Investment Income to
Average Net Assets# ................................. 2.97% 2.79% 2.84%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# .................. 0.73% 0.83% 0.95%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 2.83% 2.70% 2.75%

11/1/93 Year Ended
through -----------------------------------------------------
8/31/94** 10/31/93 10/31/92 10/31/91 10/31/90
-------- ----------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ----------- ---------- ---------- ----------
Income from Investment Operations:
Net Investment Income ................................. 0.015 0.017 0.025 0.038 0.050
---------- ----------- ---------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income ............... 0.015 0.017 0.025 0.038 0.050
---------- ----------- ---------- ---------- ----------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== =========== ========== ========== ==========
TOTAL RETURN 1.48% 1.75% 2.53% 3.87% 5.02%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $ 365,669 $ 300,425 $ 285,889 $ 230,855 $ 251,897
Ratio of Expenses to Average Net Assets# ............ 0.85% 0.85% 0.85% 0.85% 0.83%
Ratio of Net Investment Income to
Average Net Assets# ................................. 1.77% 1.72% 2.48% 3.83% 4.91%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# .................. 0.85% 0.89% 0.92% 0.92% 0.91%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 1.77% 1.68% 2.41% 3.76% 4.83%

<CAPTION>
Year Ended 9/4/87*
---------------------- through
10/31/89 10/31/88 10/31/87
-------- -------- --------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .................. $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------
Income from Investment Operations:
Net Investment Income ................................. 0.051 0.043 0.009
---------- ---------- ---------
Less Distributions:
Dividends from Net Investment Income ............... 0.051 0.043 0.009
---------- ---------- ---------
Net Asset Value, End of Period ........................ $ 1.00 $ 1.00 $ 1.00
========== ========== =========
TOTAL RETURN 5.28% 4.50% 4.71%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $ 252,201 $ 230,639 $ 2,385
Ratio of Expenses to Average Net Assets# ............ 0.81% 0.78% 0.25%
Ratio of Net Investment Income to
Average Net Assets# ................................. 5.15% 4.26% 4.71%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets# .................. 0.95% 1.10% 1.50%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ...... 5.01% 3.94% 3.46%
</TABLE>

* Commencement of operations.

** In 1994 the New York Tax Free Money Market Fund changed its fiscal
year-end from October 31 to August 31.

# Short periods have been annualized.

<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders can obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is also included in the Annual
Report to Shareholders.

VISTA CALIFORNIA TAX FREE MONEY MARKET FUND FUND

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

<TABLE>
<CAPTION>
Year Year Year
ended ended ended
8/31/97 8/31/96 8/31/95
-------- -------- --------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------
Income from Investment Operations:
Net Investment Income ................................. 0.300 0.030 0.033
--------- --------- ---------
Less Distributions:
Dividends from Net Investment Income .................. 0.300 0.030 0.033
--------- --------- ---------
Net Asset Value, End of Period ........................... $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN 3.02% 3.06% 3.32%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............... $ 45,509 $ 42,819 $ 58,315
Ratio of Expenses to Average Net Assets# ............... 0.56% 0.56% 0.48%
Ratio of Net Investment Income to Average Net Assets# . 2.99% 3.03% 3.25%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ........................ 0.86% 1.02% 1.07%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ......... 2.69% 2.57% 2.66%

18
<CAPTION>
11/1/93 Year 3/4/92*
through ended through
8/31/94** 10/31/93 10/31/92
---------- -------- ----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 1.00 $ 1.00 $ 1.00
---------- --------- ---------
Income from Investment Operations:
Net Investment Income ................................. 0.018 0.023 0.019
---------- --------- ---------
Less Distributions:
Dividends from Net Investment Income .................. 0.018 0.023 0.019
---------- --------- ---------
Net Asset Value, End of Period ........................... $ 1.00 $ 1.00 $ 1.00
========== ========= =========
TOTAL RETURN 1.82% 2.30% 2.89%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............... $ 64,423 $ 45,346 $ 44,643
Ratio of Expenses to Average Net Assets# ............... 0.46% 0.42% 0.06%
Ratio of Net Investment Income to Average Net Assets# . 2.17% 2.26% 2.86%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# ........................ 0.94% 1.02% 1.23%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ......... 1.69% 1.66% 1.69%
</TABLE>

* Commencement of operations.

** In 1994 the California Tax Free Money Market Fund changed its fiscal
year-end from October 31 to August 31.

# Short periods have been annualized.

<PAGE>

VISTA TREASURY PLUS
MONEY MARKET FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and maintenance of liquidity.

The Fund invests in direct obligations of the U.S. Treasury, including Treasury
bills, bonds and notes, which differ principally only in their interest rates,
maturities and dates of issuance. In addition, the Fund will seek to enhance
its yield by investing in repurchase agreements which are fully collateralized
by obligations issued or guaranteed by the U.S. Treasury. The dollar weighted
average maturity of the Fund will be 60 days or less.

VISTA FEDERAL
MONEY MARKET FUND
The Fund's objective is to provide current income consistent with preservation
of capital and maintenance of liquidity.

- --------------------------------------------------------------------------------
Shareholders of the above Funds that reside in a state that imposes an income
tax should determine through consultation with their own tax advisors whether
such interest income, when distributed by the Fund, will be considered by the
state to have retained exempt status, and whether the Fund's capital gains and
other income, if any, when distributed will be subject to the state's income
tax. See "How Dividends and Distributions are Made; Tax Information."

20
<PAGE>

VISTA U.S. GOVERNMENT MONEY MARKET FUND
The Fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and maintenance of liquidity.

VISTA CASH MANAGEMENT FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and the maintenance of liquidity.

VISTA TAX FREE
MONEY MARKET FUND
The Fund's objective is to provide as high a level of current income which is
excluded from gross income for federal income tax purposes as is consistent
with the preservation of capital and maintenance of liquidity.

The Fund invests in a non-diversified portfolio of short-term, fixed rate and
variable rate Municipal Obligations (as defined under "Additional Investment
Policies of the Tax Free Funds"). As a fundamental policy, under normal market
conditions the Fund will have at least 80% of its assets invested in Municipal
Obligations the interest on which, in the opinion of bond counsel, is excluded
from gross income for federal income tax purposes and does not constitute a
preference item which would be subject to the federal alternative minimum tax
on individuals (these preference items are referred to as "AMT Items").
Although the Fund will seek to invest 100% of its assets in such Municipal
Obligations, it reserves the right under normal market conditions to invest up
to 20% of its total assets in AMT Items or securities the interest on which is
subject to federal income tax. For temporary defensive purposes, the Fund may
exceed this limitation. The dollar weighted

21
<PAGE>

average maturity of the Fund will be 90 days or less.

VISTA NEW YORK TAX FREE MONEY MARKET FUND
The Fund's objective is to provide as high a level of current income which is
excluded from gross income for federal income tax purposes and from New York
State and New York City personal income taxes as is consistent with the
preservation of capital and maintenance of liquidity.

The Fund invests in a non-diversified portfolio of short-term, fixed rate and
variable rate Municipal Obligations. Except when the Fund's advisers determine
that acceptable securities are unavailable for investment, at least 65% of the
assets of the Fund will be invested in New York Municipal Obligations (as
defined under "Additional Investment Policies of the Tax Free Funds"), although
the exact amount of its assets invested in such securities will vary from time
to time. To the extent suitable New York Municipal Obligations are not
available for investment, the Fund may purchase Municipal Obligations issued by
other states, their agencies and instrumentalities. The portion of the Fund's
assets invested in such other Municipal Obligations would generally be subject
to New York State and New York City personal income taxes.

As a fundamental policy, under normal market conditions the Fund will have at
least 80% of its assets invested in Municipal Obligations the interest on
which, in the opinion of bond counsel, is excluded from gross income for
federal income tax purposes and which are not AMT Items. Although the Fund will
seek to invest 100% of its assets in such Municipal Obligations, it reserves
the right under normal market conditions to invest up to 20% of its total
assets in AMT Items or securities the interest on which is subject to federal
income tax. For temporary defensive purposes, the Fund may exceed this
limitation. The dollar weighted average maturity of the Fund will be 90 days or
less.

VISTA CALIFORNIA TAX FREE MONEY MARKET FUND
The Fund's objective is to provide as high a level of current income exempt
from federal and State of California income taxes as is consistent with the
preservation of capital and maintenance of liquidity.

The Fund invests primarily in a non-diversified portfolio of California
Municipal Obligations (as defined under "Additional Investment Policies of the
Tax Free Funds"). As a fundamental policy, the Fund will invest at least 65% of
the value of its total assets in California Municipal Obligations, except when
the Fund is maintaining a temporary defensive position. To the extent suitable
California Municipal Obligations are not available for investment, the Fund may
purchase Municipal Obligations issued by other states, their agencies and
instrumentalities. The portion of the Fund's assets invested in such other
Municipal Obligations would generally be subject to California state personal
income tax.

As a fundamental policy, the Fund will invest at least 80% of the value of its
net assets in Municipal Obligations, except when the Fund is

22
<PAGE>

maintaining a temporary defensive position. Although the Fund will seek to
invest 100% of its assets in Municipal Obligations, it reserves the right under
normal market conditions to invest up to 20% of its total assets in AMT Items
or securities the interest on which is subject to federal income tax. For
temporary defensive purposes, the Fund may exceed this limitation. The dollar
weighted average maturity of the Fund will be 90 days or less.

Each Fund seeks to maintain a net asset value of $1.00 per share.

The Funds invest only in U.S. dollar-denominated high quality obligations which
are determined to present minimal credit risks. This credit determination must
be made in accordance with procedures established by the Board of Trustees.
Each investment must be rated in the highest short-term rating category (the
two highest short-term rating categories in the case of Vista New York Tax Free
Money Market Fund and Vista California Tax Free Money Market Fund) by at least
two national rating organizations ("NROs") (or one NRO if the instrument was
rated only by one such organization) or, if unrated, must be determined to be
of comparable quality in accordance with the procedures of the Trust. If a
security has an unconditional guarantee or similar enhancement, the issuer of
the guarantee or enhancement may be relied upon in meeting these ratings
requirements rather than the issuer of the security. Securities in which the
Funds invest may not earn as high a level of current income as long-term or
lower quality securities.

The Funds purchase only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations.

Although each Fund seeks to be fully invested, at times it may hold uninvested
cash reserves, which would adversely affect its yield.

Vista Tax Free Money Market Fund, Vista New York Tax Free Money Market Fund and
Vista California Tax Free Money Market Fund (together, the "Tax Free Funds")
are classified as "non-diversified" funds under federal securities law. These
Funds' assets may be more concentrated in the securities of any single issuer
or group of issuers than if the Funds were diversified. Each Fund other than
the Tax Free Funds is classified as a "diversified" fund under federal
securities law.

There can be no assurance that any Fund will achieve its investment objective.

23
<PAGE>

REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. Each Fund other than Vista 100% U.S. Treasury Securities Money
Market Fund and Vista Federal Money Market Fund may enter into agreements to
purchase and resell securities at an agreed-upon price and time. Each Fund
other than the Tax Free Funds also has the ability to lend portfolio securities
in an amount equal to not more than 30% of its total assets to generate
additional income. These transactions must be fully collateralized at all
times. Each Fund may purchase securities for delivery at a future date, which
may increase its overall investment exposure and involves a risk of loss if the
value of the securities declines prior to the settlement date. Each Fund may
enter into put transactions, including those sometimes referred to as stand-by
commitments, with respect to securities in its portfolio. In these
transactions, a Fund would acquire the right to sell a security at an agreed
upon price within a specified period prior to its maturity date. A put
transaction will increase the cost of the underlying security and consequently
reduce the available yield. Each of these transactions involve some risk to a
Fund if the other party should default on its obligation and the Fund is
delayed or prevented from recovering the collateral or completing the
transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

24
<PAGE>

segregated account in which it will maintain liquid assets on a daily basis in
an amount at least equal to the repurchase price (including accrued interest).
A Fund would be required to pay interest on amounts obtained through reverse
repurchase agreements, which are considered borrowings under federal securities
laws.

STRIPS AND ZERO COUPON OBLIGATIONS. Each Fund other than Vista 100% U.S.
Treasury Securities Money Market Fund may invest up to 20% of its total assets
in stripped obligations (i.e., separately traded principal and interest
components of securities) where the underlying obligation is backed by the full
faith and credit of the U.S. Government, including instruments known as
"STRIPS". Vista Cash Management Fund and each Tax Free Fund may also invest in
zero coupon obligations. Zero coupon obligations are debt securities that do
not pay regular interest payments, and instead are sold at substantial
discounts from their value at maturity. The value of STRIPS and zero coupon
obligations tends to fluctuate more in response to changes in interest rates
than the value of ordinary interest-paying debt securities with similar
maturities. The risk is greater when the period to maturity is longer.

FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. Each Fund
may invest in floating rate securities, whose interest rates adjust
automatically whenever a specified interest rate changes, and variable rate
securities, whose interest rates are periodically adjusted. Certain of these
instruments permit the holder to demand payment of principal and accrued
interest upon a specified number of days' notice from either the issuer or a
third party. The securities in which the Tax Free Funds and the Vista Cash
Management Fund may invest include participation certificates and, in the case
of Vista Cash Management Fund, certificates of indebtedness or safekeeping.
Participation certificates are pro rata interests in securities held by others;
certificates of indebtedness or safekeeping are documentary receipts for such
original securities held in custody by others. As a result of the floating or
variable rate nature of these investments, a Fund's yield may decline and it
may forego the opportunity for capital appreciation during periods when
interest rates decline; however, during periods when interest rates increase, a
Fund's yield may increase and it may have reduced risk of capital depreciation.
Demand features on certain floating or variable rate securities may obligate a
Fund to pay a "tender fee" to a third party. Demand features provided by
foreign banks involve certain risks associated with foreign investments. The
Internal Revenue Service has not ruled on whether interest on participations in
floating or variable rate municipal obligations is tax exempt, and the Tax Free
Funds would purchase such instruments based on opinions of bond counsel.

25
<PAGE>

ADDITIONAL INVESTMENT POLICIES OF VISTA CASH MANAGEMENT FUND
Vista Cash Management Fund may also invest in the following instruments, when
consistent with its overall objective and policies. These instruments, and
certain associated risks, are more fully described in the SAI.

MUNICIPAL OBLIGATIONS. The Fund may invest in high-quality, short-term
municipal obligations that carry yields that are competitive with those of
other types of money market instruments in which it may invest. Dividends paid
by this Fund that are derived from interest on municipal obligations will be
taxable to shareholders for federal income tax purposes.

SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES.
The Fund intends to invest a substantial portion of its assets from time to
time in securities of foreign governments and supranational agencies. The Fund
will limit its investments in foreign government obligations to commercial
paper and other short-term notes issued or guaranteed by the governments of
Western Europe, Australia, New Zealand, Japan and Canada. Obligations of
supranational agencies, such as the International Bank for Reconstruction and
Development (also known as the World Bank) are supported by subscribed, but
unpaid, commitments of member countries. There is no assurance that these
commitments will be undertaken or complied with in the future, and foreign and
supranational securities are subject to certain risks associated with foreign
investing.

26
<PAGE>

programs sponsored by banks and brokerage firms. These are not deemed U.S.
Government securities. These notes and bonds are held in custody by a bank on
behalf of the owners of the receipts.

ADDITIONAL INVESTMENT POLICIES OF THE TAX FREE FUNDS
The following provides additional information regarding the permitted
investments of the Tax Free Funds. These investments, and certain associated
risks, are more fully described in the SAI.

MUNICIPAL OBLIGATIONS.
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, and their authorities,
agencies, instrumentalities and political subdivisions, the interest on which,
in the opinion of bond counsel, is excluded from gross income for federal
income tax purposes (without regard to whether the interest thereon is also
exempt from the personal income taxes of any state or whether the interest
thereon constitutes a preference item for purposes of the federal alternative
minimum tax). "New York Municipal Obligations" are Municipal Obligations of the
State of New York and its political subdivisions and of Puerto Rico, other U.S.
territories and their political subdivisions, the interest on which, in the
opinion of bond counsel, is exempt from New York State and New York City
personal income taxes. "California Municipal Obligations" are Municipal
Obligations of the State of California, its political subdivisions, authorities
and corporations, the interest on which, in the opinion of bond counsel, is
exempt from State of California personal income taxes.

Municipal Obligations are issued to obtain funds for various public purposes,
such as the construction of public facilities, the payment of general operating
expenses or the refunding of outstanding debts. They may also be issued to
finance various private activities, including the lending of funds to public or
private institutions for the construction of housing, educational or medical
facilities, and may include certain types of industrial development bonds,
private activity bonds or notes issued by public authorities to finance
privately owned or operated facilities, or to fund short-term cash
requirements. Short-term Municipal Obligations may be issued as interim
financing in anticipation of tax collections, revenue receipts or bond sales to
finance various public purposes. The Municipal Obligations in which the Tax
Free Funds invest may consist of municipal notes, municipal commercial paper
and municipal bonds maturing or deemed to mature in 397 days or less.

27
<PAGE>

facility or class of facilities, or a specific revenue source, and generally
are not payable from the unrestricted revenues of the issuer. Industrial
development bonds and private activity bonds are in most cases revenue
obligation securities, the credit quality of which is directly related to the
private user of the facilities.

From time to time, each Tax Free Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental issuers such as hospitals or airports,
provided, however, that a Tax Free Fund may not invest more than 25% of the
value of its total assets in such bonds if the issuers are in the same
industry.

MUNICIPAL LEASE OBLIGATIONS. The Tax Free Funds may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. Each Tax Free Fund will limit
investments in non-appropriation leases to 10% of its assets. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove difficult.
Certain investments in municipal lease obligations may be illiquid.

LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Funds limit
investment risks for their shareholders. These regulations and restrictions
prohibit each Fund from: (a) with certain limited exceptions, investing more
than 5% of its total assets in the securities of any one issuer (this
limitation does not apply to the Tax Free Funds or to U.S. Government
Obligations held by the other Funds); (b) investing more than 10% of its net
assets in illiquid securities (which include securities restricted as to resale
unless they are determined to be readily marketable in accordance with
procedures established by the Board of Trustees); or (c) investing more than
25% of its total assets in any one industry (excluding U.S. Government
Obligations, bank obligations and, for the Tax Free Funds, obligations of
states, cities, municipalities or other public authorities, as well as
municipal obligations secured by bank letters of credit or guarantees). A
complete description of these and other investment policies is included in the
SAI. Except for each Fund's investment objective, restriction (c) above and
investment policies designated as fundamental above or in the SAI, the Funds'
investment policies are not fundamental. The Trustees may change any non-
fundamental investment policy without shareholder approval.

28
<PAGE>

RISK FACTORS
GENERAL. There can be no assurance that any Fund will be able to maintain a
stable net asset value. Changes in interest rates may affect the value of the
obligations held by the Funds. The value of fixed income securities varies
inversely with changes in prevailing interest rates, although money market
instruments are generally less sensitive to changes in interest rates than are
longer-term securities. For a discussion of certain other risks associated with
the Funds' additional investment activities, see "Other Investment Practices,"
"Additional Investment Policies of Vista Cash Management Fund" and "Additional
Investment Policies of the Tax Free Funds."

VISTA CASH MANAGEMENT FUND. This Fund is permitted to invest any portion of its
assets in obligations of domestic banks (including their foreign branches), and
in obligations of foreign issuers. The ability to concentrate in the banking
industry may involve certain credit risks, such as defaults or downgrades, if
at some future date adverse economic conditions prevail in such industry. U.S.
banks are subject to extensive governmental regulations which may limit both
the amount and types of loans which may be made and interest rates which may be
charged. In addition, the profitability of the banking industry is largely
dependent upon the availability and cost of funds for the purpose of financing
lending operations under prevailing money market conditions. General economic
conditions as well as exposure to credit losses arising from possible financial
difficulties of borrowers play an important part in the operations of this
industry.

THE TAX FREE FUNDS. Each Tax Free Fund may invest without limitation in
Municipal Obligations secured by letters of credit or guarantees from U.S.
banks (including their foreign branches), and may also invest in Municipal
Obligations backed by foreign institutions. These investments are subject to
the considerations discussed in the preceding paragraphs relating to Vista Cash
Management Fund. Changes in the credit quality of banks or other financial
institutions backing these Funds' Municipal Obligations

29
<PAGE>

could cause losses to these Funds and affect their share price. Credit
enhancements which are supplied by foreign or domestic banks are not subject to
federal deposit insurance.

Each of the Tax Free Funds is "non-diversified," which may make the value of
their shares more susceptible to developments affecting issuers in which these
Funds invest. In addition, more than 25% of the assets of each Tax Free Fund
may be invested in securities to be paid from revenue of similar projects,
which may cause these Funds to be more susceptible to similar economic,
political, or regulatory developments (particularly with respect to Vista New
York Tax Free Money Market Fund and Vista California Tax Free Money Market
Fund, since the issuers in which these Funds invest will generally be located
in a single state).

Because the Tax Free Funds will invest primarily in obligations issued by
states, cities, public authorities and other municipal issuers, the Tax Free
Funds are susceptible to factors affecting such states and their municipal
issuers. The New York and California Tax Free Money Market Funds will be
particularly susceptible to factors affecting the State of New York, the State
of California, and their respective municipal issuers. Because the New York Tax
Free Money Market Fund and the California Tax Free Money Market Fund are
concentrated in securities issued by their respective states or entities within
those states, investments in these Funds may be riskier than an investment in
other types of money market funds. A number of municipal issuers, including the
State of New York, New York City, the State of California and certain
California counties, have a recent history of significant financial and fiscal
difficulties. California's Orange County recently defaulted on certain of its
indebtedness. If a municipal issuer is unable to meet its financial
obligations, the income derived by the related Fund and that Fund's ability to
preserve capital and liquidity could be adversely affected. See the SAI for
further information.

MANAGEMENT
- ----------
THE FUNDS' ADVISERS

30
<PAGE>

Manhattan Corporation, a bank holding company. Chase and its predecessors have
over 100 years of money management experience.

HOW TO BUY, SELL AND EXCHANGE SHARES
- ------------------------------------
HOW TO BUY SHARES
You can open a Fund account with as little as $2,500 or $1,000 for IRAs,
SEP-IRAs and the Systematic Investment Plan. Additional investments may be made
at any time with as little as $100. You can buy Fund shares three ways--
through an investment representative or shareholder servicing agent, through
the Funds' distributor by calling the Vista Service Center, or through the
Systematic Investment Plan.

31
<PAGE>

purchase order will be cancelled and the shareholder will be liable for any
losses or expenses incurred by a Fund. For purchases by wire, if federal funds
are not received by the Vista Service Center by 4:00 Eastern time on the day of
the purchase order, the order will be canceled.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

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

BUYING SHARES THROUGH AN INVESTMENT REPRESENTATIVE OR SHAREHOLDER SERVICING
AGENT. Vista Shares of the Funds may be purchased through a shareholder
servicing agent (i.e., a financial institution, such as a bank, trust company
or savings and loan association that has entered into a shareholder servicing
agreement with the Funds) or by customers of brokers or certain financial
institutions which have entered into Selected Dealer Agreements with the Funds'
distributor. An investor may purchase Vista Shares by authorizing his
shareholder servicing agent or investment representative to purchase shares on
his behalf through the Funds' distributor. Shareholder servicing agents may
offer additional services to their customers, including customized procedures
for the purchase and redemption of Vista Shares, such as pre-authorized or
systematic purchase and withdrawal programs and "sweep" checking programs. For
further information, see "Other Information Concerning the Funds" in this
prospectus and the SAI.

Vista 100% U.S. Treasury
Securities Money Market Fund . Noon
Tax Free Funds ..................... Noon
Vista Federal Money Market Fund 2:00 p.m.
Vista U.S. Government Money
Market Fund .................. 2:00 p.m.
Vista Cash Management Fund ......... 2:00 p.m.
Vista Treasury Plus Money Market
Fund ........................... 4:00 p.m.

32
<PAGE>

Each Fund reserves the right to set an earlier Cut-off Time on any Fund
Business Day on which the Public Securities Association ("PSA") recommends an
early close to trading on the U.S. Government securities market. Generally,
such earlier Cut-off Time will be noon (Eastern time). The PSA is the trade
association that represents securities firms and banks that underwrite, trade
and sell debt securities, both domestically and internationally. Orders for
shares received and accepted prior to the Cut-off Times will be entitled to all
dividends declared on that day. Orders received for shares after a Fund's
Cut-off Time and prior to 4:00 p.m., Eastern time on any Fund Business Day will
not be accepted and executed on the same day except at the Funds' discretion.
Orders received and not accepted after a Fund's Cut-off Time will be considered
received prior to the Fund's Cut-off Time on the following Fund Business Day
and processed accordingly. Orders are in proper form only after funds are
converted to federal funds. Orders paid by check and received before a Fund's
Cut-off Time will generally be available for the purchase of shares the
following Fund Business Day. The Funds reserve the right to reject any purchase
order.

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

33
<PAGE>

be authorized to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as his or her
representative, who can provide the Funds with his or her account registration
and address as it appears on the Funds' records.

SYSTEMATIC WITHDRAWAL PLAN. You can make regular withdrawals of $50 or more
monthly, quarterly or semiannually. A minimum account balance of $5,000 is
required to establish a Systematic Withdrawal Plan. Call the Vista Service
Center at 1-800-34-VISTA for complete instructions.

INVOLUNTARY REDEMPTION OF ACCOUNTS. Each Fund may involuntary redeem your
shares if the aggregate net asset value of the shares in your account is less
than $500 due to redemptions or if you purchase through the Systematic
Investment Plan and fail to meet that Fund's investment minimum within a twelve
month period. In the event of any such redemption, you will receive at least 60
days' notice prior to the redemption.

HOW TO EXCHANGE YOUR SHARES

You can exchange your shares for Vista Shares of certain other Vista money
market funds at net asset value and for certain classes of shares of the Vista
non-money market funds at net asset value plus any applicable sales charge,
subject to any minimum investment requirement. Not all Vista funds offer all
classes of shares. The prospectus of the other Vista fund into which shares are
being exchanged should be read carefully and retained for future reference.

34
<PAGE>

HOW THE FUNDS
VALUE THEIR SHARES
- ------------------
The net asset value of each class of shares of each Fund is currently
determined daily as of 4:00 p.m., Eastern time on each Fund Business Day by
dividing the net assets of a Fund attributable to such class by the number of
shares of such class outstanding at the time the determination is made.
Effective with the anticipated introduction of certain automated share purchase
programs, the net asset value of shares of each class of Funds available
through the programs will also be determined as of 6:00 p.m., Eastern time on
each Fund Business Day.

35
<PAGE>

from $1.00 per share based upon amortized cost. In the event the Trustees
determine that a deviation exists that may result in material dilution or other
unfair results to investors or existing shareholders, the Trustees will take
such corrective action as they regard as necessary and appropriate.

TAXATION OF DISTRIBUTIONS
All Fund distributions of net investment income will be taxable as ordinary
income. Distributions by the Tax Free Funds of their tax-exempt interest income
will not be subject to federal income tax. Such distributions will generally be
subject to state and local taxes, but may be exempt if paid out of interest on
municipal obligations of the state or locality in which you reside. Any
distributions of net capital gain which are designated as "capital gain
dividends" will be taxable as long-term capital gain, regardless of how long
you have held your shares. The taxation of your distributions is the same
whether received in cash or in shares through the reinvestment of
distributions.

Early in each calendar year the Funds will notify you of the amount

36
<PAGE>

and tax status of distributions paid to you for the preceding year.

OTHER INFORMATION CONCERNING THE FUNDS
- --------------------------------------
DISTRIBUTION PLANS

The Funds' distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. Each Fund
other than the Vista Cash Management Fund has adopted a Rule 12b-1 distribution
plan which provides for the payment of distribution fees at annual rates of up
to 0.10% of the average daily net assets attributable to its Vista Shares.
There is no distribution plan for the Vista Cash Management Fund. Payments
under the distribution plan shall be used to compensate or reimburse the Funds'
distributor and broker-dealers for services provided and expenses incurred in
connection with the sale of Vista Shares, and are not tied to the amount of
actual expenses incurred. Promotional activities for the sale of Vista Shares
will be conducted generally by the Vista Family of Funds, and activities
intended to promote a Fund's Vista Shares may also benefit the Fund's other
shares and other Vista funds.

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

SHAREHOLDER SERVICING AGENTS
The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase) under which the shareholder
servicing agents have agreed to provide certain support services to their
customers. These services include one or more of the following: assisting with
purchase and redemption transactions, maintaining shareholder accounts and
records, furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.35% of the average daily net assets of the Vista Shares of each
Fund held by investors for whom the shareholder servicing agent maintains a
servicing relationship. Shareholder servicing agents may subcontract with other
parties for the provision of shareholder support services. The Board of
Trustees has determined that the amount

37
<PAGE>

payable in respect of "service fees" (as defined in the NASD Rules of Fair
Practice) does not exceed 0.25% of the average annual net assets attributable
to the Vista Shares of each Fund.

ADMINISTRATOR AND
SUB-ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of each Fund's
average daily net assets.

38
<PAGE>

CUSTODIAN

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

ORGANIZATION AND
DESCRIPTION OF SHARES
Each Fund is a portfolio of Mutual Fund Trust, an open-end management
investment company organized as a Massachusetts business trust in 1994 (the
"Trust"). The Trust has reserved the right to create and issue additional
series and classes. Each share of a series or class represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class participate equally in the
earnings, dividends and assets of the particular series or class. Shares have
no preemptive or conversion rights. Shares when issued are fully paid and
non-assessable, except as set forth below. Shareholders are entitled to one
vote for each whole share held, and each fractional share shall be entitled to
a proportionate fractional vote, except that Trust shares held in the treasury
of the Trust shall not be voted. Shares of each class of a Fund generally vote
together except when required

39
<PAGE>

under federal securities laws to vote separately on matters that only affect a
particular class, such as the approval of distribution plans for a particular
class. Fund shares will be maintained in book entry form, and no certificates
representing shares owned will be issued to shareholders.

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

PERFORMANCE INFORMATION
- -----------------------
Each Fund may advertise its annualized "yield" and its "effective yield".
Annualized "yield" is determined by assuming that income generated by an
investment in a Fund over a stated seven-day period (the "yield") will continue
to be generated each week over a 52-week period. It is shown as a percentage of
such investment. "Effective yield" is the annualized "yield" calculated
assuming the reinvestment of the income earned during each week of the 52-week
period. The "effective yield" will be slightly higher than the "yield" due to
the compounding effect of this assumed reinvestment.

The Tax Free Funds may also quote a "tax equivalent yield", the yield that a
taxable money market fund would have to generate in order to produce an
after-tax yield equivalent to a Tax Free Fund's yield. The tax equivalent yield
of a Tax Free Fund can then be compared to the yield of a taxable

40
<PAGE>

money market fund. Tax equivalent yields can be quoted on either a "yield" or
"effective yield" basis.

41
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

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

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

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

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

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

VMM-1-1297

<PAGE>

[CHASE VISTA LOGO]

PROSPECTUS
VISTASM NEW YORK TAX FREE INCOME FUND
CLASS A AND B SHARES

INVESTMENT STRATEGY: INCOME

December 29, 1997

<PAGE>

2
<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you might pay on your Fund investment, including examples
Financial Highlights ...................................................... 6
How the Fund has performed
Fund Objectives ............................................................ 8
Investment Policies ......................................................... 8
The kinds of securities in which the Fund invests, investment policies and
techniques, and risks
Management .................................................................. 15
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management,
the Fund's sub-adviser, and the individuals who manage the Fund
About Your Investment ...................................................... 15
Alternative sales arrangements
How to Buy, Sell and Exchange Shares ....................................... 16
How the Fund Values Its Shares ............................................. 23
How Distributions Are Made; Tax Information ................................. 23
How the Fund distributes its earnings, and tax treatment related
to those earnings
Other Information Concerning the Fund ....................................... 25
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 29
How performance is determined, stated and/or advertised
Make the Most of Your Vista Privileges .................................... 31

3
<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Fund and is, except as
described below, based on expenses incurred in the most recent fiscal year. The
examples show the cumulative expenses attributable to a hypothetical $1,000
investment over specified periods.

<TABLE>
<CAPTION>
Class A Class B
Shares Shares
-------- ----------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) ................................. 4.50% None
Maximum Deferred Sales Charge
(as a percentage of the lower of original purchase price
or redemption proceeds)* .......................................... None 5.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver)** ..................... 0.24%# 0.24%#
12b-1 Fee (after estimated waiver, where indicated)*** ............... 0.00%**# 0.75%
Shareholder Servicing Fee (after estimated waiver, where indicated) ... 0.11%**# 0.25%
Other Expenses ......................................................... 0.40%# 0.40%#
-------- -----
Total Fund Operating Expenses (after waiver of fee)** .................. 0.75%# 1.64%
======== =====
</TABLE>

<TABLE>
<CAPTION>
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- -------- -------- --------
<S> <C> <C> <C> <C>
Class A Shares+ ........................ $52 $68 $ 85 $134
Class B Shares:
Assuming complete redemption at the end
of the period++ +++ .................. $67 $82 $109 $175
Assuming no redemptions +++ ............ $17 $52 $ 89 $175
</TABLE>

** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Investment Advisory Fee would be 0.30% for Class A and
Class B shares, the 12b-1 Fee and Shareholder Servicing Fee would be
0.25% for Class A shares, and Total Fund Operating Expenses would be
1.20% and 1.70% for Class A and Class B shares, respectively.

*** Long-term shareholders in mutual funds with 12b-1 fees, such as Class A
and Class B shareholders of the Fund, may pay more than the economic
equivalent of the maximum front-end sales charge permitted by rules of
the National Association of Securities Dealers, Inc.

# Restated from most recent fiscal year to reflect current waiver
arrangements.

+ Assumes deduction at the time of purchase of the maximum sales
charge.
++ Assumes deduction at the time of redemption of the maximum applicable
deferred sales charge.
+++ Ten-year figures assume conversion of Class B shares to Class A shares
at the beginning of the ninth year after purchase. See "How to Buy, Sell
and Exchange Shares."

4
<PAGE>

5
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Class A Share and one Class B Share. This information is supplemented by
financial statements and accompanying notes appearing in the Fund's Annual
Report to Shareholders for the period ended August 31, 1997, which is
incorporated by reference into the SAI. Shareholders may obtain a copy of this
annual report by contacting the Fund or their Shareholder Servicing Agent. The
financial statements and notes, as well as the financial information in the
table below, have been audited by Price Waterhouse LLP, independent
accountants, whose report is included in the Annual Report to Shareholders.

VISTA NEW YORK TAX FREE INCOME FUND

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

<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------------------
Year ended Year ended
------------------------------------ 11/1/93 -------------------------
through
8/31/97 8/31/96 8/31/95 8/31/94+ 10/31/93 10/31/92
-------- ------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ...... $ 11.39 $ 11.47 $ 11.30 $ 12.27 $ 11.18 $ 11.24
-------- --------- -------- -------- --------- ---------
Income from Investment Operations:
Net Investment Income .................. 0.555 0.555 0.570 0.473 0.592 0.473
Net Gains or (Losses) in Securities
(both realized and unrealized) ......... 0.432 (0.077) 0.167 (0.688) 1.281 0.274
-------- --------- --------- -------- --------- ----------
Total from Investment Operations ......... 0.987 0.478 0.737 (0.215) 1.873 0.747
Less Distributions:
Dividends from Net Investment Income ... 0.554 0.558 0.567 0.472 0.591 0.473
Distributions from Capital Gains ......... 0.023 -- -- 0.283 0.194 0.334
-------- --------- --------- -------- --------- ----------
Total Distributions ..................... 0.577 0.558 0.567 0.755 0.785 0.807
-------- --------- --------- -------- --------- ----------
Net Asset Value, End of Period ............ $ 11.80 $ 11.39 $ 11.47 $ 11.30 $ 12.27 $ 11.18
======== ========= ========= ======== ========= ==========
Total Return(1) ........................... 8.85% 4.20% 6.82% (1.81%) 17.31% 8.57%
Ratios/Supplemental Data Net Assets,
End of Period (000 omitted) ............ $ 83,208 $ 96,102 $104,168 $103,113 $ 120,809 $ 48,420
Ratio of Expenses to Average Net Assets#.. 0.90% 0.90% 0.85% 0.76% 0.75% 0.75%
Ratio of Net Investment Income to
Average# ................................. 4.77% 4.76% 5.11% 4.89% 4.86% 5.74%
Net Assets Ratio of Expenses without
waivers and assumption of expenses to
Average Net Assets# ..................... 1.18% 1.27% 1.37% 1.25% 1.11% 1.41%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ..................... 4.49% 4.39% 4.59% 4.40% 4.50% 5.08%
Portfolio Turnover Rate .................. 107% 156% 122% 162% 150% 280%
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Class A Class B
- ----------------------------------------------------------------- --------------------------------------------------
Year ended Year ended
- --------------------------------------------------- 9/4/87* ------------------------------------ 11/4/93**
to through
10/31/91 10/31/90 10/31/89 10/31/88 10/31/87 8/31/97 8/31/96 8/31/95 8/31/94
- -------- -------- -------- -------- -------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 10.48 $ 10.60 $ 10.62 $ 10.08 $ 10.00 $ 11.33 $ 11.41 $ 11.27 $ 12.11
--------- -------- --------- --------- --------- -------- -------- -------- --------
0.635 0.671 0.739 0.701 0.053 0.465 0.469 0.485 0.419
0.762 (0.100) 0.045 0.590 0.027 0.430 (0.086) 0.162 (0.543)
--------- -------- ---------- --------- --------- -------- --------- --------- --------
1.40 0.571 0.784 1.291 0.080 0.895 0.383 0.647 (0.124)
0.635 0.672 0.741 0.751 0.000 0.442 0.463 0.507 0.433
0.000 0.020 0.063 0.000 0.000 0.023 -- -- 0.283
--------- --------- ---------- --------- --------- -------- --------- --------- --------
0.635 0.692 0.804 0.751 0.000 0.465 0.463 0.507 0.716
--------- --------- ---------- --------- --------- -------- --------- --------- --------
$ 11.25 $ 10.48 $ 10.60 $ 10.62 $ 10.08 $ 11.76 $ 11.33 $ 11.41 $ 11.27
========= ========= ========== ========= ========= ======== ========= ========= ========
13.68% 5.56% 7.69% 13.24% 5.41% 8.03% 3.46% 5.99% (1.11%)
$ 24,062 $ 20,413 $ 17,545 $ 5,557 $ 101 $ 13,501 $ 13,657 $ 10,633 $ 7,234
0.76% 0.71% 0.20% 0.00% 0.00% 1.64% 1.65% 1.61% 1.51%
5.85% 6.34% 6.90% 7.16% 7.49% 4.03% 4.01% 4.35% 4.28%
1.71% 1.68% 2.30% 1.50% 1.50% 1.68% 1.76% 1.87% 1.76%
4.90% 5.38% 4.81% 5.66% 5.99% 3.99% 3.90% 4.09% 4.03%
353% 143% 286% 362% 90% 107% 156% 122% 162%
</TABLE>

* Commencement of operations.
** Commencement of offering shares.
+ In 1994 the New York Tax Free Income Fund changed its fiscal year-end from
October 31 to August 31.
(1) Total return figures are calculated before taking into account effect of
4.50% sales charge.
# Short periods have been annualized.

7
<PAGE>

FUND OBJECTIVES
- ---------------
Vista New York Tax Free Income Fund seeks to provide monthly dividends which
are excluded from gross income for federal tax purposes and exempt from New
York State and New York City personal income taxes, as well as to protect the
value of its shareholders' investment. The Fund is not intended to be a
complete investment program, and there is no assurance it will achieve its
objective.

INVESTMENT POLICIES

INVESTMENT APPROACH
The Fund invests primarily in New York Municipal Obligations (as defined under
"Municipal Obligations"). As a fundamental policy, under normal market
conditions, the Fund will have at least 80% of its assets in New York Municipal
Obligations the interest on which, in the opinion of bond counsel, does not
constitute a preference item which would be subject to the federal alternative
minimum tax on individuals (these preference items are referred to as "AMT
Items"). The Fund reserves the right under normal market conditions to invest
up to 20% of its total assets in AMT Items or securities the interest on which
is subject to federal income tax and New York State and New York City personal
income taxes. For temporary defensive purposes, the Fund may exceed this
limitation.

The Fund's investments may include, among other instruments, fixed, variable or
floating rate general obligation and revenue bonds, zero coupon securities,
inverse floaters and bonds with interest rate caps. The Fund's Municipal
Obligations will be rated at least in the category Baa, MIG-3 or VMIG-3 by
Moody's Investors Service, Inc. ("Moody's"), or BBB or SP-2 by Standard &
Poor's Corporation ("S&P") or BBB or FIN-3 by Fitch Investors Service, Inc.
("Fitch") or comparably rated by another national rating organization, or, if
unrated, considered by the Fund's advisers to be of comparable quality.

8
<PAGE>

WHO MAY WANT TO INVEST
The Fund may be most appropriate for investors who...
[bullet] Are seeking monthly income that is exempt from federal, state and New
York City income tax
[bullet] Are investing for mid- to long-term investment goals
[bullet] Own or plan to own other types of investments for diversification
purposes
[bullet] Can assume bond market (i.e., interest rate) risk

The Fund may NOT be appropriate for investors who are unable to tolerate any up
and down price changes, are investing for shorter-term goals or who are in need
of higher growth potential.

MUNICIPAL OBLIGATIONS
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, and their authorities,
agencies, instrumentalities and political subdivisions, the interest on which,
in the opinion of bond counsel, is excluded from gross income for federal
income tax purposes (without regard to whether the interest thereon is also
exempt from the personal income taxes of any state or whether the interest
thereon constitutes a preference item for purposes of the federal alternative
minimum tax). "New York Municipal Obligations" are Municipal Obligations of the
State of New York and its political subdivisions and of Puerto Rico, other U.S.
territories and their political subdivisions, the interest on which, in the
opinion of bond counsel, is exempt from New York State and New York City
personal income taxes. Municipal Obligations are issued to obtain funds for
various public purposes, such as the construction of public facilities, the
payment of general operating expenses or the refunding of outstanding debts.
They may also be issued to finance various private activities, including the
lending of funds to public or private institutions for the construction of
housing, educational or medical facilities, and may include certain types of
industrial development bonds, private activity bonds or notes issued by public
authorities to finance privately owned or operated facilities, or to fund
short-term cash requirements. Short-term Municipal Obligations may be issued as
interim financing in anticipation of tax collections, revenue receipts or bond
sales to finance various public purposes.

9
<PAGE>

revenue obligation securities, the credit quality of which is directly related
to the private user of the facilities.

MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. Certain investments in
municipal lease obligations may be illiquid.

MONEY MARKET INSTRUMENTS.

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

10
<PAGE>

Fund if the other party should default on its obligation and the Fund is
delayed or prevented from recovering the collateral or completing the
transaction.

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

11
<PAGE>

pay a "tender fee" to a third party. Demand features provided by foreign banks
involve certain risks associated with foreign investments. The Internal Revenue
Service has not ruled on whether interest on participations in floating or
variable rate municipal obligations is tax exempt, and the Fund would purchase
such instruments based on opinions of bond counsel.

12
<PAGE>

Derivatives transactions not involving hedging may have speculative
characteristics, involve leverage and result in losses that may exceed the
original investment of the Fund. There can be no assurance that a liquid market
will exist at a time when the Fund seeks to close out a derivatives position.
Activities of large traders in the futures and securities markets involving
arbitrage, "program trading," and other investment strategies may cause price
distortions in derivatives markets. In certain instances, particularly those
involving over-the-counter transactions or forward contracts, there is a
greater potential that a counterparty or broker may default. In the event of a
default, the Fund may experience a loss. For additional information concerning
derivatives, related instruments and the associated risks, see the SAI.

Because the Fund will invest primarily in obligations issued by the State of
New York and its cities, public authorities and other municipal issuers, the
Fund is susceptible to factors affecting the State of New York and its
municipal issuers. The State of New York and New York City have a recent
history of significant financial and fiscal difficulties. If

13
<PAGE>

the State of New York or any of its local government entities is unable to meet
its financial obligations, the income derived by the Fund and the Fund's
ability to preserve capital and liquidity could be adversely affected. See the
SAI for further information.

14
<PAGE>

the Fund to be more susceptible to similar economic, political, or regulatory
developments, particularly in light of the fact that the issuers in which the
Fund invests will generally be located in the State of New York.

MANAGEMENT
- ----------
THE FUND'S ADVISERS

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
Fund's sub-investment adviser under a Sub-Investment Advisory Agreement between
CAM and Chase. CAM is a wholly-owned operating subsidiary Chase. CAM makes
investment decisions for the Fund on a day-to-day basis. For these services,
CAM is entitled to receive a fee, payable by Chase from its advisory fee, at an
annual rate equal to 0.15% of the Fund's average daily net assets. CAM provides
discretionary investment advisory services to institutional clients. The same
individuals who serve as portfolio managers for Chase also serve as portfolio
managers for CAM. CAM is located at 1211 Avenue of the Americas, New York, New
York 10036.

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

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

Class B shares automatically convert into Class A shares, based on relative net
asset value, at the beginning of the

15
<PAGE>

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

WHICH ARRANGEMENT IS
BEST FOR YOU? The decision as to which class of shares provides a more
suitable investment for an investor depends on a number of factors, including
the amount and intended length of the investment. If you are making an
investment that qualifies for reduced sales charges, you might consider Class A
shares. If you who prefer not to pay an initial sales charge and anticipate
holding your shares for a number of years, you might consider Class B shares.
In almost all cases, if you are planning to purchase $250,000 or more of the
Fund's shares, you will pay lower aggregate charges and expenses by purchasing
Class A shares.

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

You can open a Fund account with as little as $2,500 for regular accounts,
$1,000 for traditional and Roth IRAs, SEP-IRAs and the Systematic Investment
Plan, or $500 for Education IRAs. Additional investments may be made at any
time with as little as $100. You can buy Fund shares three ways--through an
investment representative, through the Fund's distributor by calling the Vista
Service Center, or through the Systematic Investment Plan.

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

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

16
<PAGE>

1-800-34-VISTA for complete instructions.

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

<TABLE>
<CAPTION>
Sales charge as a
percentage of:
--------------------- Amount of sales charge
Amount of transaction at Offering Net amount reallowed to dealers as a
offering price Price invested percentage of offering price
- ---------------------------- -------- ------------ ----------------------------
<S> <C> <C> <C>
Under 100,000 4.50 4.71 4.00
100,000 but under 250,000 3.75 3.90 3.25
250,000 but under 500,000 2.50 2.56 2.25
500,000 but under 1,000,000 2.00 2.04 1.75
</TABLE>

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

17
<PAGE>

Class B Shares

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

GENERAL

You may be eligible to buy Class A shares at reduced sales charges. Consult
your investment representative or the Vista Service Center for details about
Vista's combined purchase privilege, cumulative quantity discount, statement of
intention, group sales plan, employee benefit plans, and other plans.
Descriptions are also included in the enclosed application and in the SAI. For
purchases of the Fund's Class A shares made from January 1, 1998 through
December 31, 1998, no initial sales charge will be assessed if you are using
redemption proceeds received within the prior ninety days from non-Vista mutual
funds to buy your shares and are opening or adding to Vista prototype IRA with
a transfer of assets or rollover from a qualified plan. If you use such
redemption proceeds to open or add to a Vista prototype IRA, the Fund's
distributor will pay broker-dealers commissions on the net sales of Class A
shares at the rate of 1%. In addition, sales charges are waived if you are
using redemption proceeds received within the prior ninety days from non-Vista
mutual funds to buy your shares, and on which you paid a front-end or
contingent deferred sales charge.

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

The Fund may sell Class A shares at net asset value without an initial sales
charge to the current and retired Trustees (and their immediate families),
current and

18
<PAGE>

retired employees (and their immediate families) of Chase, the Fund's
distributor and transfer agent or any affiliates or subsidiaries thereof,
registered representatives and other employees (and their immediate families)
of broker-dealers having selected dealer agreements with the Fund's
distributor, employees (and their immediate families) of financial institutions
having selected dealer agreements with the Fund's distributor (or otherwise
having an arrangement with a broker-dealer or financial institution with
respect to sales of Vista Fund shares), financial institution trust departments
investing an aggregate of $1 million or more in the Vista Family of Funds and
clients of certain administrators of tax-qualified plans when proceeds from
repayments of loans to participants are invested (or reinvested) in the Vista
Family of Funds.

For purchases of the Fund's Class A shares made from January 1, 1998 through
December 31, 1998, no initial sales charge will be assessed if you are
investing the proceeds of an IRA for which The Chase Manhattan Bank or its
designee serves as trustee or custodian. No initial sales charge will apply to
the purchase of the Fund's Class A shares if you are investing the proceeds of
a qualified retirement plan where a portion of the plan was invested in the
Vista Family of Funds, any qualified retirement plan with 50 or more
participants, or an individual participant in a tax-qualified plan making a
tax-free rollover or transfer of assets from the plan in which Chase or an
affiliate serves as trustee or custodian of the plan or manages some portion of
the plan's assets.

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

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

Shareholders of record of any Vista fund as of November 30, 1990 and certain
immediate family members may purchase the Fund's Class A shares with no initial
sales charge for as long as they continue to own

19
<PAGE>

Class A shares of any Vista fund, provided there is no change in account
registration.

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

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

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

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

If you want your redemption proceeds sent to an address other than your address
as it appears on

20
<PAGE>

Vista's records, a signature guarantee is required. The Fund may require
additional documentation for the sale of shares by a corporation, partnership,
agent or fiduciary, or a surviving joint owner. Contact the Vista Service
Center for details.

TELEPHONE REDEMPTIONS.
You may use Vista's Telephone Redemption Privilege to redeem shares from your
account unless you have notified the Vista Service Center of an address change
within the preceding 30 days. Telephone redemption requests in excess of
$25,000 will only be made by wire to a bank account on record with the Fund.
There is a $10.00 charge for each wire transaction. Unless an investor
indicates otherwise on the account application, the Fund will be authorized to
act upon redemption and transfer instructions received by telephone from a
shareholder, or any person claiming to act as his or her representative, who
can provide the Fund with his or her account registration and address as it
appears on the Fund's records.

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

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

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

21
<PAGE>

representative will be responsible for furnishing all necessary documentation
to the Vista Service Center, and may charge you for its services.

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

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other
Vista funds at net asset value beginning 15 days after purchase. Not all Vista
funds offer all classes of shares. The prospectus of the other Vista fund into
which shares are being exchanged should be read carefully and retained for
future reference. If you exchange shares subject to a CDSC, the transaction
will not be subject to the CDSC. However, when you redeem the shares acquired
through the exchange, the redemption may be subject to the CDSC, depending upon
when you originally purchased the shares. The CDSC will be computed using the
schedule of any fund into or from which you have exchanged your shares that
would result in your paying the highest CDSC applicable to your class of
shares. In computing the CDSC, the length of time you have owned your shares
will be measured from the date of original purchase and will not be affected by
any exchange.

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

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

22
<PAGE>

to limit excessive exchange activity and in other circumstances where Vista
management or the Trustees believe doing so would be in the best interests of
the Fund, the Fund reserves the right to revise or terminate the exchange
privilege, limit the amount or number of exchanges or reject any exchange. In
addition, any shareholder who makes more than ten exchanges of shares involving
the Fund in a year or three in a calendar quarter will be charged a $5.00
administration fee for each such exchange. Shareholders would be notified of
any such action to the extent required by law. Consult the Vista Service Center
before requesting an exchange. See the SAI to find out more about the exchange
privilege.

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

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

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION
- -------------------------------------------
The Fund declares dividends daily and distributes any net investment income at
least monthly. The Fund distributes any net realized capital gains at least
annually. Distributions from capital gains are made after applying any
available capital loss carryovers. Distributions paid by the Fund with respect
to Class A shares will generally be greater than those paid with respect to
Class B shares because expenses attributable to Class B shares will generally
be higher.

DISTRIBUTION PAYMENT OPTION. You can choose fom three distribution options: (1)
reinvest all distributions in additional Fund shares without a sales charge;
(2) receive

23
<PAGE>

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

If a check representing a Fund distribution is not cashed within a specified
period, the Vista Service Center will notify you that you have the option of
requesting another check or reinvesting the distribution in the Fund or in an
established account of another Vista Fund. If the Vista Service Center does not
receive your election, the distribution will be reinvested in the Fund.
Similarly, if the Fund or the Vista Service Center sends you correspondence
returned as "undeliverable," distributions will automatically be reinvested in
the Fund.

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

TAXATION OF DISTRIBUTIONS.
Distributions by the Fund of its tax-exempt interest income will not be subject
to federal income tax, but generally will be subject to state and local taxes.
However, to the extent paid out interest on New York Municipal Obligations,
such distributions will also be exempt from New York State and New York City
personal income taxes for a New York individual resident shareholder.

All other Fund distributions of net investment income will be taxable as
ordinary income. Any distributions of net capital gain which are designated as
"capital gain dividends" will be taxable as long-term capital gain, regardless
of how long you have held the shares. The taxation of your distributions is the
same whether received in cash or in shares through the reinvestment of
distributions.

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

24
<PAGE>

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

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLANS

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

25
<PAGE>

SHAREHOLDER SERVICING AGENTS

The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase) under which the shareholder
servicing agents have agreed to provide certain support services to their
customers who beneficially own Class A or Class B shares of the Fund. These
services include one or more of the following: assisting with purchase and
redemption transactions, maintaining shareholder accounts and records,
furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to .25% of the average daily net assets of Class A and Class B shares
of the Fund held by investors for whom the shareholder servicing agent
maintains a servicing relationship. Shareholder servicing agents may
subcontract with other parties for the provision of shareholder support
services.

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

ADMINISTRATOR
AND SUB-ADMINISTRATOR
Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and

26
<PAGE>

paid monthly at an annual rate equal to 0.10% of the Fund's average daily net
assets.

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

27
<PAGE>

Trust shall not be voted. Shares of each class of the Fund generally vote
together except when required under federal securities laws to vote separately
on matters that only affect a particular class, such as the approval of
distribution plans for a particular class.

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

UNIQUE CHARACTERISTICS OF MASTER/FEEDER FUND STRUCTURE
- ------------------------------------------------------
Unlike other mutual funds which directly acquire and manage their own portfolio
securities, the Fund is permitted to invest all of its investable assets in a
separate registered investment company (a "Portfolio"). In that event, a
shareholder's interest in the Fund's underlying investment securities would be
indirect. In addition to selling a beneficial interest to the Fund, a Portfolio
could also sell beneficial interests to other mutual funds or institutional
investors. Such investors would invest in such Portfolio on the same terms and
conditions and would pay a proportionate share of such Portfolio's expenses.
However, other investors in a Portfolio would not be required to sell their
shares at the same public offering price as the Fund, and might bear different
levels of ongoing expenses than the Fund. Shareholders of the

28
<PAGE>

Fund should be aware that these differences may result in differences in
returns experienced in the different funds that invest in a Portfolio. Such
differences in return are also present in other mutual fund structures.

29
<PAGE>

SAI. "Yield" for each class of shares is calculated by dividing the annualized
net investment income per share during a recent 30-day period by the maximum
public offering price per share of such class on the last day of that period.
"Effective yield" is the "yield" calculated assuming the reinvestment of income
earned, and will be slightly higher than the "yield" due to the compounding
effect of this assumed reinvestment. "Tax equivalent yield "is the yield that a
taxable fund would have to generate in order to produce an after-tax yield
equivalent to the Fund's yield. The tax equivalent yield of the Fund can then
be compared to the yield of a taxable Fund. Tax equivalent yields can be quoted
on either a "yield" or "effective yield" basis.

"Total return" for the one-, five- and ten-year periods (or since inception, if
shorter) through the most recent calendar quarter represents the average annual
compounded rate of return on an investment of $1,000 in the Fund invested at
the maximum public offering price (in the case of Class A shares) or reflecting
the deduction of any applicable contingent deferred sales charge (in the case
of Class B shares). Total return reflects the deduction of the maximum initial
sales charge in the case of Class A shares, but does not reflect the deduction
of any contingent deferred sales charge in the case of Class B shares. Total
return may also be presented for other periods or based on investment at
reduced sales charge levels. Any quotation of investment performance not
reflecting the maximum initial sales charge or contingent deferred sales charge
would be reduced if such sales charges were used.

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

30
<PAGE>

MAKE THE MOST OF YOUR VISTA PRIVILEGES
--------------------------------------
The following services are available to you as a Vista mutual fund shareholder.

[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B accounts) monthly, quarterly or
semiannually. A minimum account balance of $5,000 is required to
establish a systematic withdrawal plan for Class A accounts.

[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Vista
account to another on a regular, prearranged basis. There is no
additional charge for this service.

Investors may not maintain, within the same fund, simultaneous plans
for systematic investment or exchange and systematic withdrawal or
exchange.

[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time
privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar
days of the redemption, accompanied by payment for the shares (not in
excess of the redemption).

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

<PAGE>

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

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

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

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

[CHASE VISTA LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VNYT-1-1297

<PAGE>

PROSPECTUS
VISTA(SM) TAX FREE INCOME FUND

CLASS A AND B SHARES

INVESTMENT STRATEGY: INCOME

December 29, 1997

<PAGE>

2
<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 4
The expenses you might pay on your Fund investment, including examples
Financial Highlights ...................................................... 6
How the Fund has performed
Fund Objectives ............................................................ 8
Investment Policies ......................................................... 8
The kinds of securities in which the Fund invests, investment policies and
techniques, and risk
Management .................................................................. 15
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management,
the Fund's sub-adviser, and the individuals who manage the Fund
About Your Investment ...................................................... 15
Alternative sales arrangements
How to Buy, Sell and Exchange Shares ....................................... 16
How the Fund Values Its Shares ............................................. 23
How Distributions Are Made; Tax Information ................................. 23
How the Fund distributes its earnings, and tax treatment related
to those earnings
Other Information Concerning the Fund ....................................... 25
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 29
How performance is determined, stated and/or advertised
Make the Most of Your Vista Privileges .................................... 31

3
<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Fund and is, except as
described below, based on expenses incurred in the most recent fiscal year. The
examples show the cumulative expenses attributable to a hypothetical $1,000
investment over specified periods.

<TABLE>
<CAPTION>
Class A Class B
Shares Shares
--------- ---------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None
Maximum Deferred Sales Charge (as a percentage of the lower of
original purchase price or redemption proceeds)* ......... None 5.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver)** ......... 0.14%# 0.14%#
12b-1 Fee*** (after estimated waiver, where indicated) ...... 0.00%**# 0.75%
Shareholder Servicing Fee
(after estimated waiver, where indicated) .................. 0.11%**# 0.25%
Other Expenses ............................................. 0.50%# 0.50%#
--------- ---------
Total Fund Operating Expenses (after waiver of fee)** ...... 0.75%# 1.64%
========= =========
</TABLE>

<TABLE>
<CAPTION>
EXAMPLES
Your investment of $1,000 would incur the
following expenses, assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- -------- -------- --------
<S> <C> <C> <C> <C>
Class A Shares+ .............................. $52 $68 $ 85 $134
Class B Shares:
Assuming complete redemption at the
end of the period++ +++ .................. $67 $82 $109 $175
Assuming no redemptions+++ .................. $17 $52 $ 89 $175
</TABLE>

** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Investment Advisory Fee would be 0.30% for Class A and
Class B shares, the 12b-1 Fee and Shareholder Servicing Fee would be
0.25% for Class A shares, and Total Fund Operating Expenses would be
1.30% and 1.80% for Class A and Class B shares, respectively.

# Restated from most recent fiscal year to reflect current waiver
arrangements.

4
<PAGE>

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

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

+++ Ten-year figures assume conversion of Class B shares to Class A shares
at the beginning of the ninth year after purchase. See "How to Buy, Sell
and Exchange Shares".

5
<PAGE>

FINANCIAL HIGHLIGHTS

VISTA TAX FREE INCOME FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Class A
--------------------------------------------------------
Year Year Year 11/1/93 Year
ended Ended ended through ended
8/31/97 8/31/96 8/31/95 8/31/94+ 10/31/93
------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 11.84 $ 11.85 $ 11.70 $ 12.70 $ 11.52
---------- --------- ---------- --------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.579 0.580 0.585 0.475 0.662
Net Gains or Losses in Securities
(both realized and unrealized) ............... 0.484 (0.007) 0.147 (0.847) 1.412
---------- --------- ---------- --------- ---------
Total from Investment Operations ............... 1.063 0.573 0.732 (0.372) 2.074
---------- --------- ---------- --------- ---------
Less Distributions:
Dividends from net investment income ......... 0.583 0.583 0.582 0.475 0.662
Distributions from capital gains ............... -- -- -- 0.153 0.237
---------- --------- ---------- --------- ---------
Total Distributions ........................... 0.583 0.583 0.582 0.628 0.899
---------- --------- ---------- --------- ---------
Net Asset Value, End of Period .................. $ 12.32 $ 11.84 $ 11.85 $ 11.70 $ 12.70
========== ========= ========== ========= =========
Total Return(1) ................................. 9.14% 4.88% 6.53% (2.99%) 18.72%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ......... $ 62,729 $ 70,480 $ 88,783 $98,054 $ 83,672
Ratio of Expenses to Average Net Assets# ......... 0.90% 0.90% 0.85% 0.58% 0.23%
Ratio of Net Income to Average Net Assets# ...... 4.78% 4.83% 5.07% 4.75% 5.25%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ........................... 1.29% 1.46% 1.47% 1.29% 1.20%
Ratio of Net Investments Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 4.39% 4.27% 4.45% 4.04% 4.28%
Portfolio Turnover Rate ........................... 147% 210% 233% 258% 149%

<CAPTION>
Year
ended
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 11.12 $ 10.43 $ 10.58 $ 10.63 $ 10.08
--------- --------- -------- --------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.731 0.727 0.723 0.756 0.738
Net Gains or Losses in Securities
(both realized and unrealized) ............... 0.556 0.693 ( 0.094) 0.006 0.603
--------- ---------- --------- ---------- ----------
Total from Investment Operations ............... 1.287 1.420 0.629 0.762 1.341
--------- ---------- --------- ---------- ----------
Less Distributions:
Dividends from net investment income ......... 0.731 0.726 0.726 0.759 0.791
Distributions from capital gains ............... 0.156 -- 0.055 0.053 --
--------- ---------- --------- ---------- ----------
Total Distributions ........................... 0.887 0.726 0.781 0.812 0.791
--------- ---------- --------- ---------- ----------
Net Asset Value, End of Period .................. $ 11.52 $ 11.12 $ 10.43 $ 10.58 $ 10.63
========= ========== ========= ========== ==========
Total Return(1) ................................. 11.99% 13.98 % 6.18 % 7.48 % 13.83 %
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ......... $ 17,548 $ 5,425 $ 3,973 $ 3,196 $ 1,197
Ratio of Expenses to Average Net Assets# ......... 0.00% 0.04 % 0.12 % 0.00 % 0.00 %
Ratio of Net Income to Average Net Assets# ...... 6.26% 6.71 % 6.86 % 7.06 % 7.50 %
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ........................... 2.34% 4.04 % 2.50 % 2.50 % 2.00 %
Ratio of Net Investments Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 3.92% 2.71 % 4.48 % 4.56 % 5.50 %
Portfolio Turnover Rate ........................... 266% 211% 89% 257% 422%

<CAPTION>
Class B
-------------------------------------------------
9/4/87* Year Year Year 11/4/93**
to ended ended ended through
10/31/87 8/31/97 8/31/96 8/31/95 8/31/94
-------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............ $ 10.00 $ 11.76 $ 11.77 $ 11.65 $ 12.51
--------- ---------- --------- ---------- ---------
Income from Investment Operations:
Net Investment Income ........................ 0.059 0.484 0.486 0.498 0.423
Net Gains or Losses in Securities
(both realized and unrealized) ............... 0.021 0.478 (0.006) 0.140 (0.707)
---------- ---------- --------- ---------- ---------
Total from Investment Operations ............... 0.080 0.962 0.480 0.638 (0.284)
---------- ---------- --------- ---------- ---------
Less Distributions:
Dividends from net investment income ......... -- 0.472 0.490 0.518 0.423
Distributions from capital gains ............... -- -- -- -- 0.153
---------- ---------- --------- ---------- ---------
Total Distributions ........................... -- 0.472 0.490 0.518 0.576
---------- ---------- --------- ---------- ---------
Net Asset Value, End of Period .................. $ 10.08 $ 12.25 $ 11.76 $ 11.77 $ 11.65
========== ========== ========= ========== =========
Total Return(1) ................................. 5.41 % 8.30% 4.10% 5.70% (2.35%)
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ......... $ 101 $ 13,610 $ 14,329 $ 14,265 $ 11,652
Ratio of Expenses to Average Net Assets# ......... 0.00 % 1.64% 1.65% 1.61% 1.47%
Ratio of Net Income to Average Net Assets# ...... 7.35 % 4.04% 4.08% 4.31% 3.95%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ........................... 2.00 % 1.79% 1.95% 1.97% 1.81%
Ratio of Net Investments Income without
waivers and assumption of expenses to
Average Net Assets# ........................... 5.35 % 3.89% 3.78% 3.95% 3.61%
Portfolio Turnover Rate ........................... 94% 147% 210% 233% 258%
</TABLE>

* Commencement of operations.

** Commencement of offering shares.

+ In 1994 the Tax Free Income Fund changed ifs fiscal year-end from
October 31 to August 31.

(1) Total returns are calculated before taking into account effect of 4.50%
sales charge.
# Short periods have been annualized.

<PAGE>

INVESTMENT POLICIES
- -------------------
INVESTMENT APPROACH
The Fund invests primarily in Municipal Obligations (as defined under
"Municipal Obligations"). As a fundamental policy, under normal market
conditions, the Fund will have at least 80% of its assets in Municipal
Obligations the interest on which, in the opinion of bond counsel, is excluded
from gross income for federal income tax purposes and does not constitute a
preference item which would be subject to the federal alternative minimum tax
on individuals (these preference items are referred to as "AMT Items"). The
Fund reserves the right under normal market conditions to invest up to 20% of
its total assets in AMT Items or securities the interest on which is subject to
federal income tax. For temporary defensive purposes, the Fund may exceed this
limitation.

The Fund's investments may include, among other instruments, fixed, variable or
floating rate general obligation and revenue bonds, zero coupon securities,
inverse floaters and bonds with interest rate caps. The Fund's Municipal
Obligations will be rated at time of purchase at least in the category Baa,
MIG-3 or VMIG-3 by Moody's Investors Service, Inc. ("Moody's"), or BBB or SP-2
by Standard & Poor's Corporation ("S&P"), or BBB or FIN-3 by Fitch Investors
Service, Inc. ("Fitch") or comparably rated by another national rating
organization, or, if unrated, considered by the Fund's advisers to be of
comparable quality.

8
<PAGE>

WHO MAY WANT TO INVEST
The Fund may be most appropriate for investors who...
[bullet] Are seeking monthly tax-free income exempt from federal income tax
[bullet] Are investing for mid- to long-term investment goals
[bullet] Own or plan to own other types of investments for diversification
purposes
[bullet] Can assume bond market (i.e., interest rate) risk

The Fund may NOT be appropriate for investors who are unable to tolerate any up
and down price changes, are investing for shorter-term goals or who are in need
of higher growth potential.

MUNICIPAL OBLIGATIONS
"Municipal Obligations" are obligations issued by or on behalf of states,
territories and possessions of the United States, and their authorities,
agencies, instrumentalities and political subdivisions, the interest on which,
in the opinion of bond counsel, is excluded from gross income for federal
income tax purposes (without regard to whether the interest thereon is also
exempt from the personal income taxes of any state or whether the interest
thereon constitutes a preference item for purposes of the federal alternative
minimum tax). These securities are issued to obtain funds for various public
purposes, such as the construction of public facilities, the payment of general
operating expenses or the refunding of outstanding debts. They may also be
issued to finance various private activities, including the lending of funds to
public or private institutions for the construction of housing, educational or
medical facilities, and may include certain types of industrial development
bonds, private activity bonds or notes issued by public authorities to finance
privately owned or operated facilities, or to fund short-term cash
requirements. Short-term Municipal Obligations may be issued as interim
financing in anticipation of tax collections, revenue receipts or bond sales to
finance various public purposes.

From time to time, the Fund may invest more than 25% of the value of its total
assets in industrial

9
<PAGE>

development bonds which, although issued by industrial development authorities,
may be backed only by the assets and revenues of the non-governmental issuers
such as hospitals or airports, provided, however, that the Fund may not invest
more than 25% of the value of its total assets in such bonds if the issuers are
in the same industry.

MUNICIPAL LEASE OBLIGATIONS. The Fund may invest in municipal lease
obligations. These are participations in a lease obligation or installment
purchase contract obligation and typically provide a premium interest rate.
Municipal lease obligations do not constitute general obligations of the
municipality. Certain municipal lease obligations in which the Fund may invest
contain "non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money
is later appropriated for such purpose. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. Certain investments in
municipal lease obligations may be illiquid.

MONEY MARKET INSTRUMENTS.

U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

10
<PAGE>

recovering the collateral or completing the transaction.

11
<PAGE>

foreign investments. The Internal Revenue Service has not ruled on whether
interest on participations in floating or variable rate municipal obligations
is tax exempt, and the Fund would purchase such instruments based on opinions
of bond counsel.

12
<PAGE>

the Fund. There can be no assurance that a liquid market will exist at a time
when the Fund seeks to close out a derivatives position. Activities of large
traders in the futures and securities markets involving arbitrage, "program
trading," and other investment strategies may cause price distortions in
derivatives markets. In certain instances, particularly those involving over-
the-counter transactions or forward contracts, there is a greater potential
that a counterparty or broker may default. In the event of a default, the Fund
may experience a loss. For additional information concerning derivatives,
related instruments and the associated risks, see the SAI.

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

13
<PAGE>

preserve capital and liquidity could be adversely affected. See the SAI for
further information.

14
<PAGE>

MANAGEMENT
- ----------
THE FUND'S ADVISERS

ABOUT YOUR INVESTMENT
- ---------------------

CHOOSING A SHARE CLASS

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

Class B shares automatically convert into Class A shares, based on relative net
asset value, at the beginning of the ninth year after purchase. For more
information about the conversion of Class B shares, see the SAI. This
discussion will include information about how shares acquired through
reinvestment of distributions are treated for conversion purposes. Class B
shares

15
<PAGE>

provide an investor the benefit of putting all of the investor's dollars to
work from the time the investment is made. Until conversion, Class B shares
will have a higher expense ratio and pay lower dividends than Class A shares
because of the higher combined 12b-1 and service fees. See "How to Buy, Sell
and Exchange Shares" and "Other Information Concerning the Fund."

WHICH ARRANGEMENT IS BEST FOR YOU? The decision as to which class of shares
provides a more suitable investment for an investor depends on a number of
factors, including the amount and intended length of the investment. If you are
making an investment that qualifies for reduced sales charges, you might
consider Class A shares. If you prefer not to pay an initial sales charge and
anticipate holding your shares for a number of years, you might consider Class
B shares. In almost all cases, if you are planning to purchase $250,000 or more
of the Fund's shares, you will pay lower aggregate charges and expenses by
purchasing Class A shares.

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

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

Shares are purchased at the public offering price, which is based on the

16
<PAGE>

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

Amount of
Sales charge as a sales charge
percentage of: reallowed to
------------------------ dealers as a
Amount of transaction at Offering Net amount percentage of
offering price ($) Price invested offering price
- ------------------ -------- ---------- --------------
<S> <C> <C> <C>
Under 100,000 4.50 4.71 4.00
100,000 but under 250,000 3.75 3.90 3.25
250,000 but under 500,000 2.50 2.56 2.25
500,000 but under 1,000,000 2.00 2.04 1.75
</TABLE>

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

17
<PAGE>

Class B Shares
--------------

Year 1 2 3 4 5 6 7 8+
- ------ ---- ---- ---- ---- ---- ---- ---- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CDSC 5% 4% 3% 3% 2% 1% 0% 0%
</TABLE>

GENERAL

You may be eligible to buy Class A shares at reduced sales charges. Consult
your investment representative or the Vista Service Center for details about
Vista's combined purchase privilege, cumulative quantity discount, statement of
intention, group sales plan, employee benefit plans, and other plans.
Descriptions are also included in the enclosed application and in the SAI. For
purchases of the Fund's Class A shares made from January 1, 1998 through
December 31, 1998, no initial sales charge will be assessed if you are using
redemption proceeds received within the prior ninety days from non-Vista mutual
funds to buy your shares and are opening or adding to a Vista prototype IRA
with a transfer of assets or rollover from a qualified plan. If you use such
redemption proceeds to open or add to a Vista prototype IRA, the Fund's
distributor will pay broker-dealers commissions on the net sales of Class A
shares at the rate of 1%. In addition, sales charges are waived if you are
using redemption proceeds received within the prior ninety days from non-Vista
mutual funds to buy your shares, and on which you paid a front-end or
contingent deferred sales charge.

The Fund may sell Class A shares at net asset value without an initial sales
charge to the current and retired Trustees (and their

18
<PAGE>

immediate families), current and retired employees (and their immediate
families) of Chase, the Fund's distributor and transfer agent or any affiliates
or subsidiaries thereof, registered representatives and other employees (and
their immediate families) of broker-dealers having selected dealer agreements
with the Fund's distributor, employees (and their immediate families) of
financial institutions having selected dealer agreements with the Fund's
distributor (or otherwise having an arrangement with a broker-dealer or
financial institution with respect to sales of Vista Fund shares), financial
institution trust departments investing an aggregate of $1 million or more in
the Vista Family of Funds and clients of certain administrators of
tax-qualified plans when proceeds from repayments of loans to participants are
invested (or reinvested) in the Vista Family of Funds.

For purchases of the Fund's Class A shares made from January 1, 1998 through
December 31, 1998, no initial sales charge will be assessed if you are
investing the proceeds of an IRA for which The Chase Manhattan Bank or its
designee serves as trustee or custodian. No initial sales charge will apply to
the purchase of the Fund's Class A shares if you are investing the proceeds of
a qualified retirement plan where a portion of the plan was invested in the
Vista Family of Funds, any qualified retirement plan with 50 or more
participants, or an individual participant in a tax-qualified plan making a
tax-free rollover or transfer of assets from the plan in which Chase or an
affiliate serves as trustee or custodian of the plan or manages some portion of
the plan's assets.

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

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

19
<PAGE>

provided there is no change in account registration.

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

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

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

If you want your redemption proceeds sent to an address other than your address
as it appears on Vista's records, a signature

20
<PAGE>

guarantee is required. The Fund may require additional documentation for the
sale of shares by a corporation, partnership, agent or fiduciary, or a
surviving joint owner. Contact the Vista Service Center for details.

TELEPHONE REDEMPTIONS. You may use Vista's Telephone Redemption Privilege to
redeem shares from your account unless you have notified the Vista Service
Center of an address change within the preceding 30 days. Telephone redemption
requests in excess of $25,000 will only be made by wire to a bank account on
record with the Fund. There is a $10.00 charge for each wire transaction.
Unless an investor indicates otherwise on the account application, the Fund
will be authorized to act upon redemption and transfer instructions received by
telephone from a shareholder, or any person claiming to act as his or her
representative, who can provide the Fund with his or her account registration
and address as it appears on the Fund's records.

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

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

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

21
<PAGE>

net asset value. Your investment representative will be responsible for
furnishing all necessary documentation to the Vista Service Center, and may
charge you for its services.

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

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

22
<PAGE>

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

HOW DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------
The Fund declares dividends daily and distributes any net investment income at
least monthly. The Fund distributes any net realized capital gains at least
annually. Distributions from capital gains are made after applying any
available capital loss carryovers. Distributions paid by the Fund with respect
to Class A shares will generally be greater than those paid with respect to
Class B shares because expenses attributable to Class B shares will generally
be higher.

23
<PAGE>

without a sales charge; or (3) receive all distributions in cash or by ACH. You
can change your distribution option by notifying the Vista Service Center in
writing. If you do not select an option when you open your account, all
distributions will be reinvested. All distributions not paid in cash or by ACH
will be reinvested in shares of the same share class. You will receive a
statement confirming reinvestment of distributions in additional Fund shares
promptly following the quarter in which the reinvestment occurs.

If a check representing a Fund distribution is not cashed within a specified
period, the Vista Service Center will notify you that you have the option of
requesting another check or reinvesting the distribution in the Fund or in an
established account of another Vista Fund. If the Vista Service Center does not
receive your election, the distribution will be reinvested in the Fund.
Similarly, if the Fund or the Vista Service Center sends you correspondence
returned as "undeliverable," distributions will automatically be reinvested in
the Fund.

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

TAXATION OF DISTRIBUTIONS.

All other Fund distributions of net investment income will be taxable as
ordinary income. Any distributions of net capital gain which are designated as
"capital gain dividends" will be taxable as long-term capital gain, regardless
of how long you have held the shares. The taxation of your distributions is the
same whether received in cash or in shares through the reinvestment of
distributions.

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

24
<PAGE>

(including possible liability for state and local taxes and, for foreign
shareholders, U.S. withholding taxes).

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLANS

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

25
<PAGE>

Fund. These services include one or more of the following: assisting with
purchase and redemption transactions, maintaining shareholder accounts and
records, furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.25% of the average daily net assets of Class A and Class B
shares of the Fund held by investors for whom the shareholder servicing agent
maintains a servicing relationship. Shareholder servicing agents may
subcontract with other parties for the provision of shareholder support
services.

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

26
<PAGE>

agreed to use a portion of this fee to pay for certain expenses incurred in
connection with organizing new series of the Trust and certain other ongoing
expenses of the Trust. VFD is located at One Chase Manhattan Plaza, Third
Floor, New York, New York 10081.

CUSTODIAN

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

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

ORGANIZATION AND
DESCRIPTION OF SHARES

The Fund issues multiple classes of shares. This Prospectus relates to Class A
and Class B shares of the Fund. The Fund may offer other classes of shares in
addition to these

27
<PAGE>

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

UNIQUE CHARACTERISTICS OF MASTER/FEEDER
FUND STRUCTURE
- --------------
Unlike other mutual funds which directly acquire and manage their own portfolio
securities, the Fund is permitted to invest all of its investable assets in a
separate registered investment company (a "Portfolio"). In that event, a
shareholder's interest in the Fund's underlying investment securities would be
indirect. In addition to selling a beneficial interest to the Fund, a Portfolio
could also sell beneficial interests to other mutual funds or institutional
investors. Such investors would invest in such Portfolio on the same terms and
conditions and would pay a proportionate share of such Portfolio's expenses.
However, other investors in a Portfolio would not be required to sell their
shares at the same public offering price as the Fund, and might bear different
levels of ongoing expenses than the Fund. Shareholders of the Fund should be
aware that these differences may result in differences in returns experienced
in the different funds that invest in a Portfolio. Such differences in return
are also present in other mutual fund structures.

28
<PAGE>

higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio could become less diverse, resulting in increased
portfolio risk. However, this possibility also exists for traditionally
structured funds which have large or institutional investors. Funds with a
greater pro rata ownership in a Portfolio could have effective voting control
of such Portfolio. Under this master/feeder investment approach, whenever the
Trust was requested to vote on matters pertaining to a Portfolio, the Trust
would hold a meeting of shareholders of the Fund and would cast all of its
votes in the same proportion as did the Fund's shareholders. Shares of the Fund
for which no voting instructions had been received would be voted in the same
proportion as those shares for which voting instructions had been received.
Certain changes in a Portfolio's objective, policies or restrictions might
require the Trust to withdraw the Fund's interest in such Portfolio. Any such
withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution from such Portfolio). The Fund could incur
brokerage fees or other transaction costs in converting such securities to
cash. In addition, a distribution in kind could result in a less diversified
portfolio of investments or adversely affect the liquidity of the Fund.

PERFORMANCE INFORMATION
- -----------------------
The Fund's investment performance may from time to time be included in
advertisements about the Fund. Performance is calculated separately for each
class of shares, in the manner described in the SAI. "Yield" for each class of
shares is calculated by dividing the annualized net investment income per share
during a recent 30-day period by the maximum public offering price per share of
such class on the last day of that period. "Effective yield" is the "yield"
calculated assuming the reinvestment of income earned, and will be slightly
higher than the "yield" due to the compounding effect of this assumed
reinvestment. "Tax equivalent yield" is the yield that a taxable fund would
have to generate in order to produce an after-tax yield equivalent to the
Fund's yield. The tax equivalent yield

29
<PAGE>

of the Fund can then be compared to the yield of a taxable fund. Tax equivalent
yields can be quoted on either a "yield" or "effective yield" basis.

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

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

30
<PAGE>

MAKE THE MOST OF YOUR VISTA PRIVILEGES
--------------------------------------
The following services are available to you as a Vista mutual fund shareholder.

[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Vista
account to another on a regular, prearranged basis. There is no
additional charge for this service.

[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Vista funds in the
same class of shares without charge. The exchange privilege allows you
to adjust your investments as your objectives change. Investors may
not maintain, within the same fund, simultaneous plans for systematic
investment or exchange and systematic withdrawal or exchange.

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

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

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

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

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

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

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

VTFI-1-1297

<PAGE>

[CHASE VISTA LOGO]

PROSPECTUS
VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
VISTA(SM) SHARES

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Fund in its December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call 1-800-621-7227. The SAI has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by reference.

INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

<PAGE>

TABLE OF CONTENTS

Expense Summary ............................................................ 3
The expenses you pay on your Fund investment, including examples
Financial Highlights ...................................................... 5
The Fund's financial history
Fund Objective and Investment Approach .................................... 6
Investment Policies ......................................................... 6
Management .................................................................. 9
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management,
the Fund's sub-adviser
How to Buy, Sell and Exchange Shares ....................................... 9
Exchange Feature ............................................................ 13
How the Fund Values its Shares ............................................. 14
How Dividends and Distributions Are Made; Tax Information .................. 15
How the Fund distributes its earnings, and tax treatment
related to those earnings
Other Information Concerning the Fund ....................................... 15
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ................................................... 19
How performance is determined, stated and/or advertised

2
<PAGE>

EXPENSE SUMMARY

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

<TABLE>
<CAPTION>
Vista
Shares
----
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee .......................................... 0.10%
12b-1 Fee * ...................................................... 0.10%
Shareholder Servicing Fee (after estimated waiver of fee)** ...... 0.23%
Other Expenses ................................................... 0.16%
Total Fund Operating Expenses (after waivers of fees)** ......... 0.59%
</TABLE>

EXAMPLE
Your investmen of $1,000 would incur the following expenses, assuming 5%
annual return:

1 year ..................... $ 6
3 years ..................... 19
5 years ..................... 33
10 years ..................... 74

* Long-term shareholders in mutual funds with 12b-1 fees, such as holders of
Vista Shares of the Fund, may pay more than the economic equivalent of the
maximum front-end sales charge permitted by rules of the National
Association of Securities Dealers, Inc.
** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such waiver,
the Shareholder Servicing Fee would be 0.35%, and Total Fund Operating
Expenses would be 0.71%. Chase has agreed to waive fees payable to it
and/or reimburse expenses for a two year period commencing on May 6, 1996
to the extent necessary to prevent Total Fund Operating Expenses for Vista
Shares of the Fund from exceeding 0.76% of average net assets during such
period.

3
<PAGE>

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

4
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, 1177 Avenue of the Americas, New York, N.Y. 10036,
whose report thereon is included in the Annual Report to Shareholders.

<TABLE>
<CAPTION>
Year Year Year 11/1/93 1/1/93*
ended ended ended through through
8/31/97 8/31/96 8/31/95 8/31/94** 10/31/93
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- -------- -------- --------
Income from Investment Operations:
Net Investment Income .................. 0.049 0.049 0.049 0.025 0.019
---------- ---------- -------- -------- --------
Less Distributions:
Dividends from Net Investment
Income ................................. 0.049 0.049 0.049 0.025 0.019
---------- ---------- -------- -------- --------
Net Asset Value, End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ======== ======== ========
Total Return .............................. 5.04% 4.97% 5.05% 2.48% 2.02%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) . $2,139,368 $2,057,023 $341,336 $335,365 $323,498
Ratio of Expenses to Average Net Assets# 0.59% 0.65% 0.80% 0.80% 0.82%
Ratio of Net Investment Income to
Average Net Assets# ..................... 4.93% 4.83% 4.93% 2.94% 2.39%
Ratio of Expenses without waivers and
assumption of expenses to
Average Net Assets# ..................... 0.72% 0.73% 0.80% 0.80% 0.82%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ..................... 4.80% 4.75% 4.93% 2.94% 2.39%
</TABLE>

* Commencement of offering shares.
** In 1994 the Fund changed its fiscal year-end from October 31 to
August 31.
# Short periods have been annualized.

5
<PAGE>

FUND OBJECTIVE AND
INVESTMENT APPROACH
- -------------------
The Fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and maintenance of liquidity.

INVESTMENT POLICIES
- -------------------
As a matter of fundamental policy, the Fund is authorized to seek to achieve
its objective by investing all of its investable assets in an investment
company having substantially the same investment objective and policies as the
Fund.

The Fund seeks to maintain a net asset value of $1.00 per share.

The Fund purchase only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations.

Although the Fund seeks to be fully invested, at times it may hold uninvested
cash reserves, which would adversely affect its yield.

There can be no assurance that the Fund will achieve its investment objective.

OTHER INVESTMENT PRACTICES

The Fund may also engage in the following investment practices when consistent
with their overall objectives and policies. These practices, and certain
associated risks, are more fully described
in the SAI.

6
<PAGE>

Other U.S. Government Obligations, such as obligations of Federal Home Loan
Banks and the Federal Home Loan Mortgage Corporation, are not backed by the
"full faith and credit" of the U.S. Government. In the case of securities not
backed by the "full faith and credit" of the U.S. Government, the investor must
look principally to the agency issuing or guaranteeing the obligation for
ultimate repayment, and may not be able to assert a claim against the U.S.
Government itself in the event the agency or instrumentality does not meet its
commitments.

REPURCHASE AGREEMENTS,
SECURITIES LOANS AND

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

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

7
<PAGE>

coupon obligations tends to fluctuate more in response to changes in interest
rates than the value of ordinary interest-paying debt securities with similar
maturities. The risk is greater when the period to maturity is longer.

FLOATING AND VARIABLE RATE SECURITIES. The Fund may invest in floating rate
securities, whose interest rates adjust automatically whenever a specified
interest rate changes, and variable rate securities, whose interest rates are
periodically adjusted. Certain of these instruments permit the holder to demand
payment of principal and accrued interest upon a specified number of days'
notice from either the issuer or a third party. Demand features on certain
floating or variable rate securities may obligate the Fund to pay a "tender
fee" to a third party. Demand features provided by foreign banks involve
certain risks associated with foreign investments.

OTHER MONEY MARKET FUNDS.

The Fund may invest up to 10% of its total assets in shares of other money
market funds when consistent with its investment objective and policies,
subject to applicable regulatory limitations. Additional fees may be charged by
other money market funds.

LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Fund limit investment
risks for its shareholders. These regulations and restrictions prohibit the
Fund from investing more than 10% of its net assets in illiquid securities
(which include securities restricted as to resale unless they are determined to
be readily marketable in accordance with procedures established by the Board of
Trustees). A complete description of other investment policies is included in
the SAI. Except for the Fund's investment objective, investment policies
designated as fundamental above or in the SAI, the Fund's investment policies
are not fundamental. The Trustees may change any non-fundamental investment
policy without shareholder approval.

RISK FACTORS

There can be no assurance that the Fund will be able to maintain a stable net
asset value. Changes in interest rates may affect the value of the obligations
held by the Fund. The value of fixed income securities varies inversely with
changes in prevailing interest rates, although money market instruments are
generally less sensitive to changes in interest rates than are longer-term
securities. For a discussion of certain other risks associated with the Fund's
additional investment activities, see "Other Investment Practices."

8
<PAGE>

MANAGEMENT
- ----------
THE FUND'S ADVISERS

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Fund, under a Sub-Investment Advisory Agreement
between CAM and Chase. CAM is a wholly-owned operating subsidiary of Chase. CAM
makes investment decisions for the Fund on a day-to-day basis. For these
services, CAM is entitled to receive a fee, payable by Chase from its advisory
fee, at an annual rate equal to 0.03% of the Fund's average daily net assets.
CAM provides discretionary investment advisory services to institutional
clients. The same individuals who serve as portfolio managers for Chase also
serve as portfolio managers for CAM. CAM is located at 1211 Avenue of the
Americas, New York, New York 10036.

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

PURCHASE BY REINVESTMENT OF NUVEEN UNIT INVESTMENT TRUST DISTRIBUTIONS.
Unitholders of Nuveen Unit Investment Trusts ("UITs") may purchase shares of
the Fund by automatically reinvesting distributions from their Nuveen UIT. To
obtain information on share purchase through investment of Nuveen UIT
distributions, call Nuveen toll-free at 800-257-8787.

ADDITIONAL INVESTMENTS.

An investor may add to his or her account by purchasing additional shares by
mailing a check to Shareholder Services, Inc. ("SSI") (payable to "Nuveen
Mutual Funds") at its address set forth below:

Nuveen Mutual Funds
c/o Shareholder Services, Inc.
P.O. Box 5330
Denver, CO 80217-5330

You may make an additional investment at any time with as little as $100. It is
important that the account number, account name, and the Fund to be purchased
are specified on the check or wire to ensure proper crediting to the investor's
account.

In order to ensure that wire orders are invested promptly, investors are
requested to notify SSI prior to the wire date. Mail orders must include the
"Invest by Mail" stub which accompanies each Fund's confirmation statement.

9
<PAGE>

THE SYSTEMATIC INVESTMENT PLAN. The Fund offers investors the ability to make
regular investments of $25 or more per transaction through automatic periodic
deduction from a bank savings or checking account. Existing shareholders may
begin the Plan at any time by sending a signed letter with signature guarantee
and a deposit slip or voided check to SSI. Investors may call SSI at
1-800-621-7227 for complete instructions.

PROCESSING OF PURCHASE ORDERS. Shares are sold without a sales load at the net
asset value next determined after the Fund's distributor receives an order in
proper form on any business day during which the Federal Reserve Bank of New
York and the New York Stock Exchange are open for business (a "Fund Business
Day"). In order for an investor to receive that day's dividend, SSI must
generally receive the purchase order prior to 12:00 p.m., Eastern time (the
Fund's Cut-off Time). The Fund intends to reject any purchase orders which are
received on any Fund Business Day on which the Public Securities Association
("PSA") recommends an early close to trading on the U.S. Government securities
market. The PSA is the trade association that represents securities firms and
banks that underwrite, trade and sell debt securities, both domestically and
internationally. Orders for shares received and accepted prior to 2:00 p.m.
will be entitled to all dividends declared on that day. Orders received for
shares after 2:00 p.m. and prior to 4:00 p.m., Eastern time on any Fund
Business Day will not be accepted and executed on the same day except at the
Fund's discretion. Orders received and not accepted after 2:00 p.m. will be
considered received prior to 2:00 p.m. on the following Fund Business Day and
processed accordingly.

Orders for shares are accepted by the Fund after funds are converted to Federal
Funds. Orders paid by check and received before 2:00 p.m. will generally be
available for the purchase of shares the following Fund Business Day. The Fund
reserves the right to reject any purchase order.

HOW TO SELL SHARES

IN GENERAL. Upon receipt of a proper redemption request on a business day, the
Fund will redeem its shares at their next determined net asset value. You may
use the telephone redemption, check redemption, or the regular redemption
procedures discussed hereafter. The purchase and redemption methods employed
will determine when funds will be available to you. Where the shares to be
redeemed have been purchased by check or through Fund Direct within 15 days
prior to the date the redemption request is received, the Fund will not send
the redemption proceeds until the check or Fund Direct transfer for the
purchase has cleared, which may take up to 15 days. There is no delay when the
shares being redeemed were purchased by wiring federal funds.

CHECK REDEMPTION.
Shareholders may request that they be provided with drafts ("Redemption
Checks") drawn on their account. Shares for which stock

10
<PAGE>

certificates have been issued will not be available for redemption by the use
of Redemption Checks. Redemption Checks may be made payable to the order of any
person in an amount of $500 or more, and dividends are earned until the
Redemption Check clears. Redemption Checks clear through the United Missouri
Bank of Kansas City, N.A. (the "Bank") and are subject to the same rules and
regulations that the Bank applies to checking accounts.

When a Redemption Check is presented, a sufficient number of full and
fractional shares in the shareholder's account will be redeemed to cover the
amount of the Redemption Check. Shares for which stock certificates have been
issued will not be available for redemption by the use of Redemption Checks.
There must be sufficient shares in the shareholder's account to cover the
amount of each Redemption Check written or the check will be returned. Checks
should not be used to close an account. Shareholders wishing to use Redemption
Checks must complete the appropriate section of the Application Form and submit
the enclosed signature card.

This check redemption privilege may be modified or terminated at any time. The
check redemption feature does not constitute a bank checking account.

REDEMPTION BY MAIL.
Redemption requests also may be mailed to SSI at the following address:

Nuveen Mutual Funds

c/o Shareholder Services, Inc.
P.O. Box 5330
Denver, CO 80217-5330

A mailed request to redeem shares must include the following:

(a) A letter of instruction or a stock assignment specifying the number of
shares or dollar amount to be redeemed, as well as the Fund being redeemed,
signed by all registered owners of the shares in the exact names in which they
are registered;

(b) Any required signature guarantees (see "Signature Guarantees" below); and

(c) Other supporting legal documents in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit sharing plans
and other organizations.

Shareholders who are uncertain of the requirements for redemption should call
1-800-621-7227

SIGNATURE GUARANTEE. To protect investors, the Fund, SSI and Nuveen from fraud,
signature guarantees are required for certain redemptions. Signature guarantees
are required for redemptions where the proceeds are to be sent to someone other
than the registered shareholder(s) or the registered address and for large
dollar transactions. The purpose of signature guarantees is to verify the
identity of the party who has authorized a redemption.

The signatures must be guaranteed by a member of an approved Medallion
Guarantee Program or in such a manner as may be acceptable to the Fund.

REDEMPTION BY TELEPHONE.

Provided that an investor has previously established a telephone redemption
privilege via a letter of instruction, redemption of shares

11
<PAGE>

totalling $50,000 or less may be made by calling SSI at
1-800-621-7227 and requesting that redemption proceeds be mailed to the
investor or wired to his or her bank. If an investor selects a telephone
redemption privilege, the investor authorizes SSI to act on telephone
instructions from any person representing himself or herself to be the investor
or the investor's investment representative and reasonably believed by SSI to
be genuine. The Fund will require SSI to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, it may be liable for any
losses due to unauthorized or fraudulent instructions. An investor agrees,
however, that to the extent permitted by applicable law, neither the Fund nor
its agents nor SSI nor Nuveen will be liable for any loss, liability, cost or
expense arising out of any redemption request, including any fradulent or
unauthorized request. For information, consult SSI at 1-800-621-7227. When
redeeming shares by telephone, an investor must have ready his or her name and
account number, as well as Fund name, Social Security number or tax I.D. number
and account address.

To change the name of the commercial bank or the account designated to receive
redemption proceeds, a written request must be sent to SSI at its address set
forth above under "Redemption by Mail." Requests to change the bank or account
must be signed by each shareholder and each signature must be guaranteed.
Please contact 1-800-621-7227 for further details. The telephone redemption
privilege may be modified or terminated without notice.

SYSTEMATIC WITHDRAWAL PLAN. Investors are offered the ability to make regular
withdrawals of $100 or more monthly, quarterly or semiannually. A minimum
account balance of $10,000 is required to establish a Systematic Withdrawal
Plan. Call SSI at 1-800-621-7227 for complete instructions.

PROCESSING OF REDEMPTION ORDERS. The Fund generally sends payment for an
investor's shares on the Fund Business Day after the investor's request is
received in proper form, provided that the investor's request is received by
the Fund prior to 2:00 p.m., and assuming that the Fund has collected payment
of the purchase price of such investor's shares. Under unusual circumstances,
the Fund may suspend redemptions, or postpone payment for more than seven
business days, as permitted by federal securities laws.

INVOLUNTARY REDEMPTION OF ACCOUNTS. An investor's shares may be redeemed
involuntarily if the aggregate net asset value of the shares in the investor's
account is less than $500 or if the investor purchases through the Systematic
Investment Plan and fails to meet the required investment minimum within a
twelve month period. In the event of any such redemption, an investor will
receive at least 60 days' notice prior to the redemption.

12
<PAGE>

EXCHANGE FEATURE
- ----------------

EXCHANGE PRIVILEGES

You may exchange shares of the Fund for the appropriate class of shares of any
other open-end management investment company with reciprocal exchange
privileges advised by Nuveen Advisory (the "Nuveen Funds"), provided that the
Nuveen Fund into which shares are to be exchanged is offered in the
shareholder's state of residence and that the shares to be exchanged have been
held by the shareholder for a period of at least 15 days. You may exchange Fund
shares by calling (800) 621-7227 or by mailing your written request to SSI.
Shares of Nuveen Funds purchased subject to a front-end sales charge may be
exchanged for shares of the Fund or any other Nuveen Fund at the next
determined net asset value without any front-end sales charge. No CDSC
otherwise applicable will be assessed on an exchange, and the holding period of
your investment will be carried over to the new fund for purposes of
determining any future CDSC. You may not exchange B shares for shares of a
Nuveen money market fund. Shares of any Nuveen Fund purchased through dividend
reinvestment or through reinvestment of Nuveen Unit Trust distributions (and
any dividends thereon) may be exchanged for Class A shares of any Nuveen Fund
without a front-end sales charge. Exchanges of shares with respect to which no
front-end sales charge has been paid will be made at the public offering price,
which may include a front-end sales charge, unless a front-end sales charge has
previously been paid on the investment represented by the exchanged shares
(i.e., the shares to be exchanged were originally issued in exchange for shares
on which a front-end sales charge was paid), in which case the exchange will be
made at net asset value. Because certain other Nuveen Funds may determine net
asset value and therefore honor purchase or redemption requests on days when
the Fund does not (generally, Martin Luther King's Birthday, Columbus Day and
Veterans Day), exchanges of shares of one of those funds for shares of the Fund
may not be effected on such days.

The total value of shares being exchanged must at least equal the minimum
investment requirement of the Nuveen Fund into which they are being exchanged.
Exchanges are made based on the relative dollar values of the shares involved
in the exchange, and will be effected by redemption of shares of the Nuveen
Fund held and purchase of the shares of the other Nuveen Fund. For federal
income tax purposes, any such exchange constitutes a sale and purchase of
shares and may result in capital gain or loss. Before exercising any exchange,
you should obtain the Prospectus for the Nuveen Fund into which shares are to
be exchanged and read it carefully. If the registration of the account for the
Fund you are purchasing is not exactly the same as that of the fund account
from which the exchange is made, written instructions from all holders of the
account from which the exchange is being made must be received, with signatures
guaranteed by a member of an approved Medallion Guarantee Program or in such
other manner as may be acceptable to the Fund. The

13
<PAGE>

exchange privilege may be modified or discontinued at any time. If you do not
wish to have telephone exchange privileges, you must indicate this in the
"Telephone Services" section of your Account Application or otherwise notify
the Fund in writing of your desire.

EXCHANGE BY MAIL. In order to exchange shares by mail, an investor must include
in the exchange request his or her account number for his or her current fund,
the name of his or her current fund and the class which he or she wishes to
exchange from, the name of the fund into which he or she wishes to exchange,
and the documents described in the procedures set forth above under "Redemption
of Shares--Redemption by Mail." The request to exchange shares must be sent to:

Nuveen Mutual Funds
Shareholder Services, Inc.
P.O. Box 5330

Denver, CO 80217-5330

The discussion of the exchange feature in this Prospectus supersedes the
discussion of the exchange privilege in the SAI for investors purchasing shares
through Nuveen.

HOW THE FUND
VALUES ITS SHARES
- -----------------
The net asset value of each class of shares of the Fund is currently determined
daily as of 4:00 p.m., Eastern time on each Fund Business Day by dividing the
net assets of the Fund attributable to such class by the number of shares of
such class outstanding at the time the determination is made. Effective with
the anticipated introduction of certain automated share purchase programs, the
net asset value of shares of each class of the Fund available through the
programs will also be determined as of 6:00 p.m., Eastern time on each Fund
Business Day.

The portfolio securities of the Fund are valued at their amortized cost in
accordance with federal securities laws, certain requirements of which are
summarized under "Common Investment Policies." This method increases stability
in valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price the Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share of the Fund will remain constant at $1.00 and the Fund will employ
specific investment policies and procedures to accomplish this result, although
no assurance can be given that they will be able to do so on a continuing
basis. The Board of Trustees will review the holdings of the Fund at intervals
it deems appropriate to determine whether the Fund's net asset value calculated
by using available market quotations (or an appropriate substitute which
reflects current market conditions) deviates from $1.00 per share based upon
amortized cost. In the event the Trustees determine that a deviation exists
that may result in material dilution or other unfair results to investors or
existing shareholders, the Trustees will take such corrective action as they
regard as necessary and appropriate.

14
<PAGE>

HOW DIVIDENDS AND DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------
The net investment income of each class of shares of the Fund is declared as a
dividend to the shareholders each Fund Business Day. Dividends are declared as
of the time of day which corresponds to the latest time on that day that the
Fund's net asset value is determined. Shares begin accruing dividends on the
day they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by ACH to a pre-established bank
account, dividends are distributed in the form of additional shares. Dividends
that are otherwise taxable are still taxable to you whether received in cash or
additional shares. Net realized short-term capital gains, if any, will be
distributed at least annually. The Fund does not expect to realize net
long-term capital gains.

Net investment income for the Fund consists of all interest accrued and
discounts earned, less amortization of any market premium on the portfolio
assets of the Fund and the accrued expenses of the Fund.

All Fund distributions of net investment income will be taxable as ordinary
income. Any distributions of net capital gain which are designated as "capital
gain dividends" will be taxable as long-term capital gain, regardless of how
long you have held your shares. The taxation of your distributions is the same
whether received in cash or in shares through the reinvestment of
distributions.

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

OTHER INFORMATION
CONCERNING THE FUND
- -------------------
DISTRIBUTION PLANS
The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Fund
has adopted a

15
<PAGE>

Rule 12b-1 distribution plan which provides that the Fund will pay distribution
fees at annual rates of up to 0.10% of the average daily net assets
attributable to its Vista Shares. Payments under the distribution plan shall be
used to compensate or reimburse the Funds' distributor and broker-dealers for
services provided and expenses incurred in connection with the sale of Vista
Shares, and are not tied to the amount of actual expenses incurred. Promotional
activities for the sale of Vista Shares will be conducted generally by the
Vista Family of Funds, and activities intended to promote the Fund's Vista
Shares may also benefit the Fund's other shares and other Vista funds.

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

SHAREHOLDER SERVICING AGENTS
The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase and Nuveen) under which the
shareholder servicing agents have agreed to provide certain support services to
their customers. These services include one or more of the following: assisting
with purchase and redemption transactions, maintaining shareholder accounts and
records, furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.35% of the average daily net assets of the Vista Shares of the
Fund held by investors for whom the shareholder servicing agent maintains a
servicing relationship. Shareholder servicing agents may subcontract with other
parties for the provision of shareholder support services. The Board of
Trustees has determined that the amount payable in respect of "service fees"
(as defined in the NASD Rules of Fair Practice) does not exceed 0.25% of the
average annual net assets attributable to the Vista Shares of the Fund.

16
<PAGE>

fees for their services as shareholder servicing agents.

ADMINISTRATOR AND
SUB-ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of each Fund's
average daily net assets.

CUSTODIAN

TRANSFER AGENT
The Fund's Transfer Agent and Dividend Paying Agent is DST Systems, Inc., which
is located at 210 West 10th Street, Kansas City, MO 64105.

17
<PAGE>

ORGANIZATION AND
DESCRIPTION OF SHARES
The Fund is a portfolio of Mutual Fund Trust, an open-end management investment
company organized as a Massachusetts business trust in 1994 (the "Trust"). The
Trust has reserved the right to create and issue additional series and classes.
The share of a series or class represents an equal proportionate interest in
that series or class with each other share of that series or class. The shares
of each series or class participate equally in the earnings, dividends and
assets of the particular series or class. Shares have no preemptive or
conversion rights. Shares when issued are fully paid and non-assessable, except
as set forth below. Shareholders are entitled to one vote for each whole share
held, and each fractional share shall be entitled to a proportionate fractional
vote, except that Trust shares held in the treasury of the Trust shall not be
voted. Shares of each class of a Fund generally vote together except when
required under federal securities laws to vote separately on matters that only
affect a particular class, such as the approval of distribution plans for a
particular class. Fund shares will be maintained in book entry form, and no
certificates representing shares owned will be issued to shareholders.

The Fund may issue multiple classes of shares. This Prospectus relates only to
Vista Shares of the Fund. The Fund may offer other classes of shares in
addition to these classes and may determine not to offer certain classes of
shares. The categories of investors that are eligible to purchase shares and
minimum investment requirements may differ for each class of the Fund's shares.
In addition, other classes of Fund shares may be subject to differences in
sales charge arrangements, ongoing distribution and service fee levels, and
levels of certain other expenses, which would affect the relative performance
of the different classes. Investors may call 1-800-348-4782 to obtain
additional information about other classes of shares of the Fund that are
offered. Any person entitled to receive compensation for selling or servicing
shares of the Fund may receive different levels of compensation with respect to
one class of shares over another.

18
<PAGE>

shareholders of all series or classes when in the judgment of the Trustees it
is necessary or desirable to submit matters for a shareholder vote. The
Trustees will promptly call a meeting of shareholders to remove a trustee(s)
when requested to do so in writing by record holders of not less than 10% of
all outstanding shares of the Trust.

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

The Fund may advertise its annualized "yield" and its "effective yield".
Annualized "yield" is determined by assuming that income generated by an
investment in a Fund over a stated seven-day period (the "yield") will continue
to be generated each week over a 52-week period. It is shown as a percentage of
such investment. "Effective yield" is the annualized "yield" calculated
assuming the reinvestment of the income earned during each week of the 52-week
period. The "effective yield" will be slightly higher than the "yield" due to
the compounding effect of this assumed reinvestment.

19
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

December 29, 1997

PROSPECTUS
VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
Vista(SM) Shares

Investment Strategy: Current Income

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Fund in its December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call 1-800-LIPPER9. The SAI has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by reference.

INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary ........................................................................ 3
The expenses you pay on your Fund investment, including examples
Financial Highlights .................................................................. 4
The Fund's financial history
Fund Objective and Investment Approach ................................................ 5
Investment Policies ..................................................................... 5
Management .............................................................................. 7
Chase Manhattan Bank, the Funds' adviser; Chase Asset Management, the Fund's sub-adviser
How to Buy, Sell and Exchange Shares ................................................... 8
Exchange Feature ........................................................................ 11
How the Fund Values its Shares ......................................................... 12
How Dividends and Distributions Are Made; Tax Information .............................. 13
How the Fund distributes its earnings, and tax treatment related to those earnings
Other Information Concerning the Fund ................................................... 14
Distribution plans, shareholder servicing agents, administration, custodian, expenses and
organization
Performance Information ............................................................... 17
How performance is determined, stated and/or advertised
</TABLE>

2
<PAGE>

EXPENSE SUMMARY

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

Vista
Shares
-------
Annual Fund Operating
Expenses (as a percentage of average net assets)
Investment Advisory Fee ........................... 0.10%
12b-1 Fee * ....................................... 0.10%
Shareholder Servicing Fee (after estimated waiver of
fee)** .......................................... 0.23%
Other Expenses .................................... 0.16%
Total Fund Operating Expenses (after waivers of
fees)** .......................................... 0.59%

Example
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:

1 year ......... $6
3 years ...... 19
5 years ...... 33
10 years ...... 74

- -------------
* Long-term shareholders in mutual funds with 12b-1 fees, such as holders of
Vista Shares of the Fund, may pay more than the economic equivalent of the
maximum front-end sales charge permitted by rules of the National
Association of Securities Dealers, Inc.

** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such waiver,
the Shareholder Servicing Fee would be 0.35%, and Total Fund Operating
Expenses would be 0.71%. Chase has agreed to waive fees payable to it
and/or reimburse expenses for a two year period commencing on May 6, 1996
to the extent necessary to prevent Total Fund Operating Expenses for Vista
Shares of the Fund from exceeding 0.76% of average net assets during such
period.

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

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

3
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for
one Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, 1177 Avenue of the Americas, New York, N.Y. 10036,
whose report thereon is included in the Annual Report to Shareholders.

<TABLE>
<CAPTION>
Year Year Year 11/1/93 1/1/93*
ended ended ended through through
8/31/97 8/31/96 8/31/95 8/31/94** 10/31/93
-------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
- ---------------------------------------
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- -------- -------- --------
Income from Investment Operations:
Net Investment Income ............... 0.049 0.049 0.049 0.025 0.019
---------- ---------- -------- -------- --------
Less Distributions:
Dividends from Net Investment
Income .............................. 0.049 0.049 0.049 0.025 0.019
---------- ---------- -------- -------- --------
Net Asset Value, End of Period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======== ======== ========
Total Return ........................ 5.04% 4.97% 5.05% 2.48% 2.02%
Ratios/Supplemental Data
Net Assets, End of Period
(000 omitted) ..................... $2,139,368 $2,057,023 $341,336 $335,365 $323,498
Ratio of Expenses to
Average Net Assets# ............... 0.59% 0.65% 0.80% 0.80% 0.82%
Ratio of Net Investment Income to
Average Net Assets# ............... 4.93% 4.83% 4.93% 2.94% 2.39%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ............... 0.72% 0.73% 0.80% 0.80% 0.82%
Ratio of Net Investment Income
without waivers and assumption of
expenses to Average Net Assets# ... 4.80% 4.75% 4.93% 2.94% 2.39%
</TABLE>

- -----------
* Commencement of offering shares.

** In 1994 the Fund changed its fiscal year-end from October 31 to August 31.

# Short periods have been annualized.

4
<PAGE>

FUND OBJECTIVE AND INVESTMENT APPROACH
The Fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and maintenance of liquidity.

INVESTMENT POLICIES
As a matter of fundamental policy, the Fund is authorized to seek to
achieve its objective by investing all of its investable assets in an
investment company having substantially the same investment objective and
policies as the Fund.

The Fund seeks to maintain a net asset value of $1.00 per share.

The Fund invests only in U.S. dollar-denominated high quality obligations
which are determined to present minimal credit risks. This credit determination
must be made in accordance with procedures established by the Board of
Trustees. Each investment must be rated in the highest short-term rating
category by at least two national rating organizations ("NROs") (or one NRO if
the instrument was rated only by one such organization) or, if unrated, must be
determined to be of comparable quality in accordance with the procedures of the
Trust. If a security has an unconditional guarantee or similar enhancement, the
issuer of the guarantee or enhancement may be relied upon in meeting these
ratings requirements rather than the issuer of the security. Securities in
which the Fund invests may not earn as high a level of current income as
long-term or lower quality securities.

The Fund purchase only instruments which have or are deemed to have
remaining maturities of 397 days or less in accordance with federal
regulations.

Although the Fund seeks to be fully invested, at times it may hold
uninvested cash reserves, which would adversely affect its yield.

There can be no assurance that the Fund will achieve its investment
objective.

Other Investment Practices

The Fund may also engage in the following investment practices when
consistent with their overall objectives and policies. These practices, and
certain associated risks, are more fully described in the SAI.

U.S. Government Obligations. The Fund may invest in direct obligations of
the U.S. Treasury. The Fund may also invest in other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
(collectively, "U.S. Government Obligations"). Certain U.S. Government
Obligations, such as U.S. Treasury securities and direct pass-through
certificates of the Government National Mortgage Association (GNMA), are backed
by the "full faith and credit" of the U.S. Government. Other U.S. Government
Obligations, such as obligations of Federal Home Loan Banks and the Federal Home
Loan Mortgage Corporation, are not backed by the "full faith and credit" of the
U.S. Government. In the case of securities not backed by the "full faith and
credit" of the U.S. Government, the investor must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the U.S. Government itself in the event the
agency or instrumentality does not meet its commitments.

Repurchase Agreements, Securities Loans and Forward and Stand-By
Commitments. The Fund may enter into agreements to purchase and resell
securities at an agreed-upon price and time. The

5
<PAGE>

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

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

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

Floating and Variable Rate Securities. The Fund may invest in floating
rate securities, whose interest rates adjust automatically whenever a specified
interest rate changes, and variable rate securities, whose interest rates are
periodically adjusted. Certain of these instruments permit the holder to demand
payment of principal and accrued interest upon a specified number of days'
notice from either the issuer or a third party. Demand features on certain
floating or variable rate securities may obligate the Fund to pay a "tender
fee" to a third party. Demand features provided by foreign banks involve
certain risks associated with foreign investments.

Other Money Market Funds. The Fund may invest up to 10% of its total
assets in shares of other money market funds when consistent with its
investment objective and policies, subject to applicable regulatory
limitations. Additional fees may be charged by other money market funds.

Portfolio Turnover. It is intended that the Fund will be fully managed by
buying and selling securities, as well as holding securities to maturity. The
frequency of the Fund's portfolio transactions will vary from year to year. In
managing the Fund, the Fund's advisers will seek to take advantage of market
developments, yield disparities and variations in the creditworthiness of
issuers. More frequent turnover will generally result in higher transactions
costs, including dealer mark-ups.

6
<PAGE>

Limiting Investment Risks

Specific regulations and investment restrictions help the Fund limit
investment risks for its shareholders. These regulations and restrictions
prohibit the Fund from investing more than 10% of its net assets in illiquid
securities (which include securities restricted as to resale unless they are
determined to be readily marketable in accordance with procedures established
by the Board of Trustees). A complete description of other investment policies
is included in the SAI. Except for the Fund's investment objective, investment
policies designated as fundamental above or in the SAI, the Fund's investment
policies are not fundamental. The Trustees may change any non-fundamental
investment policy without shareholder approval.

Risk Factors

General. There can be no assurance that the Fund will be able to maintain
a stable net asset value. Changes in interest rates may affect the value of the
obligations held by the Fund. The value of fixed income securities varies
inversely with changes in prevailing interest rates, although money market
instruments are generally less sensitive to changes in interest rates than are
longer-term securities. For a discussion of certain other risks associated with
the Fund's additional investment activities, see "Other Investment Practices."

MANAGEMENT
The Fund's Advisers

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

For its investment advisory services to the Fund, Chase is entitled to
receive an annual fee computed daily and paid monthly at an annual rate equal
to 0.10% of the Fund's average daily net assets. Chase is located at 270 Park
Avenue, New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to the Fund, under a Sub-Investment Advisory
Agreement between CAM and Chase. CAM is a wholly-owned operating subsidiary of
Chase. CAM makes investment decisions for the Fund on a day-to-day basis. For
these services, CAM is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.03% of the Fund's average daily net
assets. CAM provides discretionary investment advisory services to
institutional clients. The same individuals who serve as portfolio managers for
Chase also serve as portfolio managers for CAM. CAM is located at 1211 Avenue
of the Americas, New York, New York 10036.

7
<PAGE>

HOW TO BUY, SELL AND EXCHANGE SHARES
How to Buy Shares
A Fund account can be opened through Lipper & Co. LLP with as little as
$2,500 ($1,000 for IRAs, SEP-IRAs and the Systematic Investment Plan).

Initial Investments by Mail

Shares of the Fund may be purchased by completing and signing an account
application and mailing it, together with a check payable to "Lipper Mutual
Funds", to:

Lipper Mutual Funds
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798

When purchases are made by check, redemptions will not be allowed until
clearance or the purchase check, which may take 15 calendar days or longer. In
the event a check used to pay for shares is not honored by a bank, the purchase
order will be cancelled and the shareholder will be liable for any losses or
expenses incurred by the Fund.

Initial Investment by Wire

Shares of the Fund may also be purchased by wiring Federal Funds to the
Fund's custodian (see instructions below). In order to insure prompt crediting
of the Federal Funds wire, it is important to follow these steps:

(a) The investor must telephone Chase Global Funds Service Co. ("CGFSC")
(toll-free 1-800-LIPPER9) and provide name, address, telephone number, social
security or tax I.D. number, the Fund and class of shares to be purchased, the
amount being wired and the name of the bank wiring the funds. (Investors with
existing accounts should also notify CGFSC prior to wiring funds). An account
number will then be provided:

(b) The investor must instruct his or her bank to wire the specified
amount to the Fund's custodian as follows:

The Chase Manhattan Bank
New York, N.Y. 10003
ABA # 0210-0002-1
DDA Acct. #910-2-753168
F/B/O Lipper Mutual Funds
Ref: Vista U.S. Government Money Market
Account Number -----------
Account Name -----------

(c) The investor must forward a completed and signed account application
to CGFSC and mail a carbon copy of the account application (manually signed) to
CGFSC at the address set forth above under "Initial Investments by Mail" as
soon as possible. It is important that investors forward the account
application to CGFSC in a timely manner, since shares of the Fund will not be
redeemed, exchanged or transferred until CGFSC receives the shareholder's
account application. Federal Funds purchases will be accepted only on days on
which both the NYSE and the Fund's custodian are open for business.

8
<PAGE>

Additional Investments

An investor may add to his or her account by purchasing additional shares
of the same class of the Fund's shares by mailing a check to CGFSC (payable to
"Lipper Mutual Funds") at its address set forth above under "Initial
Investments by Mail" or by wiring funds to the Fund's custodian using the
procedures set forth above under "Initial Investment by Wire." You may make an
additional investment at any time with as little as $100. It is important that
the account number, account name, and the Fund and class of shares to be
purchased are specified on the check or wire to ensure proper crediting to the
investor's account.

In order to ensure that wire orders are invested promptly, investors are
requested to notify CGFSC prior to the wire date. Mail orders must include the
"Invest by Mail" stub which accompanies each Fund's confirmation statement.

The Systematic Investment Plan

CGFSC offers investors the ability to make regular investments of $100 or
more per transaction through automatic periodic deduction from a bank savings
or checking account. Investors electing to start this Systematic Investment
Plan when opening an account should complete the appropriate section of the
account application. Existing shareholders may begin the Plan at any time by
sending a signed letter with signature guarantee and a deposit slip or voided
check to CGFSC. Investors may call CGFSC at 1-800-LIPPER9 for complete
instructions.

Processing of Purchase Orders

Shares are sold without a sales load at the net asset value next
determined after the Fund's distributor receives an order in proper form on any
business day during which the Federal Reserve Bank of New York and the New York
Stock Exchange are open for business (a "Fund Business Day"). In order for an
investor to receive that day's dividend, CGFSC must generally receive the
purchase order prior to 2:00 p.m., Eastern time (the Fund's Cut-off Time). The
Fund intends to reject any purchase orders which are received on any Fund
Business Day on which the Public Securities Association ("PSA") recommends an
early close to trading on the U.S. Government securities market. The PSA is the
trade association that represents securities firms and banks that underwrite,
trade and sell debt securities, both domestically and internationally. Orders
for shares received and accepted prior to 2:00 p.m. will be entitled to all
dividends declared on that day. Orders received for shares after 2:00 p.m. and
prior to 4:00 p.m., Eastern time on any Fund Business Day will not be accepted
and executed on the same day except at the Fund's discretion. Orders received
and not accepted after 2:00 p.m. will be considered received prior to 2:00 p.m.
on the following Fund Business Day and processed accordingly.

Orders for shares are accepted by the Fund after funds are converted to
Federal Funds. Orders paid by check and received before 2:00 p.m. will
generally be available for the purchase of shares the following Fund Business
Day. The Fund reserves the right to reject any purchase order.

How to Sell Shares

Investors may redeem Fund shares on any Fund Business Day either through
Lipper & Co. LLP or CGFSC. The Fund will only forward redemption payments on
shares for which it has collected payment. The price an investor receives is
the next net asset value calculated after a redemption request is received in
proper form.

9
<PAGE>

Redemption through Lipper & Co., LLP

Redemption requests may be made through Lipper & Co. LLP. The investment
representative will be responsible for furnishing all necessary documentation
to CGFSC located at 73 Tremont Street, Boston, MA 02208.

Redemption by Mail

Redemption requests also may be mailed to CGFSC at the following address:

Lipper Mutual Funds
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208-2798

A mailed request to redeem shares must include the following:

(a) A letter of instruction or a stock assignment specifying the number of
shares or dollar amount to be redeemed, as well as the Fund and class being
redeemed, signed by all registered owners of the shares in the exact names in
which they are registered;

(b) Any required signature guarantees (see "Signature Guarantees" below);
and

(c) Other supporting legal documents in the case of estates, trusts,
guardianships, custodianships, corporations, pension and profit sharing plans
and other organizations.

Shareholders who are uncertain of the requirements for redemption should
call 1-800-LIPPER9.

Signature Guarantee

To protect investors, the Fund and CGFSC from fraud, signature guarantees
are required for certain redemptions. Signature guarantees are required for
redemptions where the proceeds are to be sent to someone other than the
registered shareholder(s) or the registered address. The purpose of signature
guarantees is to verify the identity of the party who has authorized a
redemption.

Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Exchange Act. Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
A complete definition of eligible guarantor institutions is available from
CGFSC. Broker-dealers guaranteeing signatures must be a member of a clearing
corporation or maintain net capital of at least $100,000. Credit unions must be
authorized to issue signature guarantees. Signature guarantees will be accepted
from any eligible guarantor institution which participates in a signature
guarantee program.

The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
must specify the total number of shares, Fund and class of shares to be
redeemed; or (3) on all stock certificates tendered for redemption (in the
event that all shares being redeemed are held in certificated form).

Redemption by Telephone

Provided that an investor has previously established a telephone
redemption privilege when completing an account application, a request for
redemption of shares may be made by calling CGFSC at 1-800-LIPPER9 and
requesting that redemption proceeds be mailed to the investor or wired to his
or her bank. If an investor selects a telephone redemption privilege, the
investor authorizes CGFSC to act on telephone instructions from any person
representing himself or herself to be the investor or the investor's investment
representative and

10
<PAGE>

reasonably believed by CGFSC to be genuine. The Fund will require CGFSC to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, it may be liable for any losses due to unauthorized or
fraudulent instructions. An investor agrees, however, that to the extent
permitted by applicable law, neither the Fund nor its agents nor CGFSC will be
liable for any loss, liability, cost or expense arising out of any redemption
request, including any fradulent or unauthorized request. For information,
consult CGFSC at 1-800-LIPPER9. When redeeming shares by telephone, an investor
must have ready his or her name and account number, as well as Fund name,
Social Security number or tax I.D. number and account address.
To change the name of the commercial bank or the account designated to
receive redemption proceeds, a written request must be sent to CGFSC at its
address set forth above under "Redemption by Mail." Requests to change the bank
or account must be signed by each shareholder and each signature must be
guaranteed. Please contact 1-800-LIPPER9 for further details. The telephone
redemption privilege may be modified or terminated without notice.

Systematic Withdrawal Plan

CGFSC offers investors the ability to make regular withdrawls of $100 or
more monthly, quarterly or semiannually. A minimum account balance of $5,000 is
required to establish a Systematic Withdrawl Plan. Call CGFSC at 1-800-LIPPER9
for complete instructions.

Processing of Redemption Orders

The Fund generally sends payment for an investor's shares on the Fund
Business Day after the investor's request is received in proper form, provided
that the investor's request is received by Fund prior to 2:00 p.m., and
assuming that the Fund has collected payment of the purchase price of such
investor's shares. Under unusual circumstances, the Fund may suspend
redemptions, or postpone payment for more than seven business days, as
permitted by federal securities laws.

Involuntary Redemption of Accounts

An investor's shares may be redeemed involuntarily if the aggregate net
asset value of the shares in the investor's account is less than $500 or if the
investor purchases through the Systematic Investment Plan and fails to meet the
required investment minimum within a twelve month period. In the event of any
such redemption, an investor will receive at least 60 days' notice prior to the
redemption.

EXCHANGE FEATURE
CGFSC makes available to investors an exchange feature which allows
investors to purchase, in exchange for shares of the Fund, shares of certain
other funds in the Lipper Group of Funds, to the extent such shares are offered
for sale in the investor's state of residence and the purchase meets the
minimum investment and other eligibility requirements of the fund into which
the investor is exchanging. If an investor wishes to use the exchange feature,
he or she should consult his or her investment representative or CGFSC to
determine if the feature is available and whether any other conditions are
imposed on its use. The discussion of the exchange feature in this Prospectus
supersedes the discussion of the exchange privilege in the SAI for investors
purchasing shares through Lipper Mutual Funds.
To use the exchange feature, an investor or his or her investment
representative acting on his or her behalf must give exchange instructions to
CGFSC by mail, or by telephone if the investor has previously established the
telephone exchange privilege, as further described below. Shares will be
exchanged at the next determined net asset value by effecting a redemption of
shares of the Fund and a purchase of shares of the exchange fund. No fees are
charged in connection with the exchange feature.

11
<PAGE>

Before any exchange, an investor must obtain and should carefully review a
copy of the current prospectus of the fund into which he or she wishes to
exchange and should retain such copy for future reference.

Exchanges may be subject to limitations as to amounts or frequency, and to
other restrictions established by CGFSC to assure that exchanges do not
disadvantage any of the funds in the Lipper Group of Funds or their
shareholders. Shares held in broker "street name" may not be exchanged by mail
or telephone; an investor must contact his or her investment representative to
exchange such shares. CGFSC reserves the right to reject any exchange request
in whole or in part. The exchange feature may be modified or terminated at any
time.

The exchange of shares of one fund for shares of another is treated for
federal income tax purposes as a sale of the shares given in exchange by the
shareholder and, therefore, an exchanging shareholder may realize a taxable
gain or loss.

Exchange by Mail

In order to exchange shares by mail, an investor must include in the
exchange request his or her account number for his or her current fund, the
name of his or her current fund and the class which he or she wishes to
exchange from, the name of the fund into which he or she wishes to exchange,
and the documents described in the procedures set forth above under "Redemption
of Shares--Redemption by Mail." The request to exchange shares must be sent to:

Lipper Mutual Funds
c/o Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798

HOW THE FUND VALUES ITS SHARES

The net asset value of each class of shares of the Fund is currently
determined daily as of 4:00 p.m., Eastern time on each Fund Business Day by
dividing the net assets of the Fund attributable to such class by the number of
shares of such class outstanding at the time the determination is made.
Effective with the anticipated introduction of certain automated share purchase
programs, the net asset value of shares of each class of the Fund available
through the programs will also be determined as of 6:00 p.m., Eastern time on
each Fund Business Day.

12
<PAGE>

HOW DIVIDENDS AND DISTRIBUTIONS ARE MADE; TAX INFORMATION
The net investment income of each class of shares of the Fund is declared
as a dividend to the shareholders each Fund Business Day. Dividends are
declared as of the time of day which corresponds to the latest time on that day
that the Fund's net asset value is determined. Shares begin accruing dividends
on the day they are purchased. Dividends are distributed monthly. Unless a
shareholder arranges to receive dividends in cash or by ACH to a
pre-established bank account, dividends are distributed in the form of
additional shares. Dividends that are otherwise taxable are still taxable to
you whether received in cash or additional shares. Net realized short-term
capital gains, if any, will be distributed at least annually. The Fund does not
expect to realize net long-term capital gains.

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

Taxation of Distributions
All Fund distributions of net investment income will be taxable as
ordinary income. Any distributions of net capital gain which are designated as
"capital gain dividends" will be taxable as long-term capital gain, regardless
of how long you have held your shares. The taxation of your distributions is
the same whether received in cash or in shares through the reinvestment of
distributions.

To the extent distributions are attributable to interest from obligations
of the U.S. Government and certain of its agencies and instrumentalities, such
distributions may be exempt from certain types of state and local taxes.

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

13
<PAGE>

OTHER INFORMATION CONCERNING THE FUND

Distribution Plans

The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Fund
has adopted a Rule 12b-1 distribution plan which provides that the Fund will
pay distribution fees at annual rates of up to 0.10% of the average daily net
assets attributable to its Vista Shares. Payments under the distribution plan
shall be used to compensate or reimburse the Funds' distributor and
broker-dealers for services provided and expenses incurred in connection with
the sale of Vista Shares, and are not tied to the amount of actual expenses
incurred. Promotional activities for the sale of Vista Shares will be conducted
generally by the Vista Family of Funds, and activities intended to promote the
Fund's Vista Shares may also benefit the Fund's other shares and other Vista
funds.

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

Shareholder Servicing Agents

The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase) under which the shareholder
servicing agents have agreed to provide certain support services to their
customers. These services include one or more of the following: assisting with
purchase and redemption transactions, maintaining shareholder accounts and
records, furnishing customer statements, transmitting shareholder reports and
communications to customers and other similar shareholder liaison services. For
performing these services, each shareholder servicing agent receives an annual
fee of up to 0.35% of the average daily net assets of the Vista Shares of the
Fund held by investors for whom the shareholder servicing agent maintains a
servicing relationship. Shareholder servicing agents may subcontract with other
parties for the provision of shareholder support services. The Board of
Trustees has determined that the amount payable in respect of "service fees"
(as defined in the NASD Rules of Fair Practice) does not exceed 0.25% of the
average annual net assets attributable to the Vista Shares of the Fund.

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

14
<PAGE>

servicing agents may, at their own expense, provide gifts, such as computer
software packages, guides and books related to investment or additional Fund
shares valued up to $250 to their customers that invest in the Vista Funds.

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

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

Administrator and Sub-Administrator

Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of the Fund's
average daily net assets.

Custodian

Transfer Agent

The Fund's Transfer Agent and Dividend Paying Agent is DST Systems, Inc.,
which is located at 210 West 10th Street, Kansas City, MO 64105.

Expenses

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

15
<PAGE>

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

Organization and Description of Shares

The Fund is a portfolio of Mutual Fund Trust, an open-end management
investment company organized as a Massachusetts business trust in 1994 (the
"Trust"). The Trust has reserved the right to create and issue additional
series and classes. The share of a series or class represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class participate equally in the
earnings, dividends and assets of the particular series or class. Shares have
no preemptive or conversion rights. Shares when issued are fully paid and
non-assessable, except as set forth below. Shareholders are entitled to one
vote for each whole share held, and each fractional share shall be entitled to
a proportionate fractional vote, except that Trust shares held in the treasury
of the Trust shall not be voted. Shares of each class of a Fund generally vote
together except when required under federal securities laws to vote separately
on matters that only affect a particular class, such as the approval of
distribution plans for a particular class. Fund shares will be maintained in
book entry form, and no certificates representing shares owned will be issued
to shareholders.

The Fund may issue multiple classes of shares. This Prospectus relates
only to Vista Shares of the Fund. The Fund may offer other classes of shares in
addition to these classes and may determine not to offer certain classes of
shares. The categories of investors that are eligible to purchase shares and
minimum investment requirements may differ for each class of the Fund's shares.
In addition, other classes of Fund shares may be subject to differences in
sales charge arrangements, ongoing distribution and service fee levels, and
levels of certain other expenses, which would affect the relative performance
of the different classes. Investors may call 1-800-348-4782 to obtain
additional information about other classes of shares of the Fund that are
offered. Any person entitled to receive compensation for selling or servicing
shares of the Fund may receive different levels of compensation with respect to
one class of shares over another.

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

16
<PAGE>

PERFORMANCE INFORMATION
The Fund may advertise its annualized "yield" and its "effective yield".
Annualized "yield" is determined by assuming that income generated by an
investment in a Fund over a stated seven-day period (the "yield") will continue
to be generated each week over a 52-week period. It is shown as a percentage of
such investment. "Effective yield" is the annualized "yield" calculated
assuming the reinvestment of the income earned during each week of the 52-week
period. The "effective yield" will be slightly higher than the "yield" due to
the compounding effect of this assumed reinvestment.

17
<PAGE>

(This Page Intentionally Left Blank)
<PAGE>

<PAGE>

[CHASE VISTA LOGO]

Vista Service Center
P.O. Box 419392
Kansas City, MO 64141-6392
- --------------------------------------------------------------------------------

Transfer Agent and Dividend Paying Agent DST Systems, Inc.

210 West 10th Street
Kansas City, MO 64105

Legal Counsel
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

[CHASE VISTA LOGO]

Vista Shares

- - 100% U.S. Treasury Securities

Money Market Fund

- - Treasury Plus Money
Market Fund

- - Federal Money
Market Fund

- - U.S. Government

Money Market Fund

- - Cash Management
Money Market Fund

- - Tax Free Money

Market Fund

- - New York Tax Free
Money Market Fund

- - California Tax Free
Money Market Fund

Prospectus
and Application

December 27, 1996

<PAGE>

[CHASE VISTA LOGO]

Vista Service Center
P.O. Box 419392
Kansas City, MO 64141-6392
- --------------------------------------------------------------------------------

Transfer Agent and Dividend Paying Agent DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105

Legal Counsel
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

[CHASE VISTA LOGO]

Vista Shares

- - 100% U.S. Treasury Securities
Money Market Fund

- - Treasury Plus Money
Market Fund

- - Federal Money
Market Fund

- - U.S. Government
Money Market Fund

- - Cash Management
Money Market Fund

- - Tax Free Money
Market Fund

- - New York Tax Free
Money Market Fund

- - California Tax Free
Money Market Fund

Prospectus
and Application

VMM-1-596CX May 6, 1996

<PAGE>

PROSPECTUS
VISTA(SM) FEDERAL MONEY MARKET FUND
VISTA(SM) CASH MANAGEMENT FUND
VISTA(SM) SHARES

INVESTMENT STRATEGY: CURRENT INCOME

December 29, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Funds in their December 29, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call Chase Global Funds Services Company at 1-800-344-3092. The SAI
has been filed with the Securities and Exchange Commission and is incorporated
into this Prospectus by reference.

INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

<PAGE>

TABLE OF CONTENTS

Expense Summary ................................................ 3
The expenses you pay on your Fund investment, including examples
Financial Highlights ............................................. 4
The Funds' financial history
Fund Objectives and Investment Approach
Vista Federal Money Market Fund ................................. 6
Vista Cash Management Fund .................................... 6
Common Investment Policies ....................................... 6
Management ...................................................... 11
Chase Manhattan Bank, the Funds' adviser; Chase Asset Management
and Texas Commerce Bank, the Funds' sub-advisers
How to Buy, Sell and Exchange Shares ........................... 12
How the Funds Value their Shares ................................. 17
How Dividends and Distributions Are Made; Tax Information ...... 18
How the Funds distribute their earnings, and tax treatment
related to those earnings
Other Information Concerning the Funds ........................... 19
Distribution plans, shareholder servicing agents, administration,
custodian, expenses and organization
Performance Information .......................................... 22
How performance is determined, stated and/or advertised

2
<PAGE>

EXPENSE SUMMARY

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

Vista Federal Vista Cash
Money Market Fund Management Fund
------------------ ---------------
Vista Shares Vista Shares
------------------ ---------------
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee .................. 0.10% 0.10%
12b-1 Fee * .............................. 0.10% n/a
Shareholder Servicing Fee (after estimated
waiver of fee)** ........................ 0.20% 0.33%
Other Expenses ........................... 0.30% 0.16%
Total Fund Operating Expenses (after waivers
of fees)** .............................. 0.70% 0.59%
EXAMPLES
Your investment of $1,000 would incur the
following expenses, assuming 5% annual return:
1 Year .................................... $ 7 $ 6
3 years .................................... 22 19
5 years .................................... 39 33
10 years ................................. 87 74
</TABLE>

* Long-term shareholders in mutual funds with 12b-1 fees, such as
holders of Vista Shares of the Vista Federal Money Market Fund, may pay
more than the economic equivalent of the maximum front-end sales charge
permitted by rules of the National Association of Securities Dealers,
Inc.

** Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Shareholder Servicing Fee would be 0.35% for Vista Federal
Money Market Fund and Vista Cash Management Fund, and Total Fund
Operating Expenses would be 0.85% and 0.61%, respectively. In addition,
Chase has agreed to waive fees payable to it and/or reimburse expenses
for a two year period commencing on May 6, 1996 to the extent necessary
to prevent Total Fund Operating Expenses for Vista Shares of the Vista
Cash Management Fund from exceeding 0.72% of average net assets during
such period.

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

3
<PAGE>

FINANCIAL HIGHLIGHTS

The table set forth below provides selected per share data and ratios for one
Vista Share outstanding throughout each period shown. This information is
supplemented by financial statements and accompanying notes appearing in the
Fund's Annual Report to Shareholders for the fiscal year ended August 31, 1997,
which is incorporated by reference into the SAI. Shareholders may obtain a copy
of this annual report by contacting the Fund or their Shareholder Servicing
Agent. The financial statements and notes, as well as the financial information
set forth in the table below, have been audited by Price Waterhouse LLP,
independent accountants, located at 1177 Avenue of Americas, New York, NY
10036, whose report thereon is included in the Annual Report to Shareholders.

FEDERAL MONEY MARKET FUND

<TABLE>
<CAPTION>
Vista Shares
-------------------------------------------------
Year Year Year 5/9/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94
--------- --------- --------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ---------
Income from Investment Operations:
Net Investment Income .......................................... 0.048 0.048 0.051 0.013
--------- --------- --------- ---------
Total from Investment Operations .............................. 0.048 0.048 0.051 0.013
Less Distributions:
Dividends from Net Investment Income ........................... $ 0.048 0.048 0.051 0.013
--------- --------- --------- ---------
Net Asset Value, End of Period ................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= =========
Total Return ................................................... 4.91% 4.83% 5.20% 1.26%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ........................ $301,031 $352,934 $203,399 $ 19,955
Ratio of Expenses to Average Net Assets# ........................ 0.70% 0.70% 0.69% 0.40%
Ratio of Net Investment Income to Average Net Assets# ......... 4.79% 4.79% 5.16% 4.36%
Ratio of Expenses without waivers and assumption of expenses to
Average Net Assets# .......................................... 0.82% 0.93% 0.93% 1.02%
Ratio of Net Investment Income without waivers and assumptions of
expenses to Average Net Assets# .............................. 4.67% 4.56% 4.92% 3.74%
</TABLE>

* Commencement of offering shares.
# Short periods have been annualized.

4
<PAGE>

FINANCIAL HIGHLIGHTS

On May 3, 1996, the Hanover Cash Management Fund merged into Vista Cash
Management Fund. The table set forth below provides selected per share data and
ratios for one Hanover Cash Management Fund share (the accounting survivor of
the merger) outstanding through May 3, 1996 and one Vista Share of the Vista
Cash Management Fund outstanding for periods thereafter. This information is
supplemented by financial statements and accompanying notes appearing in the
Hanover Cash Management Fund's Annual Report to Shareholders for the fiscal
year ended November 30, 1995 and the Fund's Annual Report to Shareholders for
the period ended August 31, 1996, which are both incorporated by reference into
the SAI. Shareholders may obtain a copy of these annual reports by contacting
the Fund or their Shareholder Servicing Agent. The financial statements and
notes, as well as the financial information set forth in the table below, for
the year ended August 31, 1997 and the period ended August 31, 1996 has been
audited by Price Waterhouse LLP, independent accountants, whose report thereon
is included in the Fund's Annual Report to Shareholders. Periods ended prior to
December 1, 1995 were audited by other independent accountants.

CASH MANAGEMENT FUND

Year 12/1/95
Ended through
8/31/97 8/31/96**
-------------- --------------
PER SHARE
OPERATING
PERFORMANCE
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00
--------- ---------
Income from Investment
Operations:
Net Investment
Income .................. 0.050 0.037
---------- ----------
Less Distributions:
Dividends from Net
Investment Income 0.050 0.037
---------- ----------
Net Asset Value, End of
Period .................. $ 1.00 $ 1.00
========== ==========
Total Return ............... 5.09% 3.69%
Ratios/Supplemental Data
Net Assets, End of Period
(000 omitted) ............ $2,576,142 $1,621,212
Ratio of Expenses to
Average Net Assets# . 0.59% 0.60%
Ratio of Net Investment
Income to Average
Net Assets# ............... 4.99% 4.91%
Ratio of Expenses
without waivers and
assumption of
expenses to Average
Net Assets# ............ 0.62% 0.63%
Ratio of Net Investment
Income without waivers and
assumption of expenses to
Average Net Assets ...... 4.96% 4.88%

<TABLE>
<CAPTION>
Year Ended 1/17/89*
------------------------------------------------------------------------------- through
11/30/95 11/30/94 11/30/93 11/30/92 11/30/91 11/30/90 11/30/89*
-------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE
Net Asset Value, Beginning
of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net Investment
Income .................. 0.054 0.036 0.027 0.035 0.059 0.077 0.076
---------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net
Investment Income 0.054 0.036 0.027 0.035 0.059 0.077 0.076
---------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ======== ======== ======== ======== ======== ========
Total Return ............... 5.49 % 3.62 % 2.74 % 3.51 % 6.01 % 7.94 % 7.83 %
Ratios/Supplemental Data
Net Assets, End of Period
(000 omitted) ............ $1,634,493 $990,045 $861,025 $560,173 $343,166 $196,103 $134,503
Ratio of Expenses to
Average Net Assets# . 0.58 % 0.58 % 0.61 % 0.67 % 0.67 % 0.67 % 0.67 %
Ratio of Net Investment
Income to Average
Net Assets# ............... 5.35 % 3.62 % 2.70 % 3.41 % 5.84 % 7.65 % 8.62 %
Ratio of Expenses
without waivers and
assumption of
expenses to Average
Net Assets# ............ 0.62 % 0.62 % 0.64 % 0.72 % 0.73 % 0.73 % 0.74 %
Ratio of Net Investment
Income without waivers and
assumption of expenses to
Average Net Assets ...... 5.31 % 3.58 % 2.67 % 3.36 % 5.78 % 7.59 % 8.55 %
</TABLE>

* Fund commenced operations January 17, 1989.
** In 1996, the Fund changed its fiscal year end from November 30 to
August 31.
# Short periods have been annualized.

5
<PAGE>

FUND OBJECTIVES AND INVESTMENT APPROACH
- ---------------------------------------
VISTA FEDERAL
MONEY MARKET FUND
The Fund's objective is to provide current income consistent with preservation
of capital and maintenance of liquidity.

Shareholders of the Fund that reside in a state that imposes an income tax
should determine through consultation with their own tax advisors whether such
interest income, when distributed by the Fund, will be considered by the state
to have retained exempt status, and whether the Fund's capital gains and other
income, if any, when distributed will be subject to the state's income tax. See
"How Dividends and Distributions are Made; Tax Information."

VISTA CASH MANAGEMENT FUND
The Fund's objective is to provide maximum current income consistent with the
preservation of capital and the maintenance of liquidity.

6
<PAGE>

Each Fund seeks to maintain a net asset value of $1.00 per share.

The Funds purchase only instruments which have or are deemed to have remaining
maturities of 397 days or less in accordance with federal regulations.

Although each Fund seeks to be fully invested, at times it may hold uninvested
cash reserves, which would adversely affect its yield.

Each Fund is classified as a "diversified" fund under federal securities law.

There can be no assurance that any Fund will achieve its investment objective.

U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest in direct obligations of the
U.S. Treasury. Each Fund may also invest in other obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
(collectively, "U.S. Government Obligations"). Certain U.S. Government
Obligations, such as U.S. Treasury securities and direct pass-through
certificates of the Government National Mortgage Association (GNMA), are backed
by the "full faith and credit" of the U.S. Government. Other U.S. Government
Obligations, such as obligations of Federal Home Loan Banks and the Federal
Home Loan Mortgage Corporation, are not backed by the "full faith and credit"
of the U.S. Government. In the case of securities not backed by the "full faith
and credit" of the U.S. Government, the investor must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the U.S. Government itself in the event
the agency or instrumentality does not meet its commitments.

REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. The Vista Cash Management Fund may enter into agreements to
purchase and resell

7
<PAGE>

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

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.

STRIPS AND ZERO COUPON OBLIGATIONS. Each Fund may invest up to 20% of its total
assets in stripped obligations (i.e., separately traded principal and interest
components of securities) where the underlying obligation is backed by the full
faith and credit of the U.S. Government, including instruments known as
"STRIPS". Vista Cash Management Fund may also invest in zero coupon
obligations. Zero coupon obligations are debt securities that do not pay
regular interest payments, and instead are sold at substantial discounts from
their value at maturity. The value of STRIPS and zero coupon obligations tends
to fluctuate more in response to changes in interest rates than the value of
ordinary interest-paying debt securities with similar maturities. The risk is
greater when the period to maturity is longer.

8
<PAGE>

demand payment of principal and accrued interest upon a specified number of
days' notice from either the issuer or a third party. The securities in which
the Vista Cash Management Fund may invest include participation certificates
and certificates of indebtedness or safekeeping. Participation certificates are
pro rata interests in securities held by others; certificates of indebtedness
or safekeeping are documentary receipts for such original securities held in
custody by others. As a result of the floating or variable rate nature of these
investments, a Fund's yield may decline and it may forego the opportunity for
capital appreciation during periods when interest rates decline; however,
during periods when interest rates increase, a Fund's yield may increase and it
may have reduced risk of capital depreciation. Demand features on certain
floating or variable rate securities may obligate a Fund to pay a "tender fee"
to a third party. Demand features provided by foreign banks involve certain
risks associated with foreign investments.

OTHER MONEY MARKET FUNDS.
Each Fund may invest up to 10% of its total assets in shares of other money
market funds when consistent with its investment objective and policies,
subject to applicable regulatory limitations. Additional fees may be charged by
other money market funds.

9
<PAGE>

invest. Dividends paid by this Fund that are derived from interest on municipal
obligations will be taxable to shareholders for federal income tax purposes.

SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES.
The Fund intends to invest a substantial portion of its assets from time to
time in securities of foreign governments and supranational agencies. The Fund
will limit its investments in foreign government obligations to commercial
paper and other short-term notes issued or guaranteed by the governments of
Western Europe, Australia, New Zealand, Japan and Canada. Obligations of
supranational agencies, such as the International Bank for Reconstruction and
Development (also known as the World Bank) are supported by subscribed, but
unpaid, commitments of member countries. There is no assurance that these
commitments will be undertaken or complied with in the future, and foreign and
supranational securities are subject to certain risks associated with foreign
investing.

LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Funds limit
investment risks for their shareholders. These regulations and restrictions
prohibit each Fund from: (a) with certain limited exceptions, investing more
than 5% of its total assets in the securities of any one issuer (this
limitation does not apply to U.S. Government Obligations; (b) investing more
than 10% of its net assets in illiquid securities (which include securities
restricted as to resale unless they are determined to be readily marketable in
accordance with procedures established by the Board of Trustees); or (c)
investing more than 25% of its total assets in any one industry (excluding U.S.
Government Obligations and bank obligations. A complete description of these
and other investment policies is included in the SAI. Except for each Fund's
investment objective, restriction (c) above and investment policies designated
as fundamental above or in the SAI, the Funds' investment policies are not
fundamental. The Trustees may change any non-fundamental investment policy
without shareholder approval.

10
<PAGE>

a discussion of certain other risks associated with the Funds' additional
investment activities, see "Other Investment Practices" and "Additional
Investment Policies of Vista Cash Management Fund."

MANAGEMENT
- ----------
THE FUNDS' ADVISERS

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Federal Money

11
<PAGE>

Market Fund, under a Sub-Investment Advisory Agreement between CAM and Chase.
CAM is a wholly-owned operating subsidiary of Chase. CAM makes investment
decisions for each of these Funds on a day-to-day basis. For these services,
CAM is entitled to receive a fee, payable by Chase from its advisory fee, at an
annual rate equal to 0.03% of each such Fund's average daily net assets. CAM
provides discretionary investment advisory services to institutional clients.
The same individuals who serve as portfolio managers for Chase also serve as
portfolio managers for CAM. CAM is located at 1211 Avenue of the Americas, New
York, New York 10036.

Texas Commerce Bank, National Association ("TCB") is the sub-investment adviser
to the Vista Cash Management Fund under a Sub-Investment Advisory Agreement
between Chase and TCB. TCB has been in the investment counselling business
since 1987 and is ultimately controlled and owned by The Chase Manhattan
Corporation. TCB makes investment decisions for the Vista Cash Management Fund
on a day-to-day basis. For these services, TCB is entitled to receive a fee,
payable by Chase from its advisory fee, at an annual rate equal to 0.03% of
each such Fund's average daily net assets. TCB is located at 600 Travis,
Houston, Texas 77002.

HOW TO BUY, SELL
AND EXCHANGE SHARES
- -------------------
PURCHASE OF SHARES
The minimum initial investment by a shareholder is $2,500 ($1,000 for IRAs,
SEP-IRAs and the automatic investment plan). There is no minimum for additional
investments. The Fund reserves the right, in its sole discretion, to reject any
purchase order or cease offering shares for purchase at any time. No share
certificates will be issued unless requested in writing. Subscriptions for
shares are subject to acceptance by the Fund and are not binding until
accepted.

Purchase by Mail: Shares of the Fund may be purchased by sending a completed
Application (included with this Prospectus or obtainable from the Fund) to
"Gintel Group", c/o Chase Global Funds Services Company, P.O. Box 2798, Boston,
MA 02208-2798, accompanied by a check payable to Gintel Group in payment for
the shares. Applications sent to the Fund will be forwarded to Chase Global
Funds Services Company and will not be effective until received by Chase Global
Funds Services Company. Special forms are required for IRA and Keogh
subscriptions and may be obtained by contacting the Fund. When purchases are
made by check, redemptions will not be allowed until the purchase check clears,
which may take 15 calendar days or longer. In addition, the redemption of
shares purchased through Automated Clearing House (ACH) will not be allowed
until the payment clears, which may take 7 business days or longer. In the
event a check used to pay for shares is not honored by a bank, the purchase
order will be cancelled and the shareholder will be liable for any losses or
expenses incurred by the Fund.

12
<PAGE>

The Chase Manhattan Bank
New York, NY 10003
ABA# 0210-0002-1
F/B/O The Gintel Group
Acct. # 910-2-732980
Ref: [Name of Fund]
Account Number -----------------

Account Name: ------------------

Purchase by Automatic Investment:

Investors may purchase shares on a regular basis, (the first, the fifteenth, or
the first and fifteenth of each month), by automatically transferring a
specified dollar amount ($100 minimum) from their regular checking or NOW
account to their specified Gintel Group Account. Special forms are required for
this automatic investment plan and may be obtained by contacting the Fund.
Existing shareholders may begin the Plan at any time by sending a signed letter
with signature guarantee and a deposit slip or voided check.

13
<PAGE>

Confirmed purchases will be done only at the discretion of the Investment
Advisor.

Shares are sold without a sales load at the net asset value next determined
after Chase Global Funds Services Company receives your order in proper form on
any business day during which the Federal Reserve Bank of New York and the New
York Stock Exchange are open for business ("Fund Business Day"). To receive
that day's dividend, Chase Global Funds Services Company or your investment
representative or shareholder servicing agent must generally receive your order
prior to a Fund's Cut-off Time. The Funds' Cut-off Times (Eastern time) are as
follows:

Vista Federal
Money Market Fund ...... 2:00 p.m.
Vista Cash
Management Fund ......... 2:00 p.m.

14
<PAGE>

received for shares after a Fund's Cut-off Time and prior to 4:00 p.m., Eastern
time on any Fund Business Day will not be accepted and executed on the same day
except at the Funds' discretion. Orders received and not accepted after a
Fund's Cut-off Time will be considered received prior to the Fund's Cut-off
Time on the following Fund Business Day and processed accordingly. Orders for
shares are accepted by each Fund after funds are converted to federal funds.
Orders paid by check and received before a Fund's Cut-off Time will generally
be available for the purchase of shares the following Fund Business Day. The
Funds reserve the right to reject any purchase order.

Redemption by Mail: Shares may be redeemed by sending a written redemption
request to Gintel Group, c/o Chase Global Funds Services Company, P.O. Box
2798, Boston, MA 02208-2798. Any written request sent to the Fund will be
forwarded to Chase Global Funds Services Company and the effective date of the
redemption request will be when the request is received in proper form by Chase
Global Funds Services Company. The redemption value of each Fund share is the
net asset value per share next computed after the redemption request is
received in proper form. Where share certificates have been issued, a
shareholder must endorse the certificates and include them in the redemption
request. "Proper form" means that the request for redemption must include the
following:

2. Signatures must be guaranteed by an eligible guarantor institution as
described in Rule 17Ad-15 under the Securities and Exchange Act of 1934. Such
institutions include banks, brokers, securities dealers, credit unions,
securities exchanges, clearing agencies and savings associations. On and after
August 24, 1992, the eligible guarantor institution must be a participant in a
recognized signature guarantee program such as the STAMP program of the
Securities Transfer Association. Until August 24, 1992, eligible guarantor
institutions previously approved by Chase Global Funds Services Company
(commercial banks and members of domestic stock exchanges) will continue to be
approved. Eligible guarantor institutions not previously approved by Chase
Global Funds Services Company and not yet members of a recognized signature
guarantee program, must make application to that company. For complete
information or a copy of Chase Global Funds Services Company's

15
<PAGE>

signature guarantee Standards, Procedures and Guidelines, please contact the
Transfer Agent at (800) 344-3092. A notary public is not an acceptable
guarantor.

Redemption by Telephone:
Shareholders who authorize telephone redemptions in the Application may redeem
shares by telephone instructions to Chase Global Funds Services Company which
will wire or mail the proceeds of redemptions to the bank and bank account
number specified in the Application or mail the proceeds to the address of
record, except that telephone redemptions of less than $1000 will be mailed.
Redemptions of $1000 or more will be charged a wire fee (currently $8.00 per
wire) which will be deducted from the account. Any change in the bank account
specified in the Application must be made in writing with a signature guarantee
as described above for redemptions by mail. If an investor selects a telephone
redemption privilege, the investor authorizes Chase Global Funds Services
Company to act on telephone instructions from any person representing himself
or herself to be the investor or the investor's investment representative and
reasonably believed by Chase Global Funds Services Company to be genuine. The
Fund will require Chase Global Funds Services Company to employ reasonable
procedures, such as requiring a form of personal identification, to confirm
that the instructions are genuine and, if it does not follow such procedures,
the Fund may be liable for losses due to unauthorized or fraudulent requests.
An investor agrees, however, that to the extent permitted by applicable law,
neither the Fund nor its agents nor Chase Global Funds Services Company will be
liable for any loss, liability, cost or expense arising out of any redemption
request, including any fraudulent or unauthorized request. For information,
consult Chase Global Fund's Services Company at (800) 344-3092. The telephone
redemption privilege may be modified or terminated without notice.

Automatic Redemptions: A shareholder who owns shares of the Fund with a value
of $10,000 or more may establish a Systematic Withdrawal Plan. The Shareholder
may request a declining balance

16
<PAGE>

withdrawal, a fixed dollar withdrawal, a fixed share withdrawal, or a fixed
percentage withdrawal (based on the current value of the account) on a monthly,
quarterly, semiannual or annual basis. When a shareholder reaches age 591/2 and
begins to receive distributions from an IRA or other retirement plan invested
in the Fund, the shareholder can arrange to have a regular monthly or quarterly
redemptions made under Systematic Withdrawal Plan. In this case it is not
necessary for the account value to be $10,000 or more. Further Information on
establishing a Systematic Withdrawal Plan may be obtained by calling the Fund.

PROCESSING OF
REDEMPTION ORDERS
The Fund generally sends payment for an investor's shares on the Fund Business
Day after the investor's request is received in proper form, provided that the
investor's request is received by the Fund prior to the Fund's Cut-off Time and
assuming that the Fund has collected payment of the purchase price of such
investor's shares. Under unusual circumstances, the Fund may suspend
redemptions, or postpone payment for more than seven business days, as
permitted by federal securities laws.

Confirmed redemptions will be done only at the discretion of the Investment
Advisor.

The portfolio securities of each Fund are valued at their amortized cost in
accordance with federal securities laws, certain requirements of which are
summarized under "Common

17
<PAGE>

Investment Policies." This method increases stability in valuation, but may
result in periods during which the stated value of a portfolio security is
higher or lower than the price a Fund would receive if the instrument were
sold. It is anticipated that the net asset value of each share of each Fund
will remain constant at $1.00 and the Funds will employ specific investment
policies and procedures to accomplish this result, although no assurance can be
given that they will be able to do so on a continuing basis. The Board of
Trustees will review the holdings of each Fund at intervals it deems
appropriate to determine whether that Fund's net asset value calculated by
using available market quotations (or an appropriate substitute which reflects
current market conditions) deviates from $1.00 per share based upon amortized
cost. In the event the Trustees determine that a deviation exists that may
result in material dilution or other unfair results to investors or existing
shareholders, the Trustees will take such corrective action as they regard as
necessary and appropriate.

HOW DIVIDENDS AND
DISTRIBUTIONS ARE MADE;
TAX INFORMATION
- ---------------
The net investment income of each class of shares of each Fund is declared as a
dividend to the shareholders each Fund Business Day. Dividends are declared as
of the time of day which corresponds to the latest time on that day that a
Fund's net asset value is determined. Shares begin accruing dividends on the
day they are purchased. Dividends are distributed monthly. Unless a shareholder
arranges to receive dividends in cash or by ACH to a pre-established bank
account, dividends are distributed in the form of additional shares. Dividends
that are otherwise taxable are still taxable to you whether received in cash or
additional shares. Net realized short-term capital gains, if any, will be
distributed at least annually. The Funds do not expect to realize net long-term
capital gains.

TAXATION OF DISTRIBUTIONS.
All Fund distributions of net investment income will be taxable as ordinary
income. Any distributions of net capital gain which are designated as "capital
gain dividends" will be taxable as long-term capital gain, regardless of how
long you have held your shares. The taxation of your distributions will be the
same whether received in cash or in shares through the reinvestment of
distributions.

18
<PAGE>

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

OTHER INFORMATION
CONCERNING THE FUNDS
- --------------------
DISTRIBUTION PLANS

The Funds' distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Federal
Money Market Fund has adopted a Rule 12b-1 distribution plan which provides
that such Fund will pay distribution fees at annual rates of up to 0.10% of the
average daily net assets attributable to its Vista Shares. There is no
distribution plan for the Vista Cash Management Fund. Payments under the
distribution plan shall be used to compensate or reimburse the Fund's
distributor and broker-dealers for services provided and expenses incurred in
connection with the sale of Vista Shares, and are not tied to the amount of
actual expenses incurred. Promotional activities for the sale of Vista Shares
will be conducted generally by the Vista Family of Funds, and activities
intended to promote a Fund's Vista Shares may also benefit the Fund's other
shares and other Vista funds.

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

SHAREHOLDER
SERVICING AGENTS

19
<PAGE>

held by investors for whom the shareholder servicing agent maintains a
servicing relationship. Shareholder servicing agents may subcontract with other
parties for the provision of shareholder support services. The Board of
Trustees has determined that the amount payable in respect of "service fees"
(as defined in the NASD Rules of Fair Practice) does not exceed 0.25% of the
average annual net assets attributable to the Vista Shares of each Fund.

Chase may from time to time, at its own expense, provide compensation to
certain selected dealers for performing administrative services for their
customers. These services include maintaining account records, processing
orders to purchase, redeem and exchange Fund shares and responding to certain
customer inquiries. The amount of such compensation may be up to 0.10% annually
of the average net assets of a Fund attributable to shares of such Fund held by
customers of such selected dealers. Such compensation does not represent an
additional expense to a Fund or its shareholders, since it will be paid by
Chase.

ADMINISTRATOR
AND SUB-ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.05% of each Fund's
average daily net assets.

20
<PAGE>

CUSTODIAN

TRANSFER AGENT AND
DIVIDEND PAYING AGENT
DST Systems, Inc. located at 210 W. 10th Street, Kansas City, MO 64105 serves
as the Funds' transfer agent and dividend paying agent.

21
<PAGE>

shares held in the treasury of the Trust shall not be voted. Shares of each
class of a Fund generally vote together except when required under federal
securities laws to vote separately on matters that only affect a particular
class, such as the approval of distribution plans for a particular class. Fund
shares will be maintained in book entry form, and no certificates representing
shares owned will be issued to shareholders.

Each Fund may issue multiple classes of shares. This Prospectus relates only to
Vista Shares of the Funds. Certain Funds offer other classes of shares in
addition to these classes. The categories of investors that are eligible to
purchase shares and minimum investment requirements may differ for each class
of the Fund's shares. In addition, other classes of Fund shares may be subject
to differences in sales charge arrangements, ongoing distribution and service
fee levels, and levels of certain other expenses, which would affect the
relative performance of the different classes. Investors may call 1-800-
344-3092 to obtain additional information about other classes of shares of the
Funds that are offered. Any person entitled to receive compensation for selling
or servicing shares of a Fund may receive different levels of compensation with
respect to one class of shares over another.

Investment performance may from time to time be included in advertisements
about the Funds. Performance is calculated separately for each class of shares.
Because this

22
<PAGE>

performance information is based on historical earnings, it should not be
considered as an indication or representation of future performance. Investment
performance, which will vary, is based on many factors, including market
conditions, the composition of each Fund's portfolio, each Fund's operating
expenses and which class of shares you purchase. Investment performance also
reflects the risks associated with each Fund's investment objective and
policies. These factors should be considered when comparing each Fund's
investment results to those of other mutual funds and investment vehicles.
Quotations of investment performance for any period when an expense limitation
was in effect will be greater if the limitation had not been in effect. Each
Fund's performance may be compared to other mutual funds, relevant indices and
rankings prepared by independent services. See the SAI.

<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
December 29, 1997

VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
VISTA(SM) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
VISTA(SM) CASH MANAGEMENT FUND
VISTA(SM) PRIME MONEY MARKET FUND
VISTA(SM) FEDERAL MONEY MARKET FUND
VISTA(SM) TREASURY PLUS MONEY MARKET FUND
VISTA(SM) TAX FREE MONEY MARKET FUND
VISTA(SM) CALIFORNIA TAX FREE MONEY MARKET FUND
VISTA(SM) NEW YORK TAX FREE MONEY MARKET FUND
VISTA(SM) TAX FREE INCOME FUND
VISTA(SM) NEW YORK TAX FREE INCOME FUND
VISTA(SM) CALIFORNIA INTERMEDIATE TAX FREE INCOME FUND

One Chase Manhattan Plaza, Third Floor, New York, New York 10081

This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Prospectuses offering shares of the Funds. This Statement of Additional
Information should be read in conjunction with the Prospectuses offering shares
of Vista Tax Free Income Fund, Vista California Intermediate Tax Free Income
Fund and Vista New York Tax Free Income Fund (collectively the "Income Funds"),
and Vista U.S. Government Money Market Fund, Vista 100% U.S. Treasury
Securities Money Market Fund, Vista Cash Management Fund, Vista Prime Money
Market Fund, Vista Federal Money Market Fund, Vista Treasury Plus Money Market,
Vista Tax Free Money Market Fund, Vista California Tax Free Money Market Fund
and Vista New York Tax Free Money Market Fund (collectively the "Money Market
Funds"). Any reference to a "Prospectus" in this Statement of Additional
Information is a reference to one or more of the foregoing Prospectuses, as the
context requires. Copies of each Prospectus may be obtained by an investor
without charge by contacting Vista Fund Distributors, Inc. ("VFD"), the Funds'
distributor (the "Distributor"), at the above-listed address.

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

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

1-800-622-4273
Vista Service Center
P.O. Box 419392
Kansas City, MO 64141

MFT-SAI
<PAGE>

<TABLE>
<CAPTION>
Table of Contents
Page
- --------------------------------------------------------------------------------
<S> <C>
The Funds ................................................................. 3
Investment Policies and Restrictions ..................................... 4
Performance Information ................................................... 20
Determination of Net Asset Value ......................................... 26
Purchases, Redemptions and Exchanges ..................................... 27
Tax Matters ............................................................... 29
Management of the Trust and Funds ......................................... 34
Independent Accountants ................................................... 50
Certain Regulatory Matters ............................................... 50
General Information ....................................................... 51
Appendix A--Description of Certain Obligations Issued or
Guaranteed by U.S. Government Agencies or Instrumentalities ............ A-1
Appendix B--Description of Ratings ....................................... B-1
Appendix C--Special Investment Considerations
Relating to New York Municipal Obligations ............................... C-1
Appendix D--Special Investment Considerations Relating to
California Municipal Obligations......................................... D-1
</TABLE>

2
<PAGE>

THE FUNDS

Mutual Fund Trust (the "Trust") is an open-end management investment
company which was organized as a business trust under the laws of the
Commonwealth of Massachusetts on February 4, 1994. The Trust presently consists
of 12 separate series (the "Funds"). Certain of the Funds are diversified and
other Funds are non-diversified, as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). The shares of the Funds are
collectively referred to in this Statement of Additional Information as the
"Shares." The Income Funds, Tax Free Money Market Fund, New York Tax Free Money
Market Fund and California Tax Free Money Market Fund are collectively referred
to herein as the "Tax Free Funds."

On August 25, 1994, the shareholders of each of the existing classes of
Shares of the Vista U.S. Government Money Market Fund, Vista Global Money
Market Fund, Vista Prime Money Market Fund, Vista Tax Free Money Market Fund,
Vista California Money Market Fund, Vista New York Tax Free Money Market Fund,
Vista Tax Free Income Fund, Vista New York Tax Free Income Fund and the Vista
California Intermediate Tax Free Income Fund approved the reorganization of
each of such Funds into newly-created series of Mutual Fund Trust, effective
October 28, 1994. Prior to such approvals, each of such Funds were series of
Mutual Fund Group, an affiliated investment company.

On December 4, 1992, the shareholders of each of the existing classes of
Shares of Vista Global Money Market Fund and Vista U.S. Government Money Market
Fund approved the reorganization of each of such Funds into newly-created
series of Mutual Fund Group, effective January 1, 1993. Prior to such
approvals, on December 4, 1992, the shareholders of each of the five existing
series of Trinity Assets Trust (Trinity Money Market Fund, Trinity Government
Fund, Trinity Bond Fund, Trinity Short-Term Bond Fund and Trinity Equity Fund)
(collectively, the "Trinity Funds") approved the reorganization of each of the
Trinity Funds into newly-created series of the Trust, effective January 1,
1993. Vista Global Money Market Fund and Trinity Money Market Fund were
reorganized into classes of Shares of "Vista Worldwide Money Market Fund",
which changed its name to "Vista Global Money Market Fund" as of December 31,
1992. Vista U.S. Government Money Market Fund and Trinity Government Fund were
reorganized into classes of Shares of "Vista Government Cash Fund", which
changed its name to "Vista U.S. Government Money Market Fund" as of December
31, 1992.

On May 3, 1996, The U.S. Treasury Money Market Fund of The Hanover Funds,
Inc. ("Hanover") merged into the Vista Shares of Treasury Plus Money Market
Fund, The Government Money Market Fund of Hanover merged into the Vista Shares
of U.S. Government Money Market Fund, The Cash Management Fund of Hanover
merged into the Vista Shares of Vista Global Money Market Fund (The Cash
Management Fund of Hanover was the accounting survivor of this merger), The Tax
Free Money Market Fund of Hanover merged into the Vista Shares of Tax Free
Money Market Fund, The New York Tax Free Money Market Fund of Hanover merged
into the Vista Shares of New York Tax Free Money Market Fund, and The 100% U.S.
Treasury Securities Money Market Fund of Hanover merged into the Vista Shares
of The 100% U.S. Treasury Securities Money Market Fund. The foregoing mergers
are referred to herein as the "Hanover Reorganization."

Effective as of May 6, 1996, Vista Global Money Market Fund changed its
name to Vista Cash Management Fund.

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

3
<PAGE>

INVESTMENT POLICIES AND RESTRICTIONS

Investment Policies

The Prospectuses set forth the various investment policies applicable to
each Fund. The following information supplements and should be read in
conjunction with the related sections of each Prospectus. As used in this
Statement of Additional Information, with respect to those Funds and policies
for which they apply, the terms "Municipal Obligations" and "tax-exempt
securities" have the meanings given to them in the relevant Fund's Prospectus.
For descriptions of the securities ratings of Moody's Investors Service, Inc.
("Moody's"), Standard & Poor's Corporation ("S&P") and Fitch Investors Service,
Inc. ("Fitch"), see Appendix B. For a general discussion of special investment
considerations relating to investing in (i) New York and (ii) California
Municipal Obligations, see Appendices C and D, respectively.

The management style used for the Funds emphasizes several key factors.
Portfolio managers consider the security quality that is, the ability of the
debt issuer to make timely payments of principal and interest. Also important
in the analysis is the relationship of a bond's yield and its maturity, in
which the managers evaluate the risks of investing in long-term higher-yielding
securities. Managers also use a computer model to simulate possible
fluctuations in prices and yields if interest rates change. Another step in the
analysis is comparing yields on different types of securities to determine
relative risk/reward profiles.

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

In addition, certain U.S. Government agencies and instrumentalities issue
specialized types of securities, such as guaranteed notes of the Small Business
Administration, Federal Aviation Administration, Department of Defense, Bureau
of Indian Affairs and Private Export Funding Corporation, which often provide
higher yields than are available from the more common types of
government-backed instruments.

4
<PAGE>

However, such specialized instruments may only be available from a few sources,
in limited amounts, or only in very large denominations; they may also require
specialized capability in portfolio servicing and in legal matters related to
government guarantees. While they may frequently offer attractive yields, the
limited-activity markets of many of these securities means that, if a Fund were
required to liquidate any of them, it might not be able to do so
advantageously; accordingly, each Fund investing in such securities intends
normally to hold such securities to maturity or pursuant to repurchase
agreements, and would treat such securities (including repurchase agreements
maturing in more than seven days) as illiquid for purposes of its limitation on
investment in illiquid securities.

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

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

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

Commercial Paper and Other Short-Term Obligations. The commercial paper
and other short-term obligations of U.S. and foreign corporations which may be
purchased by the Vista Prime Money Market Fund and the Vista Cash Management
Fund, other than those of bank holding companies, include obligations which are
(i) rated Prime-1 by Moody's, A-1 by S&P, or F-1 by Fitch, or comparably rated
by another NRO; or (ii) determined by the advisers to be of comparable quality
to those rated obligations which may be purchased by the Vista Prime Money
Market Fund and the Vista Cash Management Fund at the date of purchase or which
at the date of purchase have an outstanding debt issue rated in the highest
rating category by Moody's, S&P, Fitch or another NRO. The commercial paper and
other short-term obligations of U.S. banks holding companies which may be
purchased by the Vista Prime Money Market Fund and the Vista Cash Management
Fund include obligations issued or guaranteed by bank holding companies with
total assets

5
<PAGE>

exceeding $1 billion. For purposes of the size standards with respect to banks
and bank holding companies, "total deposits" and "total assets" are determined
on an annual basis by reference to an institution's then most recent annual
financial statements.

Repurchase Agreements. A Fund will enter into repurchase agreements only
with member banks of the Federal Reserve System and securities dealers believed
creditworthy, and only if fully collateralized by securities in which such Fund
is permitted to invest. Under the terms of a typical repurchase agreement, a
Fund would acquire an underlying debt instrument for a relatively short period
(usually not more than one week) subject to an obligation of the seller to
repurchase the instrument and the Fund to resell the instrument at a fixed
price and time, thereby determining the yield during the Fund's holding period.
This procedure results in a fixed rate of return insulated from market
fluctuations during such period. A repurchase agreement is subject to the risk
that the seller may fail to repurchase the security. Repurchase agreements are
considered under the 1940 Act to be loans collateralized by the underlying
securities. All repurchase agreements entered into by a Fund will be fully
collateralized at all times during the period of the agreement in that the
value of the underlying security will be at least equal to 100% of the amount
of the loan, including the accrued interest thereon, and the Fund or its
custodian or sub-custodian will have possession of the collateral, which the
Board of Trustees believes will give it a valid, perfected security interest in
the collateral. Whether a repurchase agreement is the purchase and sale of a
security or a collateralized loan has not been conclusively established. This
might become an issue in the event of the bankruptcy of the other party to the
transaction. In the event of default by the seller under a repurchase agreement
construed to be a collateralized loan, the underlying securities would not be
owned by a Fund, but would only constitute collateral for the seller's
obligation to pay the repurchase price. Therefore, a Fund may suffer time
delays and incur costs in connection with the disposition of the collateral.
The Board of Trustees believes that the collateral underlying repurchase
agreements may be more susceptible to claims of the seller's creditors than
would be the case with securities owned by a Fund. Repurchase agreements will
give rise to income which will not qualify as tax-exempt income when
distributed by a Tax Free Fund. Repurchase agreements maturing in more than
seven days are treated as illiquid for purposes of the Funds' restrictions on
purchases of illiquid securities. Repurchase agreements are also subject to the
risks described below with respect to stand-by commitments.

Reverse Repurchase Agreements. Reverse repurchase agreements involve sales
of portfolio securities of a Fund to member banks of the Federal Reserve System
or securities dealers believed creditworthy, concurrently with an agreement by
such Fund to repurchase the same securities at a later date at a fixed price
which is generally equal to the original sales price plus interest. A Fund
retains record ownership and the right to receive interest and principal
payments on the portfolio security involved.

High Quality Municipal Obligations. Investments by the Tax Free Money
Market Funds will be made in unrated Municipal Obligations only if they are
determined to be of comparable quality to permissable rated investments on the
basis of the advisers' credit evaluation of the obligor or of the bank issuing
a participation certificate, letter of credit or guaranty, or insurance issued
in support of the obligation. High Quality instruments may produce a lower
yield than would be available from less highly rated instruments. The Board of
Trustees has determined that Municipal Obligations which are backed by the
credit of the U.S. Government will be considered to have a rating equivalent to
Moody's Aaa.

If, subsequent to purchase by a Tax Free Money Market Fund, (a) an issue
of rated Municipal Obligations ceases to be rated in the highest short-term
rating category (the two highest categories in the case of the New York and
California Tax Free Money Market Funds) by at least two rating organizations
(or one rating organization if the instrument was rated by only one such
organization) or the Board of Trustees determines that it is no longer of
comparable quality or (b) a Money Market Fund's advisers become aware that any
portfolio security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Board of Trustees will reassess

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<PAGE>

promptly whether such security presents minimal credit risk and will cause such
Money Market Fund to take such action as it determines is in its best interest
and that of its shareholders; provided that the reassessment required by clause
(b) is not required if the portfolio security is disposed of or matures within
five business days of the advisers becoming aware of the new rating and the
Fund's Board is subsequently notified of the adviser's actions.

To the extent that a rating given by Moody's, S&P or Fitch for Municipal
Obligations may change as a result of changes in such organizations or their
rating systems, the Funds will attempt to use comparable ratings as standards
for their investments in accordance with the investment policies contained in
the Prospectuses and this Statement of Additional Information. The ratings of
Moody's, S&P and Fitch represent their opinions as to the quality of the
Municipal Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial criterion for
selection of portfolio investments, the advisers also will evaluate these
securities and the creditworthiness of the issuers of such securities.

Forward Commitments. In order to invest a Fund's assets immediately, while
awaiting delivery of securities purchased on a forward commitment basis,
short-term obligations that offer same-day settlement and earnings will
normally be purchased. Although, with respect to any Tax Free Fund, short-term
investments will normally be in tax-exempt securities or Municipal Obligations,
short-term taxable securities or obligations may be purchased if suitable
short-term tax-exempt securities or Municipal Obligations are not available.
When a commitment to purchase a security on a forward commitment basis is made,
procedures are established consistent with the General Statement of Policy of
the Securities and Exchange Commission concerning such purchases. Since that
policy currently recommends that an amount of the respective Fund's assets
equal to the amount of the purchase be held aside or segregated to be used to
pay for the commitment, a separate account of such Fund consisting of cash,
cash equivalents or high quality debt securities equal to the amount of such
Fund's commitments will be established at such Fund's custodian bank. For the
purpose of determining the adequacy of the securities in the account, the
deposited securities will be valued at market value. If the market value of
such securities declines, additional cash, cash equivalents or highly liquid
securities will be placed in the account daily so that the value of the account
will equal the amount of such commitments by the respective Fund.

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

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

Illiquid Securities. For purposes of its limitation on investments in
illiquid securities, each Fund may elect to treat as liquid, in accordance with
procedures established by the Board of Trustees, certain invest-

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

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

Stand-by Commitments. When a Fund purchases securities it may also acquire
stand-by commitments with respect to such securities. Under a stand-by
commitment, a bank, broker-dealer or other financial institution agrees to
purchase at a Fund's option a specified security at a specified price.

The amount payable to a Money Market Fund upon its exercise of a stand-by
commitment with respect to a Municipal Obligation normally would be (i) the
acquisition cost of the Municipal Obligation (excluding any accrued interest
paid by the Fund on the acquisition), less any amortized market premium or plus
any amortized market or original issue discount during the period the Fund
owned the security, plus (ii) all interest accrued on the security since the
last interest payment date during the period the security was owned by the
Fund. Absent unusual circumstances relating to a change in market value, a
Money Market Fund would value the underlying Municipal Obligation at amortized
cost. Accordingly, the amount payable by a bank or dealer during the time a
stand-by commitment is exercisable would be substantially the same as the
market value of the underlying Municipal Obligation. The Money Market Funds
value stand-by commitments at zero for purposes of computing their net asset
value per share.

The stand-by commitments that may be entered into by the Funds are subject
to certain risks, which include the ability of the issuer of the commitment to
pay for the securities at the time the commitment is exercised, the fact that
the commitment is not marketable by a Fund, and that the maturity of the
underlying security will generally be different from that of the commitment.
Not more than 10% of the total assets of a Money Market Fund will be invested
in Municipal Obligations that are subject to stand-by commitments from the same
bank or broker-dealer.

Floating and Variable Rate Securities; Participation Certificates.
Floating and variable rate demand instruments permit the holder to demand
payment upon a specified number of days' notice of the unpaid principal balance
plus accrued interest either from the issuer or by drawing on a bank letter of
credit, a guarantee or insurance issued with respect to such instrument.
Investments by the Income Funds in floating or variable rate securities
normally will involve industrial development or revenue bonds that provide for
a periodic adjustment in the interest rate paid on the obligation and may, but
need not, permit the holder to demand payment as described above. While there
is usually no established secondary market for issues of

8
<PAGE>

these types of securities, the dealer that sells an issue of such security
frequently will also offer to repurchase the securities at any time at a
repurchase price which varies and may be more or less than the amount the
holder paid for them. The floating or variable rate demand instruments in which
the Money Market Funds may invest are payable on demand on not more than seven
calendar days' notice.

The terms of these types of securities provide that interest rates are
adjustable at intervals ranging from daily to up to six months and the
adjustments are based upon the prime rate of a bank or other short-term rates,
such as Treasury Bills or LIBOR (London Interbank Offered Rate), as provided in
the respective instruments. The Funds will decide which floating or variable
rate securities to purchase in accordance with procedures prescribed by Board
of Trustees of the Trust in order to minimize credit risks.

In the case of a Money Market Fund, the Board of Trustees may determine
that an unrated floating or variable rate security meets the Fund's high
quality criteria if it is backed by a letter of credit or guarantee or is
insured by an insurer that meets such quality criteria, or on the basis of a
credit evaluation of the underlying obligor. If the credit of the obligor is of
"high quality", no credit support from a bank or other financial institution
will be necessary. The Board of Trustees will re-evaluate each unrated floating
or variable rate security on a quarterly basis to determine that it continues
to meet a Money Market Fund's high quality criteria. If an instrument is ever
deemed to fall below a Money Market Fund's high quality standards, either it
will be sold in the market or the demand feature will be exercised.

The securities in which certain Funds may be invested include
participation certificates, issued by a bank, insurance company or other
financial institution, in securities owned by such institutions or affiliated
organizations ("Participation Certificates"). A Participation Certificate gives
a Fund an undivided interest in the security in the proportion that the Fund's
participation interest bears to the total principal amount of the security and
generally provides the demand feature described below. Each Participation
Certificate is backed by an irrevocable letter of credit or guaranty of a bank
(which may be the bank issuing the Participation Certificate, a bank issuing a
confirming letter of credit to that of the issuing bank, or a bank serving as
agent of the issuing bank with respect to the possible repurchase of the
certificate of participation) or insurance policy of an insurance company that
the Board of Trustees of the Trust has determined meets the prescribed quality
standards for a particular Fund.

A Fund may have the right to sell the Participation Certificate back to
the institution and draw on the letter of credit or insurance on demand after
the prescribed notice period, for all or any part of the full principal amount
of the Fund's participation interest in the security, plus accrued interest.
The institutions issuing the Participation Certificates would retain a service
and letter of credit fee and a fee for providing the demand feature, in an
amount equal to the excess of the interest paid on the instruments over the
negotiated yield at which the Participation Certificates were purchased by a
Fund. The total fees would generally range from 5% to 15% of the applicable
prime rate or other short-term rate index. With respect to insurance, a Fund
will attempt to have the issuer of the Participation Certificate bear the cost
of any such insurance, although the Funds retain the option to purchase
insurance if deemed appropriate. Obligations that have a demand feature
permitting a Fund to tender the obligation to a foreign bank may involve
certain risks associated with foreign investment. A Fund's ability to receive
payment in such circumstances under the demand feature from such foreign banks
may involve certain risks such as future political and economic developments,
the possible establishments of laws or restrictions that might adversely affect
the payment of the bank's obligations under the demand feature and the
difficulty of obtaining or enforcing a judgment against the bank.

The advisers have been instructed by the Board of Trustees to monitor on
an ongoing basis the pricing, quality and liquidity of the floating and
variable rate securities held by the Funds, including Participation
Certificates, on the basis of published financial information and reports of
the rating agencies and other bank analytical services to which the Funds may
subscribe. Although these instruments may be sold by a Fund, it is intended
that they be held until maturity. Participation Certificates will only be
purchased by a Tax Free

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<PAGE>

Fund if, in the opinion of counsel to the issuer, interest income on such
instruments will be tax-exempt when distributed as dividends to shareholders of
such Fund.

Past periods of high inflation, together with the fiscal measures adopted
to attempt to deal with it, have seen wide fluctuations in interest rates,
particularly "prime rates" charged by banks. While the value of the underlying
floating or variable rate securities may change with changes in interest rates
generally, the floating or variable rate nature of the underlying floating or
variable rate securities should minimize changes in value of the instruments.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation and the risk of potential capital depreciation is less than would
be the case with a portfolio of fixed rate securities. A Fund's portfolio may
contain floating or variable rate securities on which stated minimum or maximum
rates, or maximum rates set by state law, limit the degree to which interest on
such floating or variable rate securities may fluctuate; to the extent it does,
increases or decreases in value may be somewhat greater than would be the case
without such limits. Because the adjustment of interest rates on the floating
or variable rate securities is made in relation to movements of the applicable
banks' "prime rates" or other short-term rate adjustment indices, the floating
or variable rate securities are not comparable to long-term fixed rate
securities. Accordingly, interest rates on the floating or variable rate
securities may be higher or lower than current market rates for fixed rate
obligations of comparable quality with similar maturities.

The maturity of variable rate securities is deemed to be the longer of (i)
the notice period required before a Fund is entitled to receive payment of the
principal amount of the security upon demand or (ii) the period remaining until
the security's next interest rate adjustment. With respect to a Money Market
Fund, the maturity of a variable rate demand instrument will be determined in
the same manner for purposes of computing the Fund's dollar-weighted average
portfolio maturity. With respect to the Income Funds, if variable rate
securities are not redeemed through the demand feature, they mature on a
specified date which may range up to thirty years from the date of issuance.

Tender Option Floating or Variable Rate Certificates. The Money Market
Funds may invest in tender option bonds. A tender option bond is a synthetic
floating or variable rate security issued when long term bonds are purchased in
the secondary market and are then deposited into a trust. Custodial receipts
are then issued to investors, such as the Funds, evidencing ownership interests
in the trust. The trust sets a floating or variable rate on a daily or weekly
basis which is established through a remarketing agent. These types of
instruments, to be money market eligible under Rule 2a-7, must have a liquidity
facility in place which provides additional comfort to the investors in case
the remarketing fails. The sponsor of the trust keeps the difference between
the rate on the long term bond and the rate on the short term floating or
variable rate security.

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

Securities Loans. To the extent specified in its Prospectus, each Fund is
permitted to lend its securities to broker-dealers and other institutional
investors in order to generate additional income. Such loans of portfolio
securities may not exceed 30% of the value of a Fund's total assets. In
connection with such loans, a Fund will receive collateral consisting of cash,
cash equivalents, U.S. Government securities or irrevocable letters of credit
issued by financial institutions. Such collateral will be maintained at all
times in an amount equal to at least 100% of the current market value plus
accrued interest of the securities loaned. A Fund can increase its income
through the investment of such collateral. A Fund continues to be entitled to
the interest

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<PAGE>

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

Zero Coupon and Stripped Obligations. The principal and interest
components of United States Treasury bonds with remaining maturities of longer
than ten years are eligible to be traded independently under the Separate
Trading of Registered Interest and Principal of Securities ("STRIPS") program.
Under the STRIPS program, the principal and interest components are separately
issued by the United States Treasury at the request of depository financial
institutions, which then trade the component parts separately. The interest
component of STRIPS may be more volatile than that of United States Treasury
bills with comparable maturities.

Zero coupon obligations are sold at a substantial discount from their
value at maturity and, when held to maturity, their entire return, which
consists of the amortization of discount, comes from the difference between
their purchase price and maturity value. Because interest on a zero coupon
obligation is not distributed on a current basis, the obligation tends to be
subject to greater price fluctuations in response to changes in interest rates
than are ordinary interest-paying securities with similar maturities. The value
of zero coupon obligations appreciates more than such ordinary interest-paying
securities during periods of declining interest rates and depreciates more than
such ordinary interest-paying securities during periods of rising interest
rates. Under the stripped bond rules of the Internal Revenue Code of 1986, as
amended, investments in zero coupon obligations will result in the accrual of
interest income on such investments in advance of the receipt of the cash
corresponding to such income.

Zero coupon securities may be created when a dealer deposits a U.S.
Treasury or federal agency security with a custodian and then sells the coupon
payments and principal payment that will be generated by this security
separately. Proprietary receipts, such as Certificates of Accrual on Treasury
Securities, Treasury Investment Growth Receipts and generic Treasury Receipts,
are examples of stripped U.S. Treasury securities separated into their
component parts through such custodial arrangements.

Additional Policies Regarding Derivative and Related Transactions

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

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

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<PAGE>

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

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

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

Risk Factors. As explained more fully below and in the discussions of
particular strategies or instruments, there are a number of risks associated
with the use of derivatives and related instruments. There can be no guarantee
that there will be a correlation between price movements in a hedging vehicle
and in the portfolio assets being hedged. An incorrect correlation could result
in a loss on both the hedged assets in a Fund and the hedging vehicle so that
the portfolio return might have been greater had hedging not been attempted.
The advisers may accurately forecast interest rates, market values or other
economic factors in utilizing a derivatives strategy. In such a case, the Fund
may have been in a better position had it not entered into such strategy.
Hedging strategies, while reducing risk of loss, can also reduce the
opportunity for gain. In other words, hedging usually limits both potential
losses as well as potential gains. Strategies not involving hedging may
increase the risk to a Fund. Certain strategies, such as yield enhancement, can
have speculative characteristics and may result in more risk to a Fund than
hedging strategies using the same instruments. There can be no assurance that a
liquid market will exist at a time when a Fund seeks to close out an option,
futures contract or other derivative or related position. Many exchanges and
boards of trade limit the amount of fluctuation permitted in option or futures
contract prices during a single day; once the daily limit has been reached on
particular contract, no trades may be made that day at a price beyond that
limit. In addition, certain instruments are relatively new and without a
significant trading history. As a result, there is no assurance that an active
secondary market will develop or continue to exist. Finally, over-the-counter
instruments typically do not have a liquid market. Lack of a liquid market for
any reason may prevent a Fund from liquidating an unfavorable position.
Activities of large traders in the futures and securities markets involving
arbitrage, "program trading," and other investment strategies may cause price
distortions in these markets. In certain instances, particularly those
involving over-the-counter transactions, forward contracts there is a greater
potential that a counterparty or broker may default or be unable to perform on
its commitments. In the event of such a default, a Fund may experience a loss.

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

Options on Securities and Securities Indexes. The Funds may PURCHASE, SELL
or EXERCISE call and put options on (i) securities, (ii) securities indexes,
and (iii) debt instruments.

Although in most cases these options will be exchange-traded, the Funds
may also purchase, sell or exercise over-the-counter options. Over-the-counter
options differ from exchange-traded options in that they

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<PAGE>

are two-party contracts with price and other terms negotiated between buyer and
seller. As such, over-the-counter options generally have much less market
liquidity and carry the risk of default or nonperformance by the other party.

One purpose of purchasing put options is to protect holdings in an
underlying or related security against a substantial decline in market value.
One purpose of purchasing call options is to protect against substantial
increases in prices of securities a Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. A Fund may also use
combinations of options to minimize costs, gain exposure to markets or take
advantage of price disparities or market movements. For example, a Fund may
sell put or call options it has previously purchased or purchase put or call
options it has previously sold. These transactions may result in a net gain or
loss depending on whether the amount realized on the sale is more or less than
the premium and other transaction costs paid on the put or call option which is
sold. A Fund may write a call or put option in order to earn the related
premium from such transactions. Prior to exercise or expiration, an option may
be closed out by an offsetting purchase or sale of a similar option.

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

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

Futures Contracts and Options on Futures Contracts. The Funds may purchase
or sell (i) interest-rate futures contracts, (ii) futures contracts on
specified instruments or indices, and (iii) options on these futures contracts
("futures options").

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

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

When writing or purchasing options, the Funds may simultaneously enter
into other transactions involving futures contracts or futures options in order
to minimize costs, gain exposure to markets, or take

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<PAGE>

advantage of price disparities or market movements. Such strategies may entail
additional risks in certain instances. Funds may engage in cross-hedging by
purchasing or selling futures or options on a security different from the
security position being hedged to take advantage of relationships between the
two securities.

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

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

Interest Rate Transactions. The Income Funds may employ interest rate
management techniques, including transactions in options (including yield curve
options), futures, options on futures, forward exchange contracts, and interest
rate swaps.

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

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

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

The Income Funds may also invest in other types of structured products,
including, among others, inverse floaters, spread trades and notes linked by a
formula to the price of an underlying instrument. Inverse floaters have coupon
rates that vary inversely at a multiple of a designated floating rate (which
typically is determined by reference to an index rate, but may also be
determined through a dutch auction or a remarketing agent or by reference to
another security) (the "reference rate"). As an example, inverse floaters may
constitute a class of CMOs with a coupon rate that moves inversely to a
designated index, such as LIBOR (London Interbank Offered Rate) or the cost of
Funds Index. Any rise in the reference rate of an inverse floater

14
<PAGE>

(as a consequence of an increase in interest rates) causes a drop in the coupon
rate while any drop in the reference rate of an inverse floater causes an
increase in the coupon rate. A spread trade is an investment position relating
to a difference in the prices or interest rates of two securities where the
value of the investment position is determined by movements in the difference
between the prices or interest rates, as the case may be, of the respective
securities. When an Income Fund invests in notes linked to the price of an
underlying instrument, the price of the underlying security is determined by a
multiple (based on a formula) of the price of such underlying security. A
structured product may be considered to be leveraged to the extent its interest
rate varies by a magnitude that exceeds the magnitude of the change in the
index rate of interest. Because they are linked to their underlying markets or
securities, investments in structured products generally are subject to greater
volatility than an investment directly in the underlying market or security.
Total return on the structured product is derived by linking return to one or
more characteristics of the underlying instrument. Because certain structured
products of the type in which the Income Fund anticipates it will invest may
involve no credit enhancement, the credit risk of those structured products
generally would be equivalent to that of the underlying instruments. An Income
Fund is permitted to invest in a class of structured products that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured products typically have higher yields and present
greater risks than unsubordinated structured products. Although an Income
Fund's purchase of subordinated structured products would have similar economic
effect to that of borrowing against the underlying securities, the purchase
will not be deemed to be leverage for purposes of an Income Fund's fundamental
investment limitation related to borrowing and leverage.

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

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

Additional Restrictions on the Use of Futures and Option Contracts. None
of the Funds is a "commodity pool" (i.e., a pooled investment vehicle which
trades in commodity futures contracts and options thereon and the operator of
which is registered with the CFTC and futures contracts and futures options
will be purchased, sold or entered into only for bona fide hedging purposes,
provided that a Fund may enter into such transactions for purposes other than
bona fide hedging if, immediately thereafter, the sum of the amount of its
initial margin and premiums on open contracts and options would not exceed 5%
of the liquidation value of the Fund's portfolio, provided, further, that, in
the case of an option that is in-the-money, the in-the-money amount may be
excluded in calculating the 5% limitation.

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

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

In addition to the foregoing requirements, the Board of Trustees has
adopted an additional restriction on the use of futures contracts and options
thereon, requiring that the aggregate market value of the futures

15
<PAGE>

contracts held by an Income Fund not exceed 50% of the market value of its
total assets. Neither this restriction nor any policy with respect to the
above-referenced restrictions, would be changed by the Board of Trustees
without considering the policies and concerns of the various federal and state
regulatory agencies.

Investment Restrictions

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

Each Fund may not:

(1) borrow money, except that each Fund may borrow money for temporary
or emergency purposes, or by engaging in reverse repurchase transactions,
in an amount not exceeding 33 1/3% of the value of its total assets at the
time when the loan is made and may pledge, mortgage or hypothecate no more
than 1/3 of its net assets to secure such borrowings. Any borrowings
representing more than 5% of a Fund's total assets must be repaid before
the Fund may make additional investments;

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

(3) purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured thereby) if, as a
result, more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry. Notwithstanding the foregoing, (i) with respect to a Fund's
permissible futures and options transactions in U.S. Government
securities, positions in options and futures shall not be subject to this
restriction; (ii) the Money Market Funds may invest more than 25% of their
total assets in obligations issued by banks, including U. S. banks; (iii)
New York Tax Free Money Market Fund, California Tax Free Money Market Fund
and Tax Free Money Market Fund may invest more than 25% of their
respective assets in municipal obligations secured by bank letters of
credit or guarantees, including participation certificates and (iv) more
than 25% of the assets of California Intermediate Tax Free Income Fund may
be invested in municipal obligations secured by bank letters of credit or
guarantees;

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

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

(6) issue any senior security (as defined in the 1940 Act), except that
(a) a Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under appli-

16
<PAGE>

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

(7) underwrite securities issued by other persons except insofar as a
Fund may technically be deemed to be an underwriter under the Securities
Act of 1933 in selling a portfolio security. In addition, as a matter of
fundamental policy, notwithstanding any other investment policy or
restriction, a Fund may seek to achieve its investment objective by
investing all of its investable assets in another investment company
having substantially the same investment objective and policies as the
Fund. For purposes of investment restriction (5) above, real estate
includes Real Estate Limited Partnerships. For purposes of investment
restriction (3) above, industrial development bonds, where the payment of
principal and interest is the ultimate responsibility of companies within
the same industry, are grouped together as an "industry." Investment
restriction (3) above, however, is not applicable to investments by a Fund
in municipal obligations where the issuer is regarded as a state, city,
municipality or other public authority since such entities are not members
of any "industry." Supranational organizations are collectively considered
to be members of a single "industry" for purposes of restriction (3)
above.

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

(1) Each Fund other than the Tax Free Funds may not, with respect to 75%
of its assets, hold more than 10% of the outstanding voting securities of
any issuer or invest more than 5% of its assets in the securities of any
one issuer (other than obligations of the U.S. Government, its agencies
and instrumentalities); each Tax Free Fund may not, with respect to 50% of
its assets, hold more than 10% of the outstanding voting securities of any
issuer.

(2) Each Fund may not make short sales of securities, other than short
sales "against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use of
options, futures contracts and related options, in the manner otherwise
permitted by the investment restrictions, policies and investment program
of a Fund. The Funds have no current intention of making short sales
against the box.

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

(4) Each Income Fund may not invest more than 15% of its net assets in
illiquid securities; each Money Market Fund may not invest more than 10%
of its net assets in illiquid securities.

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

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

17
<PAGE>

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

In order to permit the sale of its shares in certain states, a Fund may
make commitments more restrictive that the investment policies and limitations
described above and in its Prospectus. Should a Fund determine that any such
commitment is no longer in its best interests, it will revoke the commitment by
terminating sales of its shares in the state involved.

In order to comply with certain regulatory policies, as a matter of
operating policy, each Fund will not invest for the purpose of exercising
control or management.

As a nonfundamental operating policy, the Money Market Funds will not
invest more than 25% of their respective total assets in obligations issued by
foreign banks (other than foreign branches of U.S. banks).

As a nonfundamental operating policy, the Tax Free Money Market Funds will
not invest in obligations secured by letters of credit or guarantees from
foreign banks (other than foreign branches of U.S. banks) if, after giving
effect to such investment, the value attributable to such letters of credit or
guarantees, as determined by the respective Funds' advisers, would exceed 25%
of the respective Funds' total assets.

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

Portfolio Transactions and Brokerage Allocation

Specific decisions to purchase or sell securities for a Fund are made by a
portfolio manager who is an employee of the adviser or sub-adviser to such Fund
and who is appointed and supervised by senior officers of such adviser or
sub-adviser. Changes in the Funds' investments are reviewed by the Board of
Trustees. The Funds' portfolio managers may serve other clients of the advisers
in a similar capacity. Money market instruments are generally purchased in
principal transactions; thus, the Money Market Funds generally pay no brokerage
commissions.

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

For the fiscal year ended August 31, 1996, and the fiscal year ended
August 31, 1997, the annual rates of portfolio turnover for the following Funds
were as follows:

The Tax Free Income Fund: 210% and 147%, respectively; The New York Tax
Free Income Fund: 156% and 107%, respectively.

For the fiscal year ended August 31, 1996, and the fiscal year ended
August 31, 1997, the California Intermediate Tax Free Income Fund had portfolio
turnover rates of 188% and 66%, respectively.

Under the advisory agreement and the sub-advisory agreements, the adviser
and sub-advisers shall use their best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result

18
<PAGE>

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

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

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

The management fees that the Funds pay to the adviser will not be reduced
as a consequence of the adviser's or sub-advisers' receipt of brokerage and
research services. To the extent the Funds' portfolio transactions are used to
obtain such services, the brokerage commissions paid by the Funds will exceed
those that might otherwise be paid by an amount which cannot be presently
determined. Such services would be useful and of value to the adviser or
sub-advisers in serving one or more of their other clients and, conversely,
such services obtained by the placement of brokerage business of other clients
would be useful to the adviser and sub-advisers in carrying out their
obligations to the Funds. While such services are not expected to reduce the
expenses of the adviser or sub-advisers, they would, through use of the
services, avoid the additional expenses which would be incurred if they should
attempt to develop comparable information through their own staff.

In certain instances, there may be securities that are suitable for one or
more of the Funds as well as one or more of the adviser's or sub-advisers'
other clients. Investment decisions for the Funds and for other clients are
made with a view to achieving their respective investment objectives. It may
develop that the same investment decision is made for more than one client or
that a particular security is bought or sold for only one client even though it
might be held by, or bought or sold for, other clients. Likewise, a particular
security

19
<PAGE>

may be bought for one or more clients when one or more clients are selling that
same security. Some simultaneous transactions are inevitable when several
clients receive investment advice from the same investment adviser,
particularly when the same security is suitable for the investment objectives
of more than one client. In executing portfolio transactions for a Fund, the
adviser or sub-advisers may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be sold
or purchased with those of other Funds or their other clients if, in the
adviser's or sub-advisers' reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the Fund, taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in the Trust's registration statement and the Fund's
Prospectus and Statement of Additional Information. In such event, the adviser
or a sub- adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in an equitable manner, consistent with
its fiduciary obligations to the Fund and such other clients. It is recognized
that in some cases this system could have a detrimental effect on the price or
volume of the security as far as a Fund is concerned. However, it is believed
that the ability of the Funds to participate in volume transactions will
generally produce better executions for the Funds.

PERFORMANCE INFORMATION

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

A Fund may provide period and average annual "total rates of return." The
"total rate of return" refers to the change in the value of an investment in a
Fund over a period (which period shall be stated in any advertisement or
communication with a shareholder) based on any change in net asset value per
share including the value of any shares purchased through the reinvestment of
any dividends or capital gains distributions declared during such period. For
Class A shares, the average annual total rate of return figures will assume
payment of the maximum initial sales load at the time of purchase. For Class B
and Class C shares, the average annual total rate of return figures will assume
deduction of the applicable contingent deferred sales charge imposed on a total
redemption of shares held for the period. One-, five-, and ten-year periods
will be shown, unless the class has been in existence for a shorter-period.

Unlike some bank deposits or other investments which pay a fixed yield for
a stated period of time, the yields and the net asset values (in the case of
the Income Funds) of the classes of shares of a Fund will vary based on market
conditions, the current market value of the securities held by a Fund and
changes in the Fund's expenses. The advisers, Shareholder Servicing Agents, the
Administrator, the Distributor and other

20
<PAGE>

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

In connection with the Hanover Reorganization, the Vista 100% U.S.
Treasury Securities Money Market Fund was established to receive the assets of
The 100% U.S. Treasury Securities Money Market Fund of Hanover, and the Vista
Cash Management Fund (formerly known as the Vista Global Money Market Fund),
which received the assets of The Cash Management Fund of Hanover, adopted the
financial history of The Cash Management Fund of Hanover. Performance results
presented for each class of the Vista 100% U.S. Treasury Securities Money
Market Fund and the Vista Cash Management Fund will be based upon the
performance of The 100% U.S. Treasury Securities Money Market Fund and The Cash
Management Fund of Hanover, respectively, for periods prior to the consummation
of the Hanover Reorganization.

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

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

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

Total Rate of Return

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

21
<PAGE>

Average Annual Total Returns* (excluding sales charges)

The average annual total rate of return figures for the following Funds,
reflecting the initial investment and assuming the reinvestment of all
distributions (but excluding the effects of any applicable sales charges) for
the one and five year periods ended August 31, 1997, and for the period from
commencement of business operations to August 31, 1997, were as follows:

<TABLE>
<CAPTION>
Since Date of Date of
One Five Fund Fund Class
Fund Year Years Inception Inception Introduction
- -------------- ------- ------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Tax Free 9/8/97
Income Fund
A Shares 9.14% 6.94% 8.92% 9/8/87
B Shares+ 11/4/93
New York Tax 9/8/97
Free Income
Fund
A Shares 8.85% 6.56% 8.38% 9/8/87
B Shares+ 11/4/93
California
Intermediate
Tax Free
Income Fund
A Shares 7.46% -- 5.19% 7/15/93 7/15/93
</TABLE>

- ----------
* The ongoing fees and expenses borne by Class B Shares are greater than those
borne by Class A Shares. As indicated above, the performance information for
each class introduced after the commencement of operations of the related
Fund is based on the performance history of a predecessor class or classes
and historical expenses have not been restated, for periods during which the
performance information for a particular class is based upon the performance
history of a predecessor class, to reflect the ongoing expenses currently
borne by the particular class. Accordingly, the performance information
presented in the table above and in each table that follows may be used in
assessing each Fund's performance history but does note reflect how the
distinct classes would have performed on a relative basis prior to the
introduction of those classes which would require an adjustment to the
ongoing expenses.

The performance quoted reflects fee waivers that subsidize and reduce the
total operating expenses of certain Funds (or classes thereof). Returns on
these Funds (or classes) would have been lower if there were no such waivers.
With respect to certain Funds, Chase and/or other service providers are
obligated to waive certain fees and/or reimburse expenses. Each Fund's
Prospectus discloses the extent of any agreements to waive fees and/or
reimburse expenses.

+ Performance information presented in the table above and in each table that
follows for this class of the Funds prior to the date this class was
introduced does not reflect distribution fees and certain other expenses borne
by this class which, if reflected, would reduce the performance quoted.

22
<PAGE>

Average Annual Total Returns*
(including sales charges)

With the current maximum sales charge for Class A shares (4.50%) reflected
and the currently applicable CDSC for Class B shares for each period length,
the average annual total rate of return figures for the same periods would be
as follows:

<TABLE>
<CAPTION>
Since
One Five Fund
Fund Year Years Inception
- --------------------------------- ------- ------- ----------
<S> <C> <C> <C>
Tax Free Income Fund
A Shares 4.23% 5.96% 8.42%
B Shares+
New York Tax Free Income Fund
A Shares 3.30% 4.27% 8.57%
B Shares+
California Intermediate Tax Free
Income Fund
A Shares 2.62% -- 4.02%
</TABLE>

- ----------
*See the notes to the preceding table.

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

Yield Quotations

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

Any current "yield" for a class of shares of a Money Market Fund which is
used in such a manner as to be subject to the provisions of Rule 482(d) under
the Securities Act of 1933, as amended, shall consist of an annualized
historical yield, carried at least to the nearest hundredth of one percent,
based on a specific seven calendar day period and shall be calculated by
dividing the net change in the value of an account having a balance of one
Share at the beginning of the period by the value of the account at the
beginning of the period and multiplying the quotient by 365/7. For this
purpose, the net change in account value would reflect the value of additional
Shares purchased with dividends declared on the original Share and dividends
declared on both the original Share and any such additional Shares, but would
not reflect any realized gains or losses from the sale of securities or any
unrealized appreciation or depreciation on portfolio securities. In addition,
any effective yield quotation for a class of shares of a Money Market Fund so
used shall be calculated by compounding the current yield quotation for such
period by multiplying such quotation by 7/365, adding 1 to the product, raising
the sum to a power equal to 365/7, and subtracting 1 from the result. A portion
of a Tax Free Money Market Fund's income used in calculating such yields may be
taxable.

Any taxable equivalent yield quotation of a class of shares of a Tax Free
Fund, whether or not it is a Money Market Fund, shall be calculated as follows.
If the entire current yield quotation for such period is tax-exempt, the tax
equivalent yield will be the current yield quotation (as determined in
accordance with the appropriate calculation described above) divided by 1 minus
a stated income tax rate or rates. If a portion of

23
<PAGE>

the current yield quotation is not tax-exempt, the tax equivalent yield will be
the sum of (a) that portion of the yield which is tax-exempt divided by 1 minus
a stated income tax rate or rates and (b) the portion of the yield which is not
tax-exempt.

<TABLE>
<CAPTION>
Current Effective Compound
Annualized Yield Annualized Yield
as of 8/31/97 as of 8/31/97
------------------ -------------------
<S> <C> <C>
U. S. Government Money Market Fund
Vista Shares 5.05% 5.18%
Premier Shares 5.09% 5.22%
Institutional Shares 5.40% 5.54%
Prime Money Market Fund
B Shares 4.49% 4.59%
Premier Shares 5.29% 5.43%
Institutional Shares 5.49% 5.64%
Federal Money Market Fund
Vista Shares 4.93% 5.05%
Premier Shares 5.13% 5.26%
Institutional Shares 5.36% 5.50%
Treasury Plus Money Market Fund
Vista Shares 4.87% 4.99%
Premier Shares 4.97% 5.09%
Institutional Shares 5.21% 5.35%
100% U.S. Treasury Securities
Money Market Fund
Vista Shares 4.90% 5.02%
Premier Shares 4.94% 5.06%
Institutional Shares 5.22% 5.36%
Cash Management Fund
Vista Shares 5.09% 5.22%
Premier Shares 5.19% 5.32%
Institutional Shares 5.44% 5.59%
</TABLE>

<TABLE>
<CAPTION>
Current Effective Annualized
Annualized Compound Tax Equivalent
Yield Annualized Yield Yield**
as of 8/31/97 as of 8/31/97 as of 8/31/97
--------------- ------------------ ---------------
<S> <C> <C> <C>
Tax Free Money Market Fund
Vista Shares 2.98% 3.02% 4.93%
Premier Shares 3.06% 3.11% 5.07%
Institutional Shares 3.31% 3.37% 5.48%
California Tax Free
Money Market Fund 2.88% 2.92% 5.36%
New York Tax Free
Money Market Fund 2.91% 2.96% 5.45%
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
Thirty-Day Tax Equivalent
Yield Thirty-Day Yield**
as of 8/31/97 as of 8/31/97
--------------- -------------------
<S> <C> <C>
Tax Free Income Fund
Class A Shares 4.29% 7.10%
Class B Shares 3.74% 6.19%
New York Tax Free Income Fund
Class A Shares 3.97% 7.43%
Class B Shares 3.42% 6.40%
California Intermediate Tax Free Income Fund 3.97% 7.38%
</TABLE>

- ----------
* The tax equivalent yields assume a federal income tax rate of 39.6% for the
Tax Free Money Market Fund and Tax Free Income Fund, a combined New York State,
New York City and federal income tax rate of 46.80% for the New York Tax Free
Money Market Fund and New York Tax Free Income Fund and a combined California
State and federal income tax rate of 46.24% for the California Tax Free Money
Market Fund and California Intermediate Tax Free Income Fund.

Non-Standardized Performance Results*
(excluding sales charges)

The table below reflects the net change in the value of an assumed initial
investment of $10,000 in the following Funds (excluding the effects of any
applicable sales charges) for the period from the commencement date of business
for each such Fund (i.e., either September 8, 1987 for the Tax Free Income and
New York Tax Free Income Funds or July 16, 1993 for the California Intermediate
Tax Free Income Fund.) The values reflect an assumption that capital gain
distributions and income dividends, if any, have been invested in additional
shares of the same class. From time to time, the Funds may provide these
performance results in addition to the total rate of return quotations required
by the Securities and Exchange Commission. As discussed more fully in the
Prospectuses, neither these performance results, nor total rate of return
quotations, should be considered as representative of the performance of the
Funds in the future. These factors and the possible differences in the methods
used to calculate performance results and total rates of return should be
considered when comparing such performance results and total rate of return
quotations of the Funds with those published for other investment companies and
other investment vehicles.

<TABLE>
<CAPTION>
Value of Value of Fund
Period Ended Initial $10,000 Capital Gains Value of Total Inception
August 31, 1997 Investment Distribution Reinvested Dividends Value Date
- ------------------------------------- ----------------- --------------- ---------------------- --------- ----------
<S> <C> <C> <C> <C> <C>
The Tax Free Income Fund:
A Shares $12,320 $1,278 $9,877 $23,475 9/8/97
B Shares+ 12,250 1,239 9,257 22,746
The New York Tax Free Income Fund:
A Shares 11,800 1,708 8,840 22,348 9/8/97
B Shares+ 11,760 1,661 8,300 21,721
The California Intermediate Tax Free
Income Fund 9,853 249 2,220 12,322 7/15/93
</TABLE>

- ----------
* See the notes to the table captioned "Average Annual Total Return (excluding
sales charges)" above. The table above assumes an initial investment of $10,000
in a particular class of a Fund for the period from the Fund's commencement of
operations, although the particular class may have been introduced at a
subsequent date. As indicated above, performance information for each class
introduced after the commencement of operations of the related Fund is based on
the performance history of a predecessor class or classes, and historical
expenses have not been restated, for periods during which the performance
information for a particular class is based upon the performance history of a
predecessor class, to reflect the ongoing expenses currently borne by the
particular class.

25
<PAGE>

Non-Standardized Performance Results* (includes sales charges)

With the current maximum sales charge of 4.50% for Class A shares, and the
currently applicable CDSC for Class B shares for each period length, reflected,
the figures for the same periods would be as follows:

<TABLE>
<CAPTION>
Value of Value of
Period Ended Initial $10,000 Capital Gains Value of Total
August 31, 1997 Investment Distribution Reinvested Dividends Value
- ------------------------------------- ----------------- --------------- ---------------------- --------
<S> <C> <C> <C> <C>
The Tax Free Income Fund:
A Shares $11,766 $1,220 $9,432 $22,418
B Shares+ 12,250 1,239 9,257 22,746
The New York Tax Free Income Fund:
A Shares 11,269 1,632 8,442 21,343
B Shares+ 11,760 1,661 8,300 21,721
The California Intermediate Tax Free
Income Fund 9,410 238 2,120 11,768
</TABLE>

DETERMINATION OF NET ASSET VALUE

As of the date of this Statement of Additional Information, the New York
Stock Exchange is open for trading every weekday except for the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. In addition,to
the days listed above (other than Good Friday), the Funds are closed for
business on the following holidays: Martin Luther King Day, Columbus Day, and
Veteran's Day.

The Money Market Funds' portfolio securities are valued at their amortized
cost. Amortized cost valuation involves valuing an instrument at its cost and
thereafter accrediting discounts and amortizing premiums at a constant rate to
maturity. Pursuant to the rules of the Securities and Exchange Commission, the
Board of Trustees has established procedures to stabilize the net asset value
of each Money Market Fund at $1.00 per share. These procedures include a review
of the extent of any deviation of net asset value per share, based on available
market rates, from the $1.00 amortized cost price per share. If fluctuating
interest rates cause the market value of a Money Market Fund's portfolio to
approach a deviation of more than 1/2 of 1% from the value determined on the
basis of amortized cost, the Board of Trustees will consider what action, if
any, should be initiated. Such action may include redemption of shares in kind
(as described in greater detail below), selling portfolio securities prior to
maturity, reducing or withholding dividends and utilizing a net asset value per
share as determined by using available market quotations.

The Money Market Funds have established procedures designed to ensure that
their portfolio securities meet their high quality criteria.

Bonds and other fixed income securities (other than short-term
obligations) in a Fund's portfolio are valued on the basis of valuations
furnished by a pricing service, the use of which has been approved by the Board
of Trustees. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and

26
<PAGE>

electronic data processing techniques that take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, since such valuations are believed to
reflect more accurately the fair value of such securities. Short- term
obligations which mature in 60 days or less are valued at amortized cost, which
constitutes fair value as determined by the Board of Trustees. Futures and
option contracts that are traded on commodities or securities exchanges are
normally valued at the settlement price on the exchange on which they are
traded. Portfolio securities (other than short-term obligations) for which
there are no such quotations or valuations are valued at fair value as
determined in good faith by or at the direction of the Board of Trustees.

Interest income on long-term obligations in an Income Fund's portfolio is
determined on the basis of coupon interest accrued plus amortization of
discount (the difference between acquisition price and stated redemption price
at maturity) and premiums (the excess of purchase price over stated redemption
price at maturity). Interest income on short-term obligations is determined on
the basis of interest and discount accrued less amortization of premium.

PURCHASES, REDEMPTIONS AND EXCHANGES

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

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

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

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

27
<PAGE>

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

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

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

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

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

28
<PAGE>

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

Class B shares automatically convert to Class A shares (and thus are then
subject to the lower expenses borne by Class A shares) after a period of time
specified below has elapsed since the date of purchase (the "CDSC Period"),
together with the pro rata portion of all Class B shares representing dividends
and other distributions paid in additional Class B shares attributable to the
Class B shares then converting. The conversion of Class B shares purchased on
or after May 1, 1996, will be effected at the relative net asset values per
share of the two classes on the first business day of the month following the
eighth anniversary of the original purchase. The conversion of Class B shares
purchased prior to May 1, 1996, will be effected at the relative net asset
values per share of the two classes on the first business day of the month
following the seventh anniversary of the original purchase. If any exchanges of
Class B shares during the CDSC Period occurred, the holding period for the
shares exchanged will be counted toward the CDSC Period. At the time of the
conversion the net asset value per share of the Class A shares may be higher or
lower than the net asset value per share of the Class B shares; as a result,
depending on the relative net asset values per share, a shareholder may receive
fewer or more Class A shares than the number of Class B shares converted.

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

TAX MATTERS

The following is only a summary of certain additional tax considerations
generally affecting the Funds and their shareholders that are not described in
the respective Fund's Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussions here and in each Fund's Prospectus are not intended as substitutes
for careful tax planning.

Qualification as a Regulated Investment Company

Each Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As
a regulated investment company, each Fund is not subject to federal income tax
on the portion of its net investment income (i.e., its investment company
taxable income, as that term is defined in the Code, without regard to the
deduction for dividends paid) and net capital gain (i.e., the excess of net
long-term capital gain over net short-term capital loss) that it distributes to
shareholders, provided that it distributes at least 90% of its net investment
income and at least 90% of its tax-exempt income (net of expenses allocable
thereto) for the taxable year (the "Distribution Requirement"), and satisfies
certain other requirements of the Code that are described below. Because
certain Funds invest all of their assets in Portfolios which will be classified
as partnerships for federal income tax purposes, such Funds will be deemed to
own a proportionate share of the income of the Portfolio into which each
contributes all of its assets for purposes of determining whether such Funds
satisfy the Distribution Requirement

29
<PAGE>

and the other requirements necessary to qualify as a regulated investment
company (e.g., Income Requirement (hereinafter defined), etc.).

In addition to satisfying the Distribution Requirement, a regulated
investment company must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the
sale or other disposition of stock or securities or foreign currencies (to the
extent such currency gains are directly related to the regulated investment
company's principal business of investing in stock or securities) and other
income (including but not limited to gains from options, futures or forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies (the "Income Requirement").

In addition to satisfying the requirements described above, each Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the
value of its total assets may be invested in the securities of any one issuer
(other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses.

Each non-Money Market Fund may engage in hedging or derivatives
transactions involving foreign currencies, forward contracts, options and
futures contracts (including options, futures and forward contracts on foreign
currencies) and short sales. See "Additional Policies Regarding Derivative and
Related Transactions." Such transactions will be subject to special provisions
of the Code that, among other things, may affect the character of gains and
losses realized by the Fund (that is, may affect whether gains or losses are
ordinary or capital), accelerate recognition of income of the Fund and defer
recognition of certain of the Fund's losses. These rules could therefore affect
the character, amount and timing of distributions to shareholders. In addition,
these provisions (1) will require a Fund to "mark-to-market" certain types of
positions in its portfolio (that is, treat them as if they were closed out) and
(2) may cause a Fund to recognize income without receiving cash with which to
pay dividends or make distributions in amounts necessary to satisfy the
Distribution Requirement and avoid the 4% excise tax (described below). Each
Fund intends to monitor its transactions, will make the appropriate tax
elections and will make the appropriate entries in its books and records when
it acquires any option, futures contract, forward contract or hedged investment
in order to mitigage the effect of these rules.

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

Excise Tax on Regulated Investment Companies

A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98%
of ordinary taxable income for the calendar year and 98% of capital gain net
income for the one-year period ended on October 31 of such calendar year (or,
at the election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year
election"))(Tax-exempt interest on municipal obligations is not subject to the
excise tax). The balance of such income must be distributed during the next
calendar year. For the foregoing purposes, a regulated investment company is
treated as having distributed any amount on which it is subject to income tax
for any taxable year ending in such calendar year.

Each Fund intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax.

30
<PAGE>

However, investors should note that a Fund may in certain circumstances be
required to liquidate portfolio investments to make sufficient distributions to
avoid excise tax liability.

Fund Distributions

Each Fund anticipates distributing substantially all of its net taxable
income for each taxable year. Such distributions will be taxable to
shareholders as ordinary income and treated as dividends for federal income tax
purposes, but they will not qualify for the 70% dividends-received deduction
for corporate shareholders of a Fund. Dividends paid on Class A, Class B and
Class C shares are calculated at the same time. In general, dividends on Class
B and Class C shares are expected to be lower than those on Class A shares due
to the higher distribution expenses borne by the Class B and Class C shares.
Dividends may also differ between classes as a result of differences in other
class specific expenses.

A Fund may either retain or distribute to shareholders its net capital
gain for each taxable year. Each Fund currently intends to distribute any such
amounts. If net capital gain is distributed and designated as a capital gain
dividend, it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares.

Under recently enacted legislation, the maximum rate of tax on long-term
capital gains of individuals will generally be reduced from 28% to 20% (10% for
gains otherwise taxed at 15%) for long-term capital gains realized after July
28, 1997 with respect to capital assets held for more than 18 months.
Additionally, beginning after December 31, 2000, the maximum tax rate for
capital assets with a holding period beginning after that date and held for
more than five years will be 18%. Under a literal reading of the legislation,
capital gain dividends paid by a regulated investment company would not appear
eligible for the reduced capital gain rates. However, the legislation
authorizes the Treasury Department to promulgate regulations that would apply
the new rates to capital gain dividends paid by a regulated investment company.

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

Each Tax Free Fund intends to qualify to pay exempt-interest dividends by
satisfying the requirement that at the close of each quarter of the Tax Free
Fund's taxable year at least 50% of the its total assets consists of tax-exempt
municipal obligations. Distributions from a Tax Free Fund will constitute
exempt-interest dividends to the extent of its tax-exempt interest income (net
of expenses and amortized bond premium). Exempt-interest dividends distributed
to shareholders of a Tax Free Fund are excluded from gross income for federal
income tax purposes. However, shareholders required to file a federal income
tax return will be required to report the receipt of exempt-interest dividends
on their returns. Moreover, while exempt-interest dividends are excluded from
gross income for federal income tax purposes, they may be subject to
alternative minimum tax ("AMT") in certain circumstances and may have other
collateral tax consequences as discussed below. Distributions by a Tax Free
Fund of any investment company taxable income or of any net capital gain will
be taxable to shareholders as discussed above.

AMT is imposed in addition to, but only to the extent it exceeds, the
regular tax and is computed at a maximum marginal rate of 28% for noncorporate
taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's
alternative minimum taxable income ("AMTI") over an exemption amount. In
addition, under

31
<PAGE>

the Superfund Amendments and Reauthorization Act of 1986, a tax is imposed for
taxable years beginning after 1986 and before 1996 at the rate of 0.12% on the
excess of a corporate taxpayer's AMTI (determined without regard to the
deduction for this tax and the AMT net operating loss deduction) over $2
million. Exempt-interest dividends derived from certain "private activity"
municipal obligations issued after August 7, 1986 will generally constitute an
item of tax preference includable in AMTI for both corporate and noncorporate
taxpayers. In addition, exempt-interest dividends derived from all municipal
obligations, regardless of the date of issue, must be included in adjusted
current earnings, which are used in computing an additional corporate
preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted
current earnings over its AMTI (determined without regard to this item and the
AMT net operating loss deduction)) includable in AMTI.

Exempt-interest dividends must be taken into account in computing the
portion, if any, of social security or railroad retirement benefits that must
be included in an individual shareholder's gross income and subject to federal
income tax. Further, a shareholder of a Tax Free Fund is denied a deduction for
interest on indebtedness incurred or continued to purchase or carry shares of
the Fund. Moreover, a shareholder who is (or is related to) a "substantial
user" of a facility financed by industrial development bonds held by a Tax Free
Fund will likely be subject to tax on dividends paid by the Tax Free Fund which
are derived from interest on such bonds. Receipt of exempt-interest dividends
may result in other collateral federal income tax consequences to certain
taxpayers, including financial institutions, property and casualty insurance
companies and foreign corporations engaged in a trade or business in the United
States. Prospective investors should consult their own tax advisers as to such
consequences.

Net investment income that may be received by certain of the Funds from
sources within foreign countries may be subject to foreign taxes withheld at
the source. The United States has entered into tax treaties with many foreign
countries which entitle any such Fund to a reduced rate of, or exemption from,
taxes on such income. It is impossible to determine the effective rate of
foreign tax in advance since the amount of any such Fund's assets to be
invested in various countries is not known.

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

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

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

A Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of shares, paid to any shareholder (1) who has provided
either an incorrect tax identification number or no number at all, (2) who is
subject to backup withholding by the IRS for failure to report the receipt of
interest or dividend income properly, or (3)

32
<PAGE>

who has failed to certify to the Fund that it is not subject to backup
withholding or that it is a corporation or other "exempt recipient."

Sale or Redemption of Shares

Each Money Market Fund seeks to maintain a stable net asset value of $1.00
per share; however, there can be no assurance that a Money Market Fund will do
this. In such a case and any case involving the Income Funds, a shareholder
will recognize gain or loss on the sale or redemption of shares of a Fund in an
amount equal to the difference between the proceeds of the sale or redemption
and the shareholder's adjusted tax basis in the shares. All or a portion of any
loss so recognized may be disallowed if the shareholder purchases other shares
of the Fund within 30 days before or after the sale or redemption. In general,
any gain or loss arising from (or treated as arising from) the sale or
redemption of shares of a Fund will be considered capital gain or loss and will
be long-term capital gain or loss if the shares were held for longer than one
year. However, any capital loss arising from the sale or redemption of shares
held for six months or less will be disallowed to the extent of the amount of
exempt-interest dividends received on such shares and (to the extent not
disallowed) will be treated as a long-term capital loss to the extent of the
amount of capital gain dividends received on such shares.

Foreign Shareholders

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

If the income from a Fund is not effectively connected with a U.S. trade
or business carried on by a foreign shareholder, paid to a foreign shareholder
from net investment income will be subject to U.S. withholding tax at the rate
of 30% (or lower treaty rate) upon the gross amount of the dividend. Such a
foreign shareholder would generally be exempt from U.S. federal income tax on
gains realized on the sale of shares of the Fund and capital gain dividends and
amounts retained by the Fund that are designated as undistributed capital
gains.

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

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

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

State and Local Tax Matters

Depending on the residence of the shareholder for tax purposes,
distributions may also be subject to state and local taxes or withholding
taxes. Most states provide that a RIC may pass through (without restriction) to
its shareholders state and local income tax exemptions available to direct
owners of certain types of U.S. government securities (such as U.S. Treasury
obligations). Thus, for residents of these states, distributions derived from a
Fund's investment in certain types of U.S. government securities should be free
from state and local income taxes to the extent that the interest income from
such investments would have been exempt from state and local income taxes if
such securities had been held directly by the respective shareholders
themselves. Certain states,

33
<PAGE>

however, do not allow a RIC to pass through to its shareholders the state and
local income tax exemptions available to direct owners of certain types of U.S.
government securities unless the RIC holds at least a required amount of U.S.
government securities. Accordingly, for residents of these states,
distributions derived from a Fund's investment in certain types of U.S.
government securities may not be entitled to the exemptions from state and
local income taxes that would be available if the shareholders had purchased
U.S. government securities directly. Shareholders' dividends attributable to a
Fund's income from repurchase agreements generally are subject to state and
local income taxes, although states and regulations vary in their treatment of
such income. The exemption from state and local income taxes does not preclude
states from asserting other taxes on the ownership of U.S. government
securities. To the extent that a Fund invests to a substantial degree in U.S.
government securities which are subject to favorable state and local tax
treatment, shareholders of such Fund will be notified as to the extent to which
distributions from the Fund are attributable to interest on such securities.
Rules of state and local taxation of ordinary income dividends and capital gain
dividends from RICs may differ from the rules for U.S. federal income taxation
in other respects. Shareholders are urged to consult their tax advisers as to
the consequences of these and other state and local tax rules affecting
investment in a Fund.

Effect of Future Legislation

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

MANAGEMENT OF THE TRUST AND THE FUNDS

Trustees and Officers

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

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

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

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

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

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

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

34
<PAGE>

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

*Sarah E. Jones--Trustee. President and Chief Operating Officer of Chase
Mutual Funds Corp.; formerly Managing Director for the Global Asset Management
and Private Banking Division of the Chase Manhattan Bank. Age: 46. Address: One
Chase Manhattan Plaza, Third Floor, New York, New York 10081.

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

W. Perry Neff--Trustee. Independent Financial Consultant; Director of
North America Life Assurance Co., Petroleum & Resources Corp. and The Adams
Express Co.; formerly Director and Chairman of The Hanover Funds, Inc.;
formerly Director, Chairman and President of The Hanover Investment Funds, Inc.
Age: 70. Address: RR 1 Box 102, Weston, VT 05181.

*Leonard M. Spalding, Jr.--Trustee. Chief Executive Officer of Chase
Mutual Funds Corp.; formerly President and Chief Executive Officer of Vista
Capital Management; and formerly Chief Investment Executive of the Chase
Manhattan Private Bank. Age: 62. Address: One Chase Manhattan Plaza, Third
Floor, New York, New York 10081.

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

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

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

Lee Schultheis--Assistant Treasurer and Assistant Secretary. President,
BISYS Fund Distributors; formerly Managing Director, Forum Financial Group.
Age: 41. Address: One Chase Manhattan Plaza, Third Floor, New York, NY 10081.

W. Anthony Turner--Secretary. Senior Vice President and Regional Client
Executive, BISYS Fund Services; formerly Senior Vice President, First Union
Brokerage Services, Inc. and Senior Vice President, NationsBank. Age: 36.
Address: 125 West 55th Street, New York, NY 10019.

- ----------
*Asterisks indicate those Trustees that are "interested persons" (as defined in
the 1940 Act). Mr. Reid is not an interested person of the Trust's investment
advisers or principal underwriter, but may be deemed an interested person of
the Trust solely by reason of being chairman of the Trust.

35
<PAGE>

The Board of Trustees of the Trust presently has an Audit Committee. The
members of the Audit Committee are Messrs. Ten Haken (Chairman), Armstrong,
Eppley, MacCallan and Thode. The function of the Audit Committee is to
recommend independent auditors and monitor accounting and financial matters.
The Audit Committee met two times during the fiscal period ended August 31,
1997.

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

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

Remuneration of Trustees and Certain Executive Officers:

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

Set forth below is information regarding compensation paid or accrued
during the fiscal year ended August 31, 1997 for each Trustee of the Trust:

<TABLE>
<CAPTION>
U.S. New York California
Government Cash Tax Free Prime Tax Free Tax Free
Money Management Money Money Money Money
Market Fund Fund Market Fund Market Fund Market Fund Market Fund
------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee $ 25,653.12 $ 15,603.85 $ 4,564.75 $ 7,867.48 $ 4,552.98 $ 232.56
H. Richard Vartabedian, Trustee 22,147.67 13,572.80 3,987.88 6,890.64 4,015.45 201.72
William J. Armstrong, Trustee 14,096.36 8,648.09 2,541.07 4,394.24 2,564.42 128.76
John R.H. Blum, Trustee 15,703.56 9,595.85 2,815.73 4,854.28 2,844.01 143.31
Stuart W. Cragin, Jr., Trustee 14,765.14 9,048.49 2,658.64 4,593.77 2,676.96 134.49
Roland R. Eppley, Jr., Trustee 14,765.14 9,048.49 2,658.64 4,593.77 2,676.96 134.49
Joseph J. Harkins, Trustee 15,389.67 9,415.33 2,762.55 4,769.24 2,793.55 140.31
Sarah E. Jones, Trustee 0.00 0.00 0.00 0.00 0.00 0.00
W.D. MacCallan, Trustee 14,765.14 9,048.49 2,658.64 4,593.77 2,676.96 134.49
W. Perry Neff, Trustee 15,389.67 9,415.33 2,762.55 4,769.24 2,793.55 140.31
Leonard M. Spalding, Jr., Trustee 0.00 0.00 0.00 0.00 0.00 0.00
Richard E. Ten Haken, Trustee 14,765.14 9,048.49 2,658.64 4,593.77 2,676.96 134.49
Irving L. Thode, Trustee 14,765.14 9,048.49 2,658.64 4,593.77 2,676.9 134.49
</TABLE>

36
<PAGE>

<TABLE>
<CAPTION>
100% U.S.
Treasury California Treasury
Federal Plus New York Tax Intermediate Securities
Money Money Tax Free Free Tax Free Money Market
Market Fund Market Fund Income Fund Income Fund Income Fund Fund
------------- ------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee $ 3,921.97 $ 10,013.99 $547.05 $421.65 $ 124.85 $ 9,881.87
H. Richard Vartabedian, Trustee 3,417.14 8,653.82 479.59 370.09 108.47 8,577.22
William J. Armstrong, Trustee 2,171.59 5,514.80 305.09 235.27 68.67 5,460.25
John R.H. Blum, Trustee 2,407.23 6,086.05 337.94 260.85 76.77 6,038.45
Stuart W. Cragin, Jr. Trustee 2,277.76 5,771.25 319.72 246.70 72.30 5,717.52
Roland R. Eppley, Jr. Trustee 2,277.76 5,771.25 319.72 246.70 72.30 5,717.52
Joseph J. Harkins, Trustee 2,364.57 5,969.62 331.88 256.25 75.30 5,927.39
Sarah E. Jones, Trustee 0.00 0.00 0.00 0.00 0.00 0.00
W.D. MacCallan, Trustee 2,277.76 5,771.25 319.72 246.70 72.30 5,717.52
W. Perry Neff, Trustee 2,364.57 5,969.62 331.88 256.25 75.30 5,927.39
Leonard M. Spalding, Jr., Trustee 0.00 0.00 0.00 0.00 0.00 0.00
Richard E. Ten Haken, Trustee 2,277.76 5,771.25 319.72 246.70 72.30 5,717.52
Irving L. Thode, Trustee 2,277.76 5,771.25 319.72 246.70 72.30 5,717.52
</TABLE>

<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Benefits Accrued From
as Fund Expenses (1) "Fund Complex" (2)
---------------------- -------------------
<S> <C> <C>
Fergus Reid, III, Trustee $ 56,368 $129,500
H. Richard Vartabedian, Trustee 47,622 102,750
William J. Armstrong, Trustee 38,372 67,000
John R.H. Blum, Trustee 41,363 73,000
Stuart W. Cragin, Jr., Trustee 34,965 68,500
Roland R. Eppley, Jr., Trustee 53,267 68,500
Joseph J. Harkins, Trustee 52,508 71,500
Sarah E. Jones, Trustee -- --
W.D. MacCallan, Trustee 66,323 68,500
W. Perry Neff, Trustee 66,323 71,500
Leonard M. Spalding, Jr., Trustee -- --
Richard E. Ten Haken, Trustee 31,463 68,500
Irving L. Thode, Trustee 41,876 68,500
</TABLE>

- ----------
(1) Data reflects total benefits accrued by Mutual Fund Group, Mutual Fund
Select Group, Capital Growth Portfolio, Growth and Income Portfolio and
International Equity Portfolio for the fiscal year ended October 31, 1997
and by the Trust, Mutual Fund Select Trust, and Mutual Fund Variable Annuity
Trust for the fiscal year ended August 31, 1997.

(2) Data reflects total compensation earned during the period January 1, 1997 to
December 31, 1997 for service as a Trustee to the Trust, Mutual Fund Group,
Mutual Fund Variable Annuity Trust, Mutual Select Group, Mutual Fund Select
Trust, Capital Growth Portfolio, Growth and Income Portfolio and
International Equity Portfolio.

As of October 31, 1997, the Trustees and officers as a group owned less
than 1% of each Fund's outstanding shares, all of which were acquired for
investment purposes. For the fiscal year ended August 31, 1997, the Trust paid
its disinterested Trustees fees and expenses for all the meetings of the Board
and any committees attended in the aggregate amount of approximately $569,995
which amount was then apportioned among the Funds comprising the Trust.

37
<PAGE>

Vista Funds Retirement Plan for Eligible Trustees

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

Set forth below in the table are the estimated annual benefits payable to
an eligible Trustee upon retirement assuming various compensation and years of
service classifications. As of October 31, 1997, the estimated credited years
of service for Messrs.Reid, Vartabedian, Armstrong, Blum, Cragin, Eppley,
Harkins, Neff, MacCallan, Spalding, TenHaken, Thode and Ms. Jones are 12, 4, 9,
12, 4, 8, 6, 7, 7, 0, 12, 4 and 0, respectively.

<TABLE>
<CAPTION>
Highest Annual Compensation Paid by All Vista Funds
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$60,000 $80,000 $100,000 $120,000 $140,000
<CAPTION>
Years of
Service Estimated Annual Benefits Upon Retirement
- ---------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
14 $57,600 $76,800 $ 96,000 $115,200 $134,400
12 52,800 70,400 88,000 105,600 123,200
10 48,000 64,000 80,000 96,000 112,000
8 38,400 51,200 64,000 76,800 89,600
6 28,800 38,400 48,000 57,600 67,200
4 19,200 25,600 32,000 38,400 44,800
</TABLE>

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

Messrs. Eppley, Ten Haken, Thode and Vartabedian have each executed a
deferred compensation agreement for the 1997 calendar year and as of October
31, 1997 they had contributed $55,334, $27,669, $49,803, and $83,000,
respectively.

The Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, unless, as to liability to the Trust or its shareholders, it is finally
adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices or
with respect to any matter unless it is finally adjudicated that they did not
act in good faith in

38
<PAGE>

the reasonable belief that their actions were in the best interest of the
Trust. In the case of settlement, such indemnification will not be provided
unless it has been determined by a court or other body approving the settlement
or other disposition, or by a reasonable determination based upon a review of
readily available facts, by vote of a majority of disinterested Trustees or in
a written opinion of independent counsel, that such officers or Trustees have
not engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of their duties.

Adviser and Sub-Advisers

Chase acts as investment adviser to the Funds pursuant to an Investment
Advisory Agreement, dated as of May 6, 1996 (the "Advisory Agreement"). Subject
to such policies as the Board of Trustees may determine, Chase is responsible
for investment decisions for the Funds. Pursuant to the terms of the Advisory
Agreement, Chase provides the Funds with such investment advice and supervision
as it deems necessary for the proper supervision of the Funds' investments. The
advisers continuously provide investment programs and determine from time to
time what securities shall be purchased, sold or exchanged and what portion of
the Funds' assets shall be held uninvested. The advisers to the Funds furnish,
at their own expense, all services, facilities and personnel necessary in
connection with managing the investments and effecting portfolio transactions
for the Funds. The Advisory Agreement for the Funds will continue in effect
from year to year only if such continuance is specifically approved at least
annually by the Board of Trustees or by vote of a majority of a Fund's
outstanding voting securities and by a majority of the Trustees who are not
parties to the Advisory Agreement or interested persons of any such party, at a
meeting called for the purpose of voting on such Advisory Agreement.

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

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

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

39
<PAGE>

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

Chase, on behalf of the Funds (other than the Cash Management Fund and the
Tax Free Money Market Fund), has entered into an investment sub-advisory
agreement dated as of May 6, 1996 with Chase Asset Management, Inc. ("CAM").
Texas Commerce Bank, National Association ("TCB") is the sub-investment adviser
to the Cash Management Fund and the Tax Free Money Market Fund pursuant to a
separate sub-investment advisory agreement between Chase and TCB dated as of
May 6, 1996. With respect to the day- to-day management of the Funds, under the
sub-advisory agreements, the sub-advisers make decisions concerning, and place
all orders for, purchases and sales of securities and help maintain the records
relating to such purchases and sales. The sub-advisers may, in their
discretion, provide such services through their own employees or the employees
of one or more affiliated companies that are qualified to act as an investment
adviser to the Company under applicable laws and are under the common control
of Chase; provided that (i) all persons, when providing services under the
sub-advisory agreement, are functioning as part of an organized group of
persons, and (ii) such organized group of persons is managed at all times by
authorized officers of the sub-adviser. This arrangement will not result in the
payment of additional fees by the Funds.

Chase, a wholly-owned subsidiary of The Chase Manhattan Corporation, a
registered bank holding company, is a commercial bank offering a wide range of
banking and investment services to customers throughout the United States and
around the world. Also included among the Chase accounts are commingled trust
funds and a broad spectrum of individual trust and investment management
portfolios. These accounts have varying investment objectives.

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

TCB has been in the investment counselling business since 1987 and is
ultimately controlled and owned by Chase Manhattan Corporation. TCB renders
investment advice to a wide variety of corporations, pension plans,
foundations, trusts and individuals.

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

40
<PAGE>

For the fiscal years ended August 31, 1995, August 31, 1996 and August 31,
1997, Chase was paid or accrued the following investment advisory fees with
respect to the following Funds, and voluntarily waived the amounts in
parentheses following such fees with respect to each such period:

<TABLE>
<CAPTION>
Fiscal Year- Fiscal Year- Fiscal Year-
ended ended ended
Fund 8/31/95 8/31/96 8/31/97
- -------------------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Tax Free Money Market Fund
Paid or Accrued $ 440,282 $ 602,984 $ 898,976
Waived none none none
New York Tax Free Money
Market Fund
Paid or Accrued $ 381,647 $ 564,728 $ 895,216
Waived none none none
Tax Free Income Fund
Paid or Accrued $ 307,093 $ 286,711 $ 248,543
Waived ($ 287,095) ($ 222,662) ($ 124,746)
New York Tax Free Income Fund
Paid or Accrued $ 333,493 $ 328,622 $ 320,945
Waived ($ 219,772) ($ 105,922) ($ 40,479)
Federal Money Market Fund
Paid or Accrued $ 389,075 $ 590,313 $ 782,294
Waived ($ 118,975) none none
Treasury Plus Money Market Fund
Paid or Accrued $ 22,663 $ 665,556 $1,983,716
Waived 22,663 65,952 none
Prime Money Market Fund
Paid or Accrued $ 352,679 $1,110,393 $1,595,402
Waived $ 216,306 ($ 50,805) none
California Intermediate
Tax Fee Income Fund
Paid or Accrued $ 102,004 $ 92,752 $ 79,332
Waived ($ 102,004) ($ 90,335) ($ 66,295)
California Tax Free
Money Market Fund
Paid or Accrued $ 55,870 $ 48,544 $ 44,776
Waived ($ 44,112) ($ 37,587) ($ 31,249)
U.S. Government
Money Market Fund
Paid or Accrued $1,440,186 $2,959,311 $5,173,975
Waived none none none
</TABLE>

For the period December 1, 1995 through August 31, 1996, and the fiscal
year ended August 31, 1997, Chase was paid or accrued investment advisory fees
and voluntarily waived the amount in parentheses, $1,518,404 ($197,536) and
$2,010,632, respectively, for the 100% U.S. Treasury Securities Money
Market Fund.

For the period December 1, 1995 through August 31, 1996, and the fiscal
year ended August 31, 1997, Chase was paid or accrued investment advisory fees
and voluntarily waived the amount in parentheses, $1,781,610 ($195,420) and
$3,165,847, respectively, for the Cash Management Fund.

41
<PAGE>

Administrator

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

Under the Administration Agreement Chase is permitted to render
administrative services to others. The Administration Agreement will continue
in effect from year to year with respect to each Fund only if such continuance
is specifically approved at least annually by the Board of Trustees or by vote
of a majority of such Fund's outstanding voting securities and, in either case,
by a majority of the Trustees who are not parties to the Administration
Agreement or "interested persons" (as defined in the 1940 Act) of any such
party. The Administration Agreement is terminable without penalty by the Trust
on behalf of each Fund on 60 days' written notice when authorized either by a
majority vote of such Fund's shareholders or by vote of a majority of the Board
of Trustees, including a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust, or by Chase on 60 days'
written notice, and will automatically terminate in the event of its
"assignment" (as defined in the 1940 Act). The Administration Agreement also
provides that neither Chase nor its personnel shall be liable for any error of
judgment or mistake of law or for any act or omission in the administration of
the Funds, except for willful misfeasance, bad faith or gross negligence in the
performance of its or their duties or by reason of reckless disregard of its or
their obligations and duties under the Administration Agreement.

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

In consideration of the services provided by Chase pursuant to the
Administration Agreement, Chase receives from each Fund a fee computed daily
and paid monthly at an annual rate equal to 0.05% of each Money Market Fund's
average daily net assets, and 0.10% of each Income Fund's average daily net
assets, on an annualized basis for the Fund's then-current fiscal year. Chase
may voluntarily waive a portion of the fees payable to it with respect to each
Fund on a month-to-month basis.

42
<PAGE>

For the years ended August 31, 1995, August 31, 1996 and August 31, 1997
Chase was paid or accrued administration fees, and voluntarily waived the
amounts in parentheses for the following Funds:

<TABLE>
<CAPTION>
Fiscal Year- Fiscal Year- Fiscal Year
ended Ended ended
8/31/95 8/31/96 8/31/97
---------------- ----------------- ----------------
<S> <C> <C> <C>
Federal Money Market Fund
Paid or Accrued $ 194,538 $ 295,156 $ 391,147
Waived ($ 61,243) none none
Treasury Plus Money Market Fund
Paid or Accrued $ 11,331 $ 332,778 $ 991,858
Waived ($ 11,331) ($ 49,071) none
Prime Money Market Fund
Paid or Accrued $ 176,340 $ 550,477 $ 797,701
Waived ($ 88,982) ($ 33,604) none
California Intermediate
Tax Fee Income Fund
Paid or Accrued $ 34,001 $ 30,917 $ 26,444
Waived ($ 34,001) ($ 30,917) ($ 19,912)
California Tax Free
Money Market Fund
Paid or Accrued $ 27,935 $ 24,272 $ 22,388
Waived ($ 21,527) ($ 15,097) none
U.S. Government
Money Market Fund
Paid or Accrued $ 720,093 $1,479,655 $2,586,987
Waived none none none
U.S. Treasury Securities
Money Market Fund
Paid or Accrued -- $ 741,264* $1,005,316
Waived -- none none
Tax Free Money Market Fund
Paid or Accrued $ 220,141 $ 301,492 $ 449,487
Waived none none none
New York Tax Free Money
Market Fund
Paid or Accrued $ 190,823 $ 282,364 $ 447,608
Waived none none none
Tax Free Income Fund
Paid or Accrued $ 102,364 $ 95,570 $ 82,848
Waived ($ 64,572) ($ 52,872) none
New York Tax Free Income Fund
Paid or Accrued $ 111,164 $ 109,541 $ 106,982
Waived ($ 81,265) ($ 17,606) none
Cash Management Fund
Paid or Accrued -- $ 872,983* $1,582,924
Waived -- none none
</TABLE>

- ----------
*Paid or accrued administrative fees for the period December 1, 1995 through
August 31, 1996.

43
<PAGE>

Distribution Plans

The Trust has adopted separate plans of distribution pursuant to Rule
12b-1 under the 1940 Act (a "Distribution Plan") including Distribution Plans
on behalf of the Class A and Class B shares of the Tax Free Income Fund and the
New York Tax Free Income Fund, the Class B and Class C shares of the Prime
Money Market Fund, the shares of the California Intermediate Tax Free Income
Fund, the Vista Shares of the Money Market Funds (except the Cash Management
Fund), and the Premier Shares of the U.S. Government Money Market Fund, which
provides that each of such classes of such Funds shall pay for distribution
services a distribution fee (the "Distribution Fee"), including payments to the
Distributor, at annual rates not to exceed the amounts set forth in their
respective Prospectuses. There is no distribution plan for the Cash Management
Fund. The Distributor may use all or any portion of such Distribution Fee to
pay for Fund expenses of printing prospectuses and reports used for sales
purposes, expenses of the preparation and printing of sales literature and
other such distribution-related expenses.

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

No class of shares of a Fund will make payments or be liable for any
distribution expenses incurred by other classes of shares of such Fund.

The Institutional Shares of the Money Market Funds have no distribution
plan. There is no distribution plan for Premier Shares for any Money Market
Fund other than the U.S. Government Money Market Fund.

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

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

44
<PAGE>

Each Distribution Plan provides that it will continue in effect
indefinitely if such continuance is specifically approved at least annually by
a vote of both a majority of the Trustees and a majority of the Trustees who
are not "interested persons" (as defined in the 1940 Act) of the Trust and who
have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreement related to such Plan ("Qualified
Trustees"). The continuance of each Distribution Plan was most recently
approved on October 13, 1995.

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

For the fiscal year ended August 31, 1997, the Distributor was paid or
accrued the following Distribution Fees and voluntarily waived the amounts in
parenthesis following such fees with respect to the Shares of each Fund:

<TABLE>
<CAPTION>
Paid/Accrued Waived
-------------- -------------
<S> <C> <C>
U.S. Government Money Market Fund
Vista Shares $2,054,400
Premier Shares $ 905,148
100% Treasury Securities Money Market Fund
Vista Shares $1,905,353
Treasury Plus Money Market Fund
Vista Shares $1,503,214
Prime Money Market Fund
B Shares $ 80,931
Federal Money Market Fund
Vista Shares $ 337,875
Tax Free Money Market Fund
Vista Shares $ 586,572
New York Tax Free Money Market Fund
Vista Shares $ 895,216
California Tax Free Money Market Fund $ 44,776
Tax Free Income Fund
A Shares $ 171,088
Tax Free Income Fund
B Shares $ 108,092
New York Tax Free Income Fund
A Shares $ 234,149
New York Tax Free Income Fund
B Shares $ 99,915
California Intermediate Fund $ 66,110 ($ 39,544)
</TABLE>

<PAGE>

With respect to the shares of the following Funds, the Distribution Fees
were allocated as follows:

<TABLE>
<CAPTION>
Printing, Advertising
Postage and Sales & Administrative
Fund Handling Compensation Filings
- --------------------------------------------- ------------- -------------- -----------------
<S> <C> <C> <C>
U.S. Government Money Market Fund
Vista Shares $439,642 $1,259,347 $355,411
Premier Shares 193,702 554,856 156,591
100% Treasury Money Market Fund
Vista Shares 407,746 1,167,981 329,626
Treasury Plus Money Market Fund
Vista Shares 321,688 921,470 260,056
Federal Money Market Fund
Vista Shares 72,305 207,117 58,452
Tax Free Money Market Fund
Vista Shares 121,674 348,535 98,363
New York Tax Free Money Market Fund
Vista Shares 191,576 548,767 154,872
California Tax Free Money Market Fund
Vista Shares 9,582 27,448 7,746
Tax Free Income Fund
A Shares 36,613 104,877 29,598
New York Tax Free Income Fund
A Shares 50,108 143,533 40,508
California Intermediate Tax Free Income Fund
A Shares 5,685 16,285 4,596
</TABLE>

With respect to the Class B shares of the Funds, the Distribution Fee was
paid to FEP Capital L.P. for acting as finance agent.

Distribution and Sub-Administration Agreement

The Trust has entered into a Distribution and Sub-Administration Agreement
dated August 24, 1995 (prior to such date, the Distributor served the Trust
pursuant to a contract dated August 23, 1994 (April 15, 1994 with respect to
the Treasury Plus Money Market Fund and Federal Money Market Fund)) (the
"Distribution Agreement") with the Distributor, pursuant to which the
Distributor acts as the Funds' exclusive underwriter, provides certain
administration services and promotes and arranges for the sale of each class of
Shares. The Distributor is a wholly-owned subsidiary of BISYS Fund Services,
Inc. The Distribution Agreement provides that the Distributor will bear the
expenses of printing, distributing and filing prospectuses and statements of
additional information and reports used for sales purposes, and of preparing
and printing sales literature and advertisements not paid for by the
Distribution Plans. The Trust pays for all of the expenses for qualification of
the shares of each Fund for sale in connection with the public offering of such
shares, and all legal expenses in connection therewith. In addition, pursuant
to the Distribution Agreement, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and
office space.

The Distribution Agreement is currently in effect and will continue in
effect with respect to each Fund only if such continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority of
such Fund's outstanding voting securities and, in either case, by a majority of
the Trustees who are not parties to the Distribution Agreement or "interested
persons" (as defined in the 1940 Act) of

46
<PAGE>

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

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

In consideration of the sub-administration services provided by the
Distributor pursuant to the Distribution Agreement, the Distributor receives an
annual fee, payable monthly, of 0.05% of the net assets of each Fund. The
Distributor may voluntarily agree to from time to time waive a portion of the
fees payable to it under the Distribution Agreement with respect to each Fund
on a month-to-month basis. For the fiscal years ended August 31, 1995, August
31, 1996 and August 31, 1997, the Distributor was paid or accrued the following
sub-administration fees under the Distribution Agreement, and voluntarily
waived the amounts in parentheses following such fees:

<TABLE>
<CAPTION>
Fiscal Year- Fiscal Year- Fiscal Year-
Ended Ended Ended
8/31/95 8/31/96 8/31/97
-------------- -------------- -------------
<S> <C> <C> <C>
Federal Money Market Fund
Paid or Accrued $194,538 $295,156 $391,147
Waived 9,048 -- --
Treasury Plus Money Market Fund
Paid or Accrued 11,331 332,778 991,858
Waived 11,331 16,881 --
Prime Money Market Fund
Paid or Accrued 176,342 550,477 797,701
Waived -- -- --
California Intermediate
Tax Fee Income Fund
Paid or Accrued 17,001 15,459 13,222
Waived -- -- --
California Tax Free
Money Market Fund
Paid or Accrued 27,935 24,272 22,388
Waived -- -- --
</TABLE>

47
<PAGE>

<TABLE>
<CAPTION>
Fiscal Year- Fiscal Year- Fiscal Year-
Ended Ended Ended
8/31/95 8/31/96 8/31/97
------------- -------------- --------------
<S> <C> <C> <C>
U.S. Government
Money Market Fund
Paid or Accrued $720,093 $1,479,655 $2,586,987
Waived -- -- --
100% Treasury Securities
Money Market Fund
Paid or Accrued -- 265,361 1,005,316
Waived -- -- --
Cash Management Fund
Paid or Accrued -- 402,255 1,582,924
Waived -- -- --
Tax Free Money Market Fund
Paid or Accrued 220,141 301,492 449,488
Waived -- -- --
New York Tax Free Money
Market Fund
Paid or Accrued 190,823 282,364 447,608
Waived -- -- --
Tax Free Income Fund
Paid or Accrued 51,182 47,785 41,424
Waived -- -- --
New York Tax Free Income Fund
Paid or Accrued 55,582 54,770 53,491
Waived -- -- --
</TABLE>

Shareholder Servicing Agents, Transfer Agent and Custodian

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

48
<PAGE>

Each Shareholder Servicing Agent may voluntarily agree from time to time
to waive a portion of the fees payable to it under its Servicing Agreement with
respect to each Fund on a month-to-month basis. Fees payable to the Shareholder
Servicing Agents (all of which currently are related parties) and the amounts
voluntarily waived for the following periods were as follows:

<TABLE>
<CAPTION>
9/1/94 9/1/95 9/1/96
through through through
8/31/95 8/31/96 8/31/97
--------------------- ----------------------- ------------------------
Fund payable waived payable waived payable waived
- --------------------------- ---------- ---------- ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government
Money Market Fund
Vista Shares $816,674 $ -- $3,193,687 $791,007 $7,190,397 $ --
Premier Shares 684,952 -- 2,336,485 194,645 2,262,869 --
100% Treasury
Securities Money
Market Fund
Vista Shares -- -- 4,161,761 803,962 6,668,735 $2,256,995
Premier Shares -- -- 126 -- 7,214 7,214
Cash Management
Fund
Vista Shares 348,428 $106,710 4,086,512 143,866 6,991,098 613,426
Premier Shares 421,596 46 368,896 30,771 997,708 46,586
Treasury Plus
Money Market Fund
Vista Shares n/a n/a 1,747,171 711,428 5,261,249 1,664,171
Premier Shares 2,971 2,971 172,057 21,998 308,459 --
Federal Money Market Fund
Vista Shares 354,682 140,653 880,856 584,851 1,182,562 396,234
Premier Shares 109,180 15,790 455,489 41,636 803,743 61,730
Prime Money Market Fund
B Shares 10,080 5,488 25,702 25,702 26,977 17,624
Premier Shares 82,617 72,534 910,639 214,388 1,148,882 339,705
Tax Free Money
Market Fund
Vista Shares 367,259 -- 1,029,700 264,273 1,989,537 768,241
Premier Shares 344,945 131,039 465,133 139,053 323,826 --
N.Y. Tax Free
Money Market Fund 954,117 -- 1,976,547 415,903 3,133,258 1,253,304
California Tax Free
Money Market Fund 139,675 139,675 169,905 152,096 156,716 102,864
Tax Free Income Fund
A Shares 223,990 179,192 201,911 173,806 171,088 163,770
B Shares 31,921 -- 37,015 -- 36,031 --
N.Y. Tax Free Income Fund
A Shares 256,481 205,185 241,773 208,893 234,149 226,909
B Shares 21,430 -- 32,078 -- 33,305 --
California Intermediate
Tax Free Fund 85,003 85,003 77,293 77,293 66,110 66,110
</TABLE>

There is no Shareholder Servicing Agent, and thus no shareholder servicing
fees, for the Institutional Shares of the Money Market Funds.

49
<PAGE>

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

Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of each Fund for which Chase receives such compensation as is from time
to time agreed upon by the Trust and Chase. As custodian, Chase provides
oversight and record keeping for the assets held in the portfolios of each
Fund. Chase also provides fund accounting services for the income, expenses and
shares outstanding for the Funds. Chase is located at 3 Metrotech Center,
Brooklyn, NY 11245. For additional information, see the Prospectuses.

INDEPENDENT ACCOUNTANTS

The financial statements incorporated herein by reference from the Trust's
Annual Reports to Shareholders for the fiscal year ended August 31, 1997, and
the related financial highlights which appear in the Prospectuses, have been
incorporated herein and included in the Prospectuses in reliance on the reports
of Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036,
independent accountants of the Funds, given on the authority of said firm as
experts in accounting and auditing. Price Waterhouse LLP provides the Funds
with audit services, tax return preparation and assistance and consultation
with respect to the preparation of filings with the Securities and Exchange
Commission.

CERTAIN REGULATORY MATTERS

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

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

50
<PAGE>

GENERAL INFORMATION

Description of Shares, Voting Rights and Liabilities

Mutual Fund Trust is an open-end, management investment company organized
as Massachusetts business trust under the laws of the Commonwealth of
Massachusetts on February 4, 1994. Because certain of the Funds comprising the
Trust are "non-diversified", more than 5% of any of the assets of any such Fund
may be invested in the obligations of any single issuer, which may make the
value of the shares in such a Fund more susceptible to certain risks than
shares of a diversified mutual fund. The fiscal year-end of the Funds in the
Trust is August 31.

The Trust currently consists of 12 series of shares of beneficial
interest, par value $.001 per share. With respect to the Money Market Funds and
certain of the Income Funds, the Trust may offer more than one class of shares.
The Trust has reserved the right to create and issue additional series or
classes. Each share of a series or class represents an equal proportionate
interest in that series or class with each other share of that series or class.
The shares of each series or class participate equally in the earnings,
dividends and assets of the particular series or class. Expenses of the Trust
which are not attributable to a specific series or class are allocated amount
all the series in a manner believed by management of the Trust to be fair and
equitable. Shares have no pre-emptive or conversion rights. Shares when issued
are fully paid and non-assessable, except as set forth below. Shareholders are
entitled to one vote for each share held. Shares of each series or class
generally vote together, except when required under federal securities laws to
vote separately on matters that may affect a particular class, such as the
approval of distribution plans for a particular class. With respect to shares
purchased through a Shareholder Servicing Agent and, in the event written proxy
instructions are not received by a Fund or its designated agent prior to a
shareholder meeting at which a proxy is to be voted and the shareholder does
not attend the meeting in person, the Shareholder Servicing Agent for such
shareholder will be authorized pursuant to an applicable agreement with the
shareholder to vote the shareholder's outstanding shares in the same proportion
as the votes cast by other Fund shareholders represented at the meeting in
person or by proxy.

Shareholders of the Vista Shares, Premier Shares and Institutional Shares
of the Money Market Funds bear the fees and expenses described herein and in
the Prospectuses. The fees paid by the Vista Shares to the Distributor and
Shareholder Servicing Agent under the distribution plans and shareholder
servicing arrangements for distribution expenses and shareholder services
provided to investors by the Distributor and Shareholder Servicing Agents,
absent waivers, generally are more than the respective fees paid under
distribution plans and shareholder servicing arrangements adopted for the
Premier Shares. The Institutional Shares pay no distribution or Shareholder
Servicing fee. As a result, absent waivers, at any given time, the net yield on
the Vista Shares will be lower than the yield on the Premier Shares and the
yield on the Premier Shares will be lower than the yield on Institutional
Shares. Standardized yield quotations will be computed separately for each
class of shares of a Fund.

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

The Vista Prime Money Market Fund offers both Class B and Class C shares.
The classes of shares have different attributes relating to sales charges and
expenses as described in the Prospectus. The relative impact of contingent
deferred sales charges will depend upon the length of time a share is held.

51
<PAGE>

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

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

Certificates are issued only upon the written request of a shareholder,
subject to the policies of the investor's Shareholder Servicing Agent, but the
Trust will not issue a stock certificate with respect to shares that may be
redeemed through expedited or automated procedures established by a Shareholder
Servicing Agent. No certificates are issued for shares of the Money Market
Funds or Class B shares of the Income Funds.

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

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

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

52
<PAGE>

Principal Holders

As of November 28, 1997, the following persons owned of record, directly
or indirectly, 5% or more of the outstanding shares of the following classes of
the following Funds:

<TABLE>
<S> <C>
CA Tax Free Money Market

Union Bank of Switzerland NY .................. 27.21%
Attn: Andrew Fox VP
1345 Avenue of the Americas
New York, NY 10105-0302

Cudd and Company .............................. 26.17%
Omnibus Account #1
PTIS Div. Attn: Andrew C. Olson
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

Client Services .............................. 19.59%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

Saul A. Fox ................................. 8.51%
950 Tower Lane
Suite 1950
Foster City, CA 94404-2131

National Financial Services Corporation ...... 8.05%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752

Cash Management Money Market--Institutional

The Chase Manhattan Bank ..................... 72.71%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001
</TABLE>

53
<PAGE>

<TABLE>
<S> <C>
Cash Management Money Market--Premier Shares

The Chase Manhattan Bank ..................... 24.85%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

National Financial Services Corporation ...... 23.60%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752

Cudd and Company .............................. 11.47%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

Cash Management Money Market--Vista Shares

Client Services .............................. 11.94%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

National Financial Services Corporation ...... 6.43%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752

Federal Money Market Institutional

Cudd and Company .............................. 51.16%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

The Chase Manhattan Bank ..................... 19.56%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413
</TABLE>

54
<PAGE>

<TABLE>
<S> <C>
Health Management Systems Inc. ............... 10.60%
Attn: Barbara Mounadi
401 Park Avenue
4th Floor
New York, NY 10016-8808

Federal Money Market--Premier Shares

National Financial Services Corporation ...... 72.71%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752

Cudd and Company .............................. 6.27%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

Federal Money Market--Vista Shares

Client Services .............................. 27.14%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

National Financial Services Corporation ...... 5.29%
for the Excel Ben of our Cust
Attn: Mike McLaughlin
Church Street Station
PO Box 3908
New York, NY 10008-3752

New York Tax Free Income A

Cudd and Company .............................. 16.61%
Custody Division
1211 Avenue of the Americas
35th floor
New York, NY 10036

New York Tax Free Money Market

Client Services .............................. 20.08%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701
</TABLE>

55
<PAGE>

<TABLE>
<S> <C>
Cudd and Company .............................. 19.83%
C/O Chase Manhattan Bank
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036

National Financial Services Corporation ...... 17.17%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752
Prime Money Market B Shares

John P. Teets & .............................. 6.80%
Robert E. Rymer JT Ten
Holly Hill Farm
320 Country Road 730
Riceville, TN 37370-5726

Prime Money Market--Institutional Shares

The Chase Manhattan Bank ..................... 21.66%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

The Chase Manhattan Bank ..................... 10.33%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

Capita Equipment Receivables Trust ............ 8.49%
1996-1 Cash Collateral Account
Chase Manhattan Global Trust
450 West 33rd Street
15th Floor
New York, NY 10001-2603

Merrill Lynch Life Insurance Co ............... 7.95%
Attn: Treasury
Merrill Lynch Insurance Group Services
48D4 Deer Lake Drive East
4th Floor
Jacksonville, FL 32246-6484
</TABLE>

56
<PAGE>

<TABLE>
<S> <C>
Prime Money Market Premier Shares

Chase Manhattan Bank NA ..................... 57.42%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

Chase Sallie Mae Education Loan Trust ...... 10.56%
Attn: Richard Lorenzen
450 West 33rd Street
15th Floor
New York, NY 10001-2603

ABFS 1997-2 ................................. 8.89%
Chase Manhattan Bank Global Trust
Attn: Conor Waters
450 West 33rd Street
15th Floor
New York, NY 10001-2603

Tax Free Money Market Institutional Shares

Cudd and Company ........................... 30.00%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

The Chase Manhattan Bank .................. 15.29%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

Union Bank of Switzerland .................. 8.13%
Branch as Custodian
Attn: Andrew Fox
1345 Avenue of the Americas
New York, NY 10105-0302

CST FBO Benjamin L. & ..................... 6.55%
Mary F. Doskocil
5306 Mansfield Road
Arlington, TX 76017-2754

Reese Design LTD ........................... 5.63%
Attn: Michael Krainz
8226 Bee Caves Road
Austin, TX 78746-4909
</TABLE>

57
<PAGE>

<TABLE>
<S> <C>
Tax Free Money Market--Premier Shares

Cudd and Company .............................. 36.07%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

National Financial Services Corporation ...... 18.41%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752

Joel E. Smilow .............................. 5.39%
Joan L. Smilow JTWROS
100 Beachside Avenue
Greens farm, CT 06436
Tax Free Money Market--Vista Shares

Client Services .............................. 26.92%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

Cudd and Company .............................. 20.96%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

Obie & Co .................................... 10.90%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558
</TABLE>

58
<PAGE>

<TABLE>
<S> <C>
Treasury Plus Money Market--Vista Shares

Prime Receivables Series 1992-1 ..................... 22.19%
Principle Account
Chemical Account
Attn: Dennis Kildea
450 West 33rd Street
15th Floor
New York, NY 10001-2603

Obie & Co ............................................. 18.00%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558

Client Services ....................................... 6.22%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

Treasury Plus Money Market--Premier Shares

The Chase Manhattan Bank .............................. 68.24%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

CCTC Holdings Inc. / Media One of Delaware Inc. ...... 8.20%
Attn: Steven Marrero
450 West 33rd Street
15th Floor
New York, NY 10001-2603
</TABLE>

59
<PAGE>

<TABLE>
<S> <C>
Treasury Plus Money Market--Institutional Shares

The Chase Manhattan Bank ........................ 23.57%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

The Chase Manhattan Bank ........................ 13.90%
Global Services Omnibus AC
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

The Chase Manhattan Bank ........................ 12.76%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

Kinetic Concepts Inc ........................... 12.03%
Attn: Cash Manager
PO Box 659508
San Antonio, TX 78265-9508

AT & T Capital Corporation ..................... 7.42%
Attn: Kathleen Beck ATT Capital Corp
44 Whippany Road
2nd Floor
Morristown, NJ 07960-4558

Obie & Co ....................................... 5.15%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558
</TABLE>

60
<PAGE>

<TABLE>
<S> <C>
US Government Money Market--Vista Shares

Obie & Co .................................... 18.77%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558

Cudd and Company .............................. 11.88%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

Client Services .............................. 10.37%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

Obie & Co .................................... 5.76%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558

US Government Money Market--Premier Shares

The Chase Manhattan Bank ..................... 30.26%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

The Chase Manhattan Bank ..................... 16.80%
Global Services Omnibus
Attn: Alex Kwong
3 Chase Metro Center
7th Floor
Brooklyn, NY 11245-0001

Penlin & Co ................................. 14.59%
The Chase Manhattan Bank
Attn: P. Whalen
PO Box 1412
Rochester, NY 14603-1412

National Financial Services Corporation ...... 8.90%
for the Excel Ben of our Cust
Church Street Station
PO Box 3752
New York, NY 10008-3752
</TABLE>

61
<PAGE>

<TABLE>
<S> <C>
US Government Money Market--Institutional Shares

The Chase Manhattan Bank ........................ 21.35%
Attn: Deborah Derenzo
4 New York Plaza
9th Floor
New York, NY 10004-2413

The Chase Manhattan Bank ........................ 13.33%
Global Sec Services Omnibus AC
Attn: Alex Kwong
3 Chase MetroTech Center
7th Floor
Brooklyn, NY 11245-0001

Delaware Economic Development Authority ......... 11.39%
State Street Bank of Conn as debtor
Chase Manhattan Bank Global Trust
Attn: R.J. Halleran
450 West 33rd Street
15th Floor
New York, NY 10001-2603

The Chase Manhattan Bank ........................ 9.17%
Global Sec Services Omnibus
Attn: Alex Kwong
3 Chase MetroTech Center
7th Floor
Brooklyn, NY 11245-0001

Obie & Co ....................................... 6.77%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552- 2558

Cudd and Company ................................. 5.51%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

100% US Securities Money Market Fund--Vista

Client Services ................................. 13.37%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701
</TABLE>

62
<PAGE>

<TABLE>
<S> <C>
100% US Securities Money Market Fund--Premier

The Chase Manhattan Bank ........................ 60.29%
Global Sec Services Omnibus
Attn: Alex Kwong
3 Chase MetroTech Center
7th Floor
Brooklyn, NY 11245-0001

The Breast Cancer Research Foundation ............ 19.77%
Attn: J. Krupskas
767 5th Ave
40th Floor
New York, NY 10153-0001

Alexander Katz .................................... 11.11%
499 N. Broadway
White Plains, NY 10603-3242

100% US Securities Money Market Fund--Institutional

Cudd and Company ................................. 28.02%
Omnibus Account #1
PTIS Div.
1211 Avenue of the Americas
35th floor
New York, NY 10036-8701

The Chase Manhattan Bank ........................ 18.48%
Global Sec Services Omnibus
Attn: Alex Kwong
3 Chase MetroTech Center
7th Floor
Brooklyn, NY 11245-0001

Obie & Co ....................................... 13.37%
C/O Texas Commerce Bank
Attn: Stif Unit 17 HCB 98
PO Box 2558
Houston, TX 77552-2558

Client Services ................................. 9.58%
Attn: Sevan Marinos
1211 Avenue of the Americas
33rd floor
New York, NY 10036-8701

Spanish Broadcasting Inc. ........................ 8.25%
Attn: Jose Garcia
26 West 56th Street
New York, NY 10019-8099
</TABLE>

63
<PAGE>

<TABLE>
<S> <C>
Louisiana Pacific ......... 5.94%
Attn: Aura Caldas
450 W 33rd Street
15th Floor
New York, NY 10001-2603

AT&T Capital Corp ......... 5.71%
AT&T Capital Markets
295 N Maple Avenue
Room 713421
Basking Ridge, NJ 07920-1025
</TABLE>

Financial Statements

The 1997 Annual Report to Shareholders of each Fund including the reports
of independent accountants, financial highlights and financial statements for
the fiscal year ended August 31, 1997 contained therein, are incorporated
herein by reference.

Specimen Computations of Offering Prices Per Share

<TABLE>
<S> <C>
New York Tax Free Income Fund (specimen computations)
Net Asset Value and Redemption Price per Share of Beneficial Interest at
August 31, 1997 ...................................................... $11.80
Maximum Offering Price per Share ($11.80 divided by .955) (reduced on
purchases of $100,000 or more) ....................................... $12.36
New York Tax Free Income Fund B Shares (specimen computations)
Net Asset Value and Redemption Price per Share of Beneficial Interest at
August 31, 1997 ...................................................... $11.76
Tax Free Income Fund (specimen computations)
Net Asset Value and Redemption Price per Share of Beneficial Interest at
August 31, 1997 ...................................................... $12.32
Maximum Offering Price per Share ($12.32 divided by .955) (reduced on
purchases of $100,000 or more) ....................................... $12.90
Tax Free Income Fund B Shares (specimen computations)
Net Asset Value and Redemption Price per Share of Beneficial Interest at
August 31, 1997 ...................................................... $12.25
California Intermediate Tax Free Income Fund (specimen computations)
Net Asset Value and Redemption Price per Share of Beneficial Interest at
August 31, 1997 ...................................................... $10.07
Maximum Offering Price per Share ($10.07 divided by .955) (reduced on
purchases of $100,000 or more) ....................................... $10.54
</TABLE>

The Shares of the Money Market Funds are offered for sale at Net Asset
Value.

64
<PAGE>

APPENDIX A

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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APPENDIX B

DESCRIPTION OF RATINGS*

The ratings of Moody's and Standard & Poor's represent their opinions as
to the quality of various Municipal Obligations. It should be emphasized,
however, that ratings are not absolute standards of quality. Consequently,
Municipal Obligations with the same maturity, coupon and rating may have
different yields while Municipal Obligations of the same maturity and coupon
with different ratings may have the same yield.

Description of Moody's four highest municipal bond ratings

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

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

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

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

Description of Moody's three highest ratings of state and municipal notes

Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in bond
risk, long-term secular trends for example, may be less important over the
short run. A short-term rating may also be assigned on an issue having a demand
feature-variable rate demand obligation or commercial paper programs; such
ratings will be designated as "VMIG." Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Symbols used are as follows:

MIG-1/VMIG-1--Notes bearing this designation are of the best quality,
enjoying strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both.

MIG-2/VMIG-2--Notes bearing this designation are of high quality, with
margins of protection ample although not so large as in the preceding group.

- ----------
* As described by the rating agencies. Ratings are generally given to
securities at the time of issuance. While the rating agencies may from time
to time revise such ratings, they undertake no obligation to do so.

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MIG-3/VMIG-3--Notes bearing this designation are of favorable quality,
where all security elements are accounted for but there is lacking the
undeniable strength of the preceding grade, liquidity and cash flow protection
may be narrow and market access for refinancing is likely to be less well
established.

Description of Standard & Poor's four highest municipal bond ratings

AAA--Bonds rated AAA have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.

AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.

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

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

Plus (+) or Minus ( ): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

Description of Standard & Poor's ratings of municipal notes
and tax-exempt demand bonds

A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes. Notes due in 3 years or less will likely receive
a note rating. Notes maturing beyond 3 years will most likely receive a
long-term debt rating. The following criteria will be used in making that
assessment.

--Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).

--Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

Note rating symbols are as follows:

SP-1--Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given
a plus (+) designation.

SP-2--Satisfactory capacity to pay principal and interest.

SP-3--Speculative capacity to pay principal and interest.

Standard & Poor's assigns "dual" ratings to all long-term debt issues that
have as part of their provisions a demand or double feature.

The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols are used to denote the put
option (for

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example, "AAA/B-1+"). For the newer "demand notes," S&P's note rating symbols,
combined with the commercial paper symbols, are used (for example,
"SP-1+/A-1+").

Description of Standard & Poor's two highest commercial paper ratings

A Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.

B-1--This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.

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

Description of Moody's two highest commercial paper ratings

Moody's Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. Moody's employs three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers:
Prime-1, Prime-2 and Prime-3.

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: (1)
leading market positions in well-established industries; (2) high rates of
return on funds employed; (3) conservative capitalization structures with
moderate reliance on debt and ample asset protection; (4) broad margins in
earnings coverage of fixed financial charges and high internal cash generation;
and (5) well-established access to a range of financial markets and assured
sources of alternate liquidity.

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

Description of Fitch's ratings of municipal notes and tax-exempt demand bonds
Municipal Bond Ratings

The ratings represent Fitch's assessment of the issuer's ability to meet
the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issuer, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's financial strength and
credit quality.

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

AA--Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated

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AAA. Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated F-1.

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

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

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

Short-Term Ratings

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

Although the credit analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

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

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

F-2--Good Credit Quality. Issues carrying this rating have satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.

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

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APPENDIX C

SPECIAL INVESTMENT CONSIDERATIONS RELATING TO
NEW YORK MUNICIPAL OBLIGATIONS

Some of the significant financial considerations relating to the
investments of the New York Intermediate Tax Free Income Fund in New York
municipal securities are summarized below. The following information
constitutes only a brief summary, does not purport to be a complete description
and is largely based on information drawn from official statements relating to
securities offerings of New York municipal obligations available as of the date
of this Statement of Additional Information. The accuracy and completeness of
the information contained in such offering statements has not been
independently verified.

New York State

New York State Financing Activities. There are a number of methods by
which New York State (the "State") may incur debt. Under the State
Constitution, the State may not, with limited exceptions for emergencies,
undertake long-term general obligation borrowing (i.e., borrowing for more than
one year) unless the borrowing is authorized in a specific amount for a single
work or purpose by the New York State Legislature (the "Legislature") and
approved by the voters. There is no limitation on the amount of long-term
general obligation debt that may be so authorized and subsequently incurred by
the State. With the exception of general obligation housing bonds (which must
be paid in equal annual installments or installments that result in
substantially level or declining debt service payments, within 50 years after
issuance, commencing no more than three years after issuance), general
obligation bonds must be paid in equal annual installments or installments that
result in substantially level or declining debt service payments, within 40
years after issuance, beginning not more than one year after issuance of such
bonds.

The State may undertake short-term borrowings without voter approval (i)
in anticipation of the receipt of taxes and revenues, by issuing tax and
revenue anticipation notes ("TRANs"), and (ii) in anticipation of the receipt
of proceeds from the sale of duly authorized but unissued bonds, by issuing
bond anticipation notes ("BANs"). TRANs must mature within one year from their
dates of issuance and may not be refunded or refinanced beyond such period.
BANS may only be issued for the purposes and within the amounts for which bonds
may be issued pursuant to voter authorizations. Such BANs must be paid from the
proceeds of the sale of bonds in anticipation of which they were issued or from
other sources within two years of the date of issuance or, in the case of BANs
for housing purposes, within five years of the date of issuance.

The State may also, pursuant to specific constitutional authorization,
directly guarantee certain public authority obligations. The State Constitution
provides for the State guarantee of the repayment of certain borrowings for
designated projects of the New York State Thruway Authority, the Job
Development Authority and the Port Authority of New York and New Jersey. The
State has never been called upon to make any direct payments pursuant to such
guarantees. The State-guaranteed bonds of the Port Authority of New York and
New Jersey were fully retired on December 31, 1996. State-guaranteed bonds
issued by the Thruway Authority were fully retired on July 1, 1995.

In February 1997, the Job Development Authority ("JDA") issued
approximately $85 million of State- guaranteed bonds to refinance certain of
its outstanding bonds and notes in order to restructure and improve JDA's
capital structure. Due to concerns regarding the economic viability of its
programs, JDA's loan and loan guarantee activities had been suspended since the
Governor took office in 1995. As a result of the structural imbalances in JDA's
capital structure, and defaults in its loan portfolio and loan guarantee
program incurred between 1991 and 1996, JDA would have experienced a debt
service cash flow shortfall had it not completed its recent refinancing. JDA
anticipates that it will transact additional refinancings in 1999, 2000 and
2003 to complete its long-term plan of finance and further alleviate cash flow
imbalances which are likely to occur in future years. The State does not
anticipate that it will be called upon to make any payments pursuant

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to the State guarantee in the 1997-98 fiscal year. JDA recently resumed its
lending activities under a revised set of lending programs and underwriting
guidelines.

Payments of debt service on State general obligation and State-guaranteed
bonds and notes are legally enforceable obligations of the State.

The State employs additional long-term financing mechanisms,
lease-purchase and contractual- obligation financing, which involve obligations
of public authorities or municipalities that are State-supported but not
general obligations of the State. Under these financing arrangements, certain
public authorities and municipalities have issued obligations to finance the
construction and rehabilitation of facilities or the acquisition and
rehabilitation of equipment and expect to meet their debt service requirements
through the receipt of rental or other contractual payments made by the State.
Although these financing arrangements involve a contractual agreement by the
State to make payments to a public authority, municipality or other entity, the
State's obligation to make such payments is generally expressly made subject to
appropriation by the Legislature and the actual availability of money to the
State for making the payments. The State has also entered into a
contractual-obligation financing arrangement with the New York Local Government
Assistance Corporation ("LGAC") to restructure the way the State makes certain
local aid payments.

The State also participates in the issuance of certificates of
participation ("COPs") in a pool of leases entered into by the State's Office
of General Services on behalf of several State departments and agencies
interested in acquiring operational equipment, or in certain cases, real
property. Legislation enacted in 1986 established restrictions upon and
centralized State control, through the Comptroller and the Director of the
Budget, over the issuance of COPs representing the State's contractual
obligation, subject to annual appropriation by the Legislature and availability
of money, to make installment or lease-purchase payments for the State's
acquisition of such equipment or real property.

The State has never defaulted on any of its general obligation
indebtedness or its obligations under lease-purchase or contractual-obligation
financing arrangements and has never been called upon to make any direct
payments pursuant to its guarantees although there can be no assurance that
such a default or call will not occur in the future.

The State also employs moral obligation financing. Moral obligation
financing generally involves the issuance of debt by a public authority to
finance a revenue-producing project or other activity. The debt is secured by
project revenues and statutory provisions requiring the State, subject to
appropriation by the Legislature, to make up any deficiencies which may occur
in the issuer's debt service reserve fund. There has never been a default on
any moral obligation debt of any public authority although there can be no
assurance that such a default will not occur in the future.

The State anticipates that its capital programs will be financed, in part,
through borrowings by the State and public authorities in the 1997-98 fiscal
year. The State expects to issue $605 million in general obligation bonds
(including $140 million for purposes of redeeming outstanding BANs) and $140
million in general obligation commercial paper. The Legislature has also
authorized the issuance of up to $311 million in COPs during the State's
1997-98 fiscal year for equipment purchases. The projection of the State
regarding its borrowings for the 1997-98 fiscal year may change if
circumstances require.

Borrowings by other public authorities pursuant to lease-purchase and
contractual-obligation financings for capital programs of the State are
projected to total $1.9 billion, including costs of issuances, reserve funds,
and other costs, net of anticipated refundings and other adjustments for
1997-98 capital projects. Included therein are borrowings by (i) DASNY for the
State University of New York ("SUNY"), The City University of New York
("CUNY"), health facilities, and mental health facilities; (ii) the Thruway
Authority for the Dedicated Highway and Bridge Trust Fund and Consolidated
Highway Improvement Program; (iii) UDC

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(doing business as the Empire State Development Corporation) for prison and
youth facilities; (iv) the Housing Finance Agency ("HFA") for housing programs;
and (v) borrowings by the Environmental Facilities Corporation ("EFC") and
other authorities. In addition, in the 1997 legislative session, the
Legislature also approved two new authorizations for lease-purchase and
contractual obligation financings. An aggregate $425 million was authorized for
four public authorities (Thruway Authority, DASNY, UDC and HFA) for the
Community Enhancement Facility Program for economic development purposes,
including sports facilities, cultural institutions, transportation,
infrastructure and other community facility projects. DASNY was also authorized
to issue up to $40 million to finance the expansion and improvement of
facilities at the Albany County airport.

In addition to the arrangements described above, State law provides for
the creation of State municipal assistance corporations, which are public
authorities established to aid financially troubled localities. The Municipal
Assistance Corporation for The City of New York ("MAC") was created to provide
financing assistance to New York City (the "City"). To enable MAC to pay debt
service on its obligations, MAC receives, subject to annual appropriation by
the Legislature, receipts from the 4% New York State Sales Tax for the benefit
of New York City, the State-imposed stock transfer tax and, subject to certain
prior liens, certain local assistance payments otherwise payable to the City.
The legislation creating MAC also includes a moral obligation provision. Under
its enabling legislation, MAC's authority to issue bonds and notes (other than
refunding bonds and notes) expired on December 31, 1984. In 1995, the State
created the Municipal Assistance Corporation for the City of Troy ("Troy MAC").
The bonds issued by Troy MAC, however, do not include moral obligation
provisions.

The 1997-1998 State Financial Plan. The State's budget for the State's
1997-98 fiscal year, commencing on April 1, 1997 and ending on March 31, 1998,
was enacted by the Legislature on August 4, 1997. The State Financial Plan for
the 1997-98 fiscal year (the "State Financial Plan") was formulated on August
11, 1997 and is based on the State's budget as enacted by the Legislature and
signed into law by the Governor, as well as actual results for the first
quarter of the current fiscal year. The State Financial Plan is updated in
October and January. The State Financial Plan currently is projected to be
balanced on a cash basis; however there can be no assurance that the State
Financial Plan will continue to be in balance. Total General Fund receipts and
transfers from other funds are projected to be $35.09 billion, while total
General Fund disbursements and transfers to other funds are projected to be
$34.60 billion. After adjustments for comparability, the adopted 1997-98 budget
projects a year-over-year increase in General Fund disbursements of 5.2
percent. As compared to the Governor's proposed budget as revised in February
1997, the State's adopted budget for 1997-98 increases General Fund spending by
$1.70 billion, primarily from increases for local assistance ($1.3 billion).
Resources used to fund these additional expenditures include $540 million in
increased revenues projected for 1997-98, increased resources produced in the
1996-1997 fiscal year that will be utilized in 1997- 1998, reestimates of
social service, fringe benefit and other spending, and certain non-recurring
resources.

The State Financial Plan includes actions that will have an effect on the
budget outlook for State fiscal year 1997-98 and beyond. The State Division of
the Budget ("DOB") estimates that the 1997-98 State Financial Plan contains
actions that provide non-recurring resources or savings totaling approximately
$270 million. These include the use of $200 million in federal reimbursement
funds available from retroactive social service claims approved by the federal
government in April 1997. The balance is composed of various other actions,
primarily the transfer of unused special revenue fund balances to the General
Fund.

The State closed projected budget gaps of $5.0 billion, $3.9 billion and
$2.3 billion for its 1995-96 through 1997-98 fiscal years, respectively. The
1998-99 gap was projected at $1.68 billion, in the outyear projections
submitted to the legislature in February 1997. As a result of changes made in
the enacted budget, that gap is now expected to be about the same or smaller
than the amount previously projected, after application of the $530 million
reserve for future needs. The expected gap is smaller than the three previous
budget gaps closed by the State.

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The outyear projection will be impacted by a variety of factors. Certain
actions taken in the State's 1997-98 fiscal year, such as medicaid and welfare
reforms, are expected to provide recurring savings in future fiscal years.
Continued controls on State agency spending will also provide recurring
savings. The availability of $530 million in reserves created as a part of the
1997-98 adopted budget and included in the State Financial Plan is expected to
benefit the 1998-99 fiscal year. Sustained growth in the State's economy and
continued declines in welfare case load and health care costs would also
produce additional savings in the State Financial Plan. Finally, various
federal actions, including the potential benefit effect on State tax receipts
from changes to the federal tax treatment of capital gains, would potentially
provide significant benefits to the State over the next several years.

In recent years, State actions affecting the level of receipts and
disbursements, the relative strength of the State and regional economy, actions
of the federal government and other factors have created structural budget gaps
for the State. These gaps resulted from a significant disparity between
recurring revenues and the costs of maintaining or increasing the level of
support for State programs. To address a potential imbalance in any given
fiscal year, the State would be required to take actions to increase receipts
and/or reduce disbursements as it enacts the budget for that year, and under
the State Constitution, the Governor is required to propose a balanced budget
each year. There can be no assurance, however, that the Legislature will enact
the Governor's proposals or that the State's actions will be sufficient to
preserve budgetary balance in a given fiscal year or to align recurring
receipts and disbursements in future fiscal years.

Uncertainties with regard to the economy, as well as the outcome of
certain litigation now pending against the State, could produce adverse effects
on the State's projections of receipts and disbursements. For example, changes
to current levels of interest rates or deteriorating world economic conditions
could have an adverse effect on the State economy and produce results in the
current fiscal year that are worse than predicted. Similarly, adverse judgments
in legal proceedings against the State could exceed amounts reserved in the
1996-97 Financial Plan for payment of such judgments and produce additional
unbudgeted costs to the State.

In recent years, the State has failed to adopt a budget prior to the
beginning of its fiscal year. A delay in the adoption of the State's budget
beyond the statutory April 1 deadline could delay the projected receipt by the
City of State aid, and there can be no assurance that State budgets in future
fiscal years will be adopted by the April 1 statutory deadline.

The following discussion summarizes the State Financial Plan and recent
fiscal years with particular emphasis on the State's General Fund. Pursuant to
statute, the State updates the financial plan at least on a quarterly basis.
Due to changing economic conditions and information, public statements or
reports may be released by the Governor, members of the Legislature, and their
respective staffs, as well as others involved in the budget process from time
to time. Those statements or reports may contain predictions, projections or
other items of information relating to the State's financial condition,
including potential operating results for the current fiscal year and projected
baseline gaps for future fiscal years, that may vary materially and adversely
from the information provided herein.

The General Fund is the principal operating fund of the State and is used
to account for all financial transactions, except those required to be
accounted for in another fund. It is the State's largest fund and receives
almost all State taxes and other resources not dedicated to particular
purposes. In the State's 1997-98 fiscal year, the General Fund is expected by
the State to account for approximately 48 percent of total governmental-funds
disbursements and 71 percent of total State Funds disbursements. General Fund
moneys are also transferred to other funds, primarily to support certain
capital projects and debt service payments in other fund types.

The General Fund is currently projected to be balanced on a cash basis for
the 1997-98 fiscal year; however there can be no assurance that the General
Fund will remain balanced for the entire fiscal year. Total

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receipts are projected to be $35.09 billion, an increase of $2 billion over
total receipts in the prior fiscal year. Total General Fund disbursements are
projected to be $34.60 billion, an increase of $2.05 billion over the total
amount disbursed and transferred in the prior fiscal year.

In addition to the General Fund, the State Financial Plan includes Special
Revenue Funds, Capital Projects Funds and Debt Service Funds.

Special Revenue Funds are used to account for the proceeds of specific
revenue sources such as Federal grants that are legally restricted, either by
the Legislature or outside parties, to expenditures for specified purposes.
Although activity in this fund type is expected to comprise more than 42
percent of total governmental funds receipts and disbursements in the 1997-98
fiscal year, about three-quarters of that activity relates to Federally-funded
programs.

Projected receipts in this fund type total $28.22 billion, an increase of
$2.51 billion over the prior year. Projected disbursements in this fund type
total $28.45 billion, an increase of $2.43 billion over 1996-97 levels.
Disbursements from Federal funds, primarily the Federal share of Medicaid and
other social services programs, are projected to total $21.19 billion in the
1997-98 fiscal year. Remaining projected spending of $7.26 billion primarily
reflects aid to SUNY supported by tuition and dormitory fees, education aid
funded from lottery receipts, operating aid payments to the Metropolitan
Transportation Authority (the "MTA") funded from the proceeds of dedicated
transportation taxes, and costs of a variety of self-supporting programs which
deliver services financed by user fees.

Capital Projects Funds account for the financial resources used for the
acquisition, construction, or rehabilitation of major State capital facilities
and for capital assistance grants to certain local governments or public
authorities. This fund type consists of the Capital Projects Fund, which is
supported by tax dollars transferred from the General Fund, and various other
capital funds established to distinguish specific capital construction purposes
supported by other revenues. In the 1997-98 fiscal year, activity in these
funds is expected to comprise 5 percent of total governmental receipts and
disbursements.

Total receipts in this fund type are projected at $3.30 billion. Bond and
note proceeds are expected to provide $605 million in other financing sources.
Disbursements from this fund type are projected to be $3.70 billion, a decrease
of $154 million (4.3 percent) over prior-year levels. The Dedicated Highway and
Bridge Trust Fund is the single largest dedicated fund, comprising an estimated
$982 million (27 percent) of the activity in this fund type. Total spending for
capital projects will be financed through a combination of sources: federal
grants (29 percent), public authority bond proceeds (31 percent), general
obligation bond proceeds (15 percent), and pay-as-you-go revenues (25 percent).

Debt Service Funds are used to account for the payment of principal of,
and interest on, long-term debt of the State and to meet commitments under
lease-purchase and other contractual-obligation financing arrangements. This
fund is expected to comprise 4 percent of total governmental fund receipts and
disbursements in the 1997-98 fiscal year. Receipts in these funds in excess of
debt service requirements are transferred to the General Fund and Special
Revenue Funds, pursuant to law.

The Debt Service Fund type consists of the General Debt Service Fund,
which is supported primarily by tax dollars transferred from the General Fund,
and other funds established to accumulate moneys for the payment of debt
service. In the 1997-98 fiscal year, total disbursements in this fund type are
projected at $3.17 billion, an increase of $64 million or 25 percent, most of
which is explained by increases in the General Fund transfer. The projected
transfer from the General Fund of $2.07 billion is expected to finance 65
percent of these payments.

Prior Fiscal years. A narrative description of cash-basis results in the
General Fund is presented below for the prior three fiscal years.

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New York State's financial operations have improved during recent fiscal
years. During the period 1989-90 through 1991-92, the State incurred General
Fund operating deficits that were closed with receipts from the issuance of
TRANs. A national recession, followed by the lingering economic slowdown in the
New York and regional economy, resulted in repeated shortfalls in receipts and
three budget deficits during those years. During its last five fiscal years,
however, the State has recorded balanced budgets on a cash basis, with positive
fund balances as described below. There can be no assurance, however, that such
trends will continued.

Fiscal year 1996-97. The State ended its 1996-97 fiscal year on March 31,
1997 in balance on a cash basis, with a General Fund cash surplus as reported
by DOB of approximately $1.4 billion. The cash surplus was derived primarily
from higher-than-expected revenues and lower-than-expected spending for social
services programs. The Governor in his Executive Budget applied $1.05 billion
of the cash surplus amount to finance the 1997-98 Financial Plan, and the
additional $373 million is available for use in financing the 1997-98 Financial
Plan when enacted by the State Legislature.

The General Fund closing fund balance was $433 million. Of that amount,
$317 million was in the TSRF, after a required deposit of $15 million and an
additional deposit of $65 million in 1996-97. The TSRF can be used in the event
of any future General Fund deficit, as provided under the State Constitution
and State Finance Law. In addition, $41 million remains on deposit in the CRF.
This fund assists the State in financing any extraordinary litigation costs
during the fiscal year. The remaining $75 million reflects amounts on deposit
in the Community Projects Fund. This fund was created to fund certain
legislative initiatives. The General Fund closing fund balance does not include
$1.86 billion in the tax refund reserve account, of which $521 million was made
available as a result of the Local Government Assistance Corporation ("LGAC")
financing program and was required to be on deposit as of March 31, 1997.

General Fund receipts and transfers from other funds for the 1996-97
fiscal year totaled $33.04 billion, an increase of 0.7 percent from the
previous fiscal year (excluding deposits into the tax refund reserve account).
General Fund disbursements and transfers to other funds totaled $32.90 billion
for the 1996-97 fiscal year, an increase of 0.7 percent from the 1995-96 fiscal
year.

Fiscal Year 1995-96. The State ended its 1995-96 fiscal year on March 31,
1996 with a General Fund cash surplus. The DOB reported that revenues exceeded
projections by $270 million, while spending for social service programs was
lower than forecast by $120 million and all other spending was lower by $55
million. From the resulting benefit of $445 million, a $65 million voluntary
deposit was made into the TSRF, and $380 million was used to reduce 1996-97
Financial Plan liabilities by accelerating 1996-97 payments, deferring 1995-96
revenues, and making a deposit to the tax refund reserve account.

The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance is
attributable to the $65 million voluntary deposit to the TSRF, a $15 million
required deposit to the TSRF, a $40 million deposit to the CRF, and a $9
million deposit to the Revenue Accumulation Fund. The closing fund balance
includes $237 million on deposit in the TSRF, to be used in the event of any
future General Fund deficit as provided under the State Constitution and State
Finance Law. In addition, $41 million is on deposit in the CRF. The CRF was
established in State fiscal year 1993-94 to assist the State in financing the
costs of extraordinary litigation. The remaining $9 million reflects amounts on
deposit in the Revenue Accumulation Fund. This fund was created to hold certain
tax receipts temporarily before their deposit to other accounts. In addition,
$678 million was on deposit in the tax refund reserve account, of which $521
million was necessary to complete the restructuring of the State's cash flow
under the LGAC program.

General Fund receipts totaled $32.81 billion, a decrease of 1.1 percent
from 1994-95 levels. This decrease reflects the impact of tax reductions
enacted and effective in both 1994 and 1995. General Fund

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disbursements totaled $32.68 billion for the 1995-96 fiscal year, a decrease of
2.2 percent from 1994-95 levels. Mid-year spending reductions, taken as part of
a management review undertaken in October at the direction of the Governor,
yielded savings from Medicaid utilization controls, office space consolidation,
overtime and contractual expense reductions, and statewide productivity
improvements achieved by State agencies.

Fiscal Year 1994-95. The State ended its 1994-95 fiscal year with the
General Fund in balance. The $241 million decline in the fund balance reflects
the planned use of $264 million from the CRF, partially offset by the required
deposit of $23 million to the TSRF. In addition, $278 million was on deposit in
the tax refund reserve account, $250 million of which was deposited to continue
the process of restructuring the State's cash flow as part of the LGAC program.
The closing fund balance of $158 million reflects $157 million in the TSRF and
$1 million in the CRF.

General Fund receipts totaled $33.16 billion, an increase of 2.9 percent
from 1993-94 levels. General Fund disbursements totaled $33.40 billion for the
1994-95 fiscal year, an increase of 4.7 percent from the previous fiscal year.
The increase in disbursements was primarily the result of one-time litigation
costs for the State, funded by the use of the CRF, offset by $188 million in
spending reductions initiated in January 1995 to avert a potential gap in the
1994-95 State Financial Plan. These actions included savings from a hiring
freeze, halting the development of certain services, and the suspension of
non-essential capital projects.

Other Funds. Activity in the three other governmental funds has remained
relatively stable over the last three fiscal years, with federally-funded
programs comprising approximately two-thirds of these funds. The most
significant change in the structure of these funds has been the redirection of
a portion of transportation-related revenues from the General Fund to two new
dedicated funds in the Special Revenue and Capital Projects fund types. These
revenues are used to support the capital programs of the Department of
Transportation and the MTA.

In the Special Revenue Funds, disbursements increased from $24.38 billion
to $26.02 billion over the last three years, primarily as a result of increased
costs for the federal share of Medicaid. Other activity reflected dedication of
taxes to a new fund for mass transportation, new lottery games, and new fees
for criminal justice programs.

Disbursements in the Capital Projects Funds declined from $3.62 billion to
$3.54 billion over the last three years, as spending for miscellaneous capital
programs decreased, partially offset by increases for mental hygiene, health
and environmental programs. The composition of this fund type's receipts also
changed as the dedicated transportation taxes began to be deposited, general
obligation bond proceeds declined substantially, federal grants remained
stable, and reimbursements from public authority bonds (primarily
transportation related) increased. The increase in the negative fund balance in
1994-95 resulted from delays in reimbursements caused by delays in the timing
of public authority bond sales.

Activity in the Debt Service Funds reflected increased use of bonds during
the three-year period for improvements to the State's capital facilities and
the continued implementation of the LGAC fiscal reform program. The increases
were moderated by the refunding savings achieved by the State over the last
several years using strict present value savings criteria. The growth in LGAC
debt service was offset by reduced short-term borrowing costs reflected in the
General Fund.

State Financial Plan Considerations. The economic and financial condition
of the State may be affected by various financial, social, economic and
political factors. These factors can be very complex, may vary from fiscal year
to fiscal year, and are frequently the result of actions taken not only by the
State and its agencies and instrumentalities, but also by entities, such as the
federal government, that are not under the control of the State. For example,
various proposals relating to federal tax and spending policies that are
currently being publicly discussed and debated could, if enacted, have a
significant impact on the State's

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financial condition in the current and future fiscal years. Because of the
uncertainty and unpredictability of the changes, their impact cannot, as a
practical matter, be included in the assumptions underlying the State's
projections at this time.

The State Financial Plan is based upon forecasts of national and State
economic activity developed through both internal analysis and review of State
and national economic forecasts prepared by commercial forecasting services and
other public and private forecasters. Economic forecasts have frequently failed
to predict accurately the timing and magnitude of changes in the national and
the State economies. Many uncertainties exist in forecasts of both the national
and State economies, including consumer attitudes toward spending, the extent
of corporate and governmental restructuring, federal fiscal and monetary
policies, the level of interest rates, and the condition of the world economy,
which could have an adverse effect on the State. There can be no assurance that
the State economy will not experience results in the current fiscal year that
are worse than predicted, with corresponding material and adverse effects on
the State's projections of receipts and disbursements.

Projections of total State receipts in the State Financial Plan are based
on the State tax structure in effect during the fiscal year and on assumptions
relating to basic economic factors and their historical relationships to State
tax receipts. In preparing projections of State receipts, economic forecasts
relating to personal income, wages, consumption, profits and employment have
been particularly important. The projection of receipts from most tax or
revenue sources is generally made by estimating the change in yield of such tax
or revenue source caused by economic and other factors, rather than by
estimating the total yield of such tax or revenue source from its estimated tax
base. The forecasting methodology, however, ensures that State fiscal year
estimates for taxes that are based on a computation of annual liability, such
as the business and personal income taxes, are consistent with estimates of
total liability under such taxes.

Projections of total State disbursements are based on assumptions relating
to economic and demographic factors, levels of disbursements for various
services provided by local governments (where the cost is partially reimbursed
by the State), and the results of various administrative and statutory
mechanisms in controlling disbursements for State operations. Factors that may
affect the level of disbursements in the fiscal year include uncertainties
relating to the economy of the nation and the State, the policies of the
federal government, and changes in the demand for and use of State services.

The DOB believes that its projections of receipts and disbursements
relating to the current State Financial Plan, and the assumptions on which they
are based, are reasonable. Actual results, however, could differ materially and
adversely from the projections set forth in this Annual Information Statement.
In the past, the State has taken management actions and made use of internal
sources to address potential State Financial Plan shortfalls, and DOB believes
it could take similar actions should variances occur in its projections for the
current fiscal year.

In recent years, State actions affecting the level of receipts and
disbursements, the relative strength of the State and regional economy, actions
of the federal government and other factors, have created structural budget
gaps for the State. These gaps resulted from a significant disparity between
recurring revenues and the costs of maintaining or increasing the level of
support for State programs. To address a potential imbalance in any given
fiscal year, the State would be required to take actions to increase receipts
and/or reduce disbursements as it enacts the budget for that year, and under
the State Constitution, the Governor is required to propose a balanced budget
each year. There can be no assurance, however, that the Legislature will enact
the Governor's proposals or that the State's actions will be sufficient to
preserve budgetary balance in a given fiscal year or to align recurring
receipts and disbursements in future fiscal years.

The State Financial Plan is based upon a July 1997 projection by DOB of
national and State economic activity. The information below summarizes the
national and State economic situation and outlook upon which projections of
receipts and certain disbursements were made for the 1997-98 Financial Plan.

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On August 22, 1996 the President signed the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (the "1996 Welfare Act"). This new
law made significant changes to welfare and other benefit programs. Major
changes included conversion of AFDC into the TANF block grant to states, new
work requirements and durational limits on recipients of TANF, and limits on
assistance provided to immigrants. City expenditures as a result of welfare
reform are estimated in the Financial Plan at $49 million in fiscal year 1998,
$45 million in fiscal year 1999, $38 million in fiscal year 2000 and $44
million in fiscal year 2001. In addition, the City's naturalization initiative,
CITIZENSHIP NYC, will assist immigrants made ineligible under Federal law to
regain eligibility for benefits, by helping them through the application
process for citizenship. The Financial Plan assumes that 75% of those
immigrants who otherwise would have lost benefits will become citizens,
resulting in projected savings to the City in public assistance expenditures of
$6 million in fiscal year 1999, $24 million in fiscal year 2000 and $25 million
in fiscal year 2001. Federal legislation enacted August 5, 1997, reinstated
eligibility for even more immigrants currently on the rolls than projected. The
outyear estimates made by OMB are preliminary and depend on a variety of
factors, which are impossible to predict, including the implementation of
workfare and child care programs modified by newly enacted State law, the
impact of possible litigation challenging the law, and the impact of adverse
economic developments on welfare and other benefit programs. In accordance with
the Federal welfare reform law, the Governor submitted a State plan to the
Federal government and such plan was deemed complete as of December 2, 1996.
New York State's welfare reform, bringing the State into compliance with the
1996 Welfare Act and making changes to the Home Relief program, was signed into
law on August 20, 1997. The Governor submitted an amended State plan to the
Federal government, reflecting these changes, on September 20, 1997.
Implementation of the changes at the State level will in part determine the
possible costs or savings to the City. it is expected that OMB's preliminary
estimates of potential costs will change, based on new policies to be developed
by the State and City with respect to benefits no longer funded as Federal
entitlements.

The Governor is required to submit a balanced budget to the State
Legislature and has indicated that he will close any potential imbalance in the
State Financial Plan primarily through General Fund expenditure reductions and
without increases in taxes or deferrals of scheduled tax reductions. It is
expected by the State DOB that the State Financial Plan will reflect a
continuing strategy of substantially reduced State spending, including agency
consolidations, reductions in the State workforce, and efficiency and
productivity initiatives. The division of the Budget intends to update the
State Financial Plan and provide an update to the Annual Information Statement
upon release of the 1997-98 Executive Budget.

U.S. Economy. The national economy has resumed a more robust rate of
growth after a "soft landing" in 1995, with approximately 14 million jobs added
nationally since early 1992. The State economy has continued to expand, but
growth remains somewhat slower than in the nation. Although the State has added
approximately 300,000 jobs since late 1992, employment growth in the State has
bee hindered during recent years by significant cutbacks in the computer and
instrument manufacturing, utility, defense, and banking industries. Government
downsizing has also moderated these job gains.

DOB forecasts that national economic growth will be quite strong in the
first half of calendar 1997, but will moderate considerably as the year
progresses. The overall growth rate of the national economy for calendar year
1997 is expected to be practically identical to the consensus forecast of a
widely followed survey of national economic forecasters. Growth in real Gross
Domestic Product for 1997 is projected to be 3.6 percent, with an anticipated
decline in net exports and continued restraint in Federal spending more than
offset by increases in consumption and investment. Inflation, as measured by
the Consumer Price Index, is projected to remain subdued at about 2.6 percent
due to improved productivity and foreign competition. Personal income and wages
are projected to increase by 6.0 percent and 6.7 percent respectively.

New York Economy. The forecast of the State's economy shows moderate
expansion during the first half of calendar 1997 with the trend continuing
through the year. Although industries that export goods and services are
expected to continue to do well, growth is expected to be moderated by tight
fiscal constraints on the health care and social services industries.

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The forecast for continued growth, and any resultant impact on the State's
1997-98 Financial Plan, contains some uncertainties. Stronger-than-expected
gains in employment could lead to a significant improvement in consumer
spending. Investments could also remain robust. Conversely, hints of
accelerating inflation or fears of excessively rapid economic growth could
create upward pressures on interest rates. In addition, the State economic
forecast could over- or underestimate the level of future bonus payments or
inflation growth, resulting in forecasted average wage growth that could differ
significantly form actual growth. Similarly, the State forecast could fail to
correctly account for declines in banking employment and the direction of
employment change that is likely to accompany telecommunications and energy
deregulation.

New York is the third most populous state in the nation and has a
relatively high level of personal wealth. The State's economy is diverse, with
a comparatively large share of the nation's finance, insurance, transportation,
communications and services employment, and a very small share of the nation's
farming and mining activity. The State's location and its excellent air
transport facilities and natural harbors have made it an important link in
international commerce. Travel and tourism constitute an important part of the
economy. Like the rest of the nation, New York has a declining proportion of
its workforce engaged in manufacturing, and an increasing proportion engaged in
service industries. The following paragraphs summarize the state of major
sectors of the New York economy:

Services: The services sector, which includes entertainment, personal
services, such as health care and auto repairs, and business-related
services, such as information processing, law and accounting, is the
State's leading economic sector. The services sector accounts for more
than three of every ten nonagricultural jobs in New York and has a
noticeably higher proportion of total jobs than does the rest of the
nation.

Manufacturing: Manufacturing employment continues to decline in
importance in New York, as in most other states, and New York's economy is
less reliant on this sector than is the nation. The principal
manufacturing industries in recent years produced printing and publishing
materials, instruments and related products, machinery, apparel and
finished fabric products, electronic and other electric equipment, food
and related products, chemicals and allied products, and fabricated metal
products.

Trade: Wholesale and retail trade is the second largest sector in terms
of nonagricultural jobs in New York but is considerably smaller when
measured by income share. Trade consists of wholesale businesses and
retail businesses, such as department stores and eating and drinking
establishments.

Finance, Insurance and Real Estate: New York City is the nation's
leading center of banking and finance and, as a result, this is a far more
important sector in the State than in the nation as a whole. Although this
sector accounts for under one-tenth of all nonagricultural jobs in the
State, it contributes over one-sixth of all nonfarm labor and proprietors'
income.

Agriculture: Farming is an important part of the economy of large
regions of the State, although it constitutes a very minor part of total
State output. Principal agricultural products of the State include milk
and dairy products, greenhouse and nursery products, apples and other
fruits, and fresh vegetables. New York ranks among the nation's leaders in
the production of these commodities.

Government: Federal, State and local government together are the third
largest sector in terms of nonagricultural jobs, with the bulk of the
employment accounted for by local governments. Public education is the
source of nearly one-half of total state and local government employment.

Relative to the nation, the State has a smaller share of manufacturing and
construction and a larger share of service-related industries. The State's
finance, insurance, and real estate share, as measured by income, is
particularly large relative to the nation. The State is likely to be less
affected than the nation as a

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whole during an economic recession that is concentrated in manufacturing and
construction, but likely to be more affected during a recession that is
concentrated in the service-producing sector.

In the calendar years 1987 through 1996, the State's rate of economic
growth was somewhat slower than that of the nation. In particular, during the
1990-91 recession and post-recession period, the economy of the State, and that
of the rest of the Northeast, was more heavily damaged than that of the nation
as a whole and has been slower to recover. The total employment growth rate in
the State has been below the national average since 1987. The unemployment rate
in the State dipped below the national rate in the second half of 1981 and
remained lower until 1991; since then, it has been higher. According to data
published by the US Bureau of Economic Analysis, total personal income in the
State has risen more slowly than the national average since 1988.

State per capita personal income has historically been significantly
higher than the national average, although the ratio has varied substantially.
Because the City is a regional employment center for a multi-state region,
State personal income measured on a residence basis understates the relative
importance of the State to the national economy and the size of the base to
which State taxation applies.

Financial Plan Update. The State is required to issue Financial Plan
updates to the cash-basis State Financial Plan in July, October, and January,
respectively. These quarterly updates reflect analysis of actual receipts and
disbursements for each respective period and revised estimates of receipts and
disbursements for the then current fiscal year. The First Quarter Update was
incorporated into the cash-basis State Financial Plan of August 15, 1997 (the
"August Financial Plan").

The State issued its first update to the cash-basis 1997-98 State
Financial Plan (the "Mid-Year Update") on October 30, 1997. No revisions were
made to the estimates of receipts and disbursements based on the current
economic forecasts for both the nation and the State. The Mid-Year Update
continues to reflect a balanced 1997-98 State Financial Plan, with a projected
General Fund reserve for future needs of $530 million. This projected surplus
is now considered to be at the low end of the range of possible outcomes for
the 1997-98 fiscal year.

The forecast of the State economy also remains unchanged from the one
formulated with the August Financial Plan. Steady growth was projected to
continue through the second half of 1997. Personal income was projected to
increase by 6.1 percent in 1997 and 4.5 percent in 1998, reflecting projected
wage growth fueled in part by financial sector bonus payments. The forecast
projected employment increases of 1.4 percent in 1997 and 1.0 percent in 1998.

The projected 1997-98 closing fund balance in the General Fund of $927
million reflects a reserve for future needs of $530 million, a balance of $332
million in the Tax Stabilization Reserve Fund (following a payment of $15
million during the current fiscal year) and a balance of $65 million in the
Contingency Reserve Fund (following a deposit of $24 million during the current
fiscal year). These two reserves remain available to help offset potential
risks to the Financial Plan. Based upon experience to date, it is likely that
the closing fund balance will be larger, providing additional resources for the
1998-99 fiscal year.

All governmental funds receipts and disbursements are also unchanged. The
projected closing fund balance for all governmental funds remains $1.43
billion. The annual increase in spending for all governmental funds remains
approximately 7 percent. Total projected receipts in all governmental funds
(excluding transfers) are approximately $67.31 billion. All funds disbursements
(excluding transfers) are $67.37 billion. Total net other financing sources
across all governmental funds are projected at $505 million.

On September 11, 1997, the State Comptroller released a report entitled
"The 1997-98 Budget: Fiscal Review and Analysis" in which he identified several
risks to the State Financial Plan and estimated that the

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State faces a potential imbalance in receipts and disbursements of
approximately $1.5 billion for the State's 1998-99 fiscal year and
approximately $3.4 billion for the State's 1999-00 fiscal year. The 1998-99
fiscal year estimate by the State Comptroller is within the range discussed by
the Division of the Budget in the section entitled "Outyear Projections of
Receipts and Disbursements" in the Annual Information Statement of August 15,
1997. Any increase in the 1997-98 reserve for future needs would reduce this
imbalance further and, based upon results to date, such an outcome is
considered possible. In addition, the Comptroller identified risks in future
years from an economic slowdown and from spending and revenue actions enacted
as a part of the 1997-98 budget that will add pressure to future budget
balance. The Governor is required to submit a balanced budget each year to the
State Legislature.

On August 11, 1997 President Clinton exercised his line item veto powers
to cancel a provision in the Federal Balanced Budget Act of 1997 that would
have deemed New York State's health care provider taxes to be approved by the
federal government. New York and several other states have used hospital rate
assessments and other provider tax mechanisms to finance various Medicaid and
health insurance programs since the early 1980s. The State's process of
taxation and redistribution of health care dollars was sanctioned by federal
legislation in 1987 and 1991. However, the federal Health Care Financing
Administration (HCFA) regulations governing the use of provider taxes require
the State to seek waivers from HCFA that would grant explicit approval of the
provider taxing system now in place. The State filed the majority of these
waivers with HCFA in 1995 but has yet to receive final approval.

The Balanced Budget Act of 1997 provision passed by Congress was intended
to rectify the uncertainty created by continued inaction on the State's waiver
requests. A federal disallowance of the State's provider tax system could
jeopardize up to $2.6 billion in Medicaid reimbursement received through
December 31, 1998. The President's veto message valued any potential
disallowance at $200 million. The 1997-98 Financial Plan does not anticipate
any provider tax disallowance.

On October 9, 1997 the President offered a corrective amendment to the
HCFA regulations governing such taxes. The Governor has stated that this
proposal does not appear to address all of the State's concerns, and
negotiations are ongoing between the State and HCFA. In addition, the City of
New York and other affected parties in the health care industry have filed a
lawsuit challenging the constitutionality of the President's line item veto.

On July 31, 1997, the New York State Tax Appeals Tribunal delivered a
decision involving the computation of itemized deductions and personal income
taxes of certain high income taxpayers. By law, the State cannot appeal the
Tribunal's decision. The decision will lower income tax liability attributable
to such taxpayers for the 1997 and earlier open tax years, as well as on a
prospective basis.

Ratings Agencies. On August 28, 1997, Standard & Poor's ("S&P") revised
its ratings on the State's general obligation bonds to A from A-, and, in
addition, revised its ratings on the State's moral obligation, lease purchase,
guaranteed and contractual obligation debt. S&P rated the State's general
obligation bonds AA- from August 1987 to March 1990 and A+ from November 1982
to August 1987. In March 1990, S&P lowered its rating of all of the State's
general obligation bonds from AA- to A. On January 13, 1992, S&P lowered its
rating on the State's general obligation bonds from A to A-, and, in addition,
reduced its ratings on the State's moral obligation, lease purchase, guaranteed
and contractual obligation debt. On April 26, 1993 S&P revised the rating
outlook assessment to stable. On February 14, 1994, S&P revised its outlook on
the State's general obligation bonds to positive and, on August 5, 1996,
confirmed its A- rating.

On February 10, 1997, Moody's confirmed its A2 rating on the State's
general obligation long-term indebtedness. On June 6, 1990, Moody's changed its
ratings on all of the State's outstanding general obligation bonds from A1 to
A, the rating having been A1 since May 27, 1986. On November 12, 1990, Moody's
confirmed the A rating. On January 6, 1992, Moody's reduced its ratings on
outstanding limited-liability State lease purchase and contractual obligations
from A to Baa1.

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Authorities. The fiscal stability of the State is related in part to the
fiscal stability of its public authorities, which generally have responsibility
for financing, constructing and operating revenue-producing public benefit
facilities. Public authorities are not subject to the constitutional
restrictions on the incurrence of debt which apply to the State itself, and may
issue bonds and notes within the amounts of, and as otherwise restricted by,
their legislative authorization. The State's access to the public credit
markets could be impaired, and the market price of its outstanding debt may be
materially adversely affected, if any of its public authorities were to default
on their respective obligations. As of September 30, 1996 there were 17 public
authorities that had outstanding debt of $100 million or more each, and the
aggregate outstanding debt, including refunding bonds, of all state public
authorities was $75.4 billion.

There are numerous public authorities, with various responsibilities,
including those which finance, construct and/or operate revenue producing
public facilities. Public authority operating expenses and debt service costs
are generally paid by revenues generated by the projects financed or operated,
such as tolls charged for the use of highways, bridges or tunnels, rentals
charged for housing units, and charges for occupancy at medical care
facilities.

In addition, State legislation authorizes several financing techniques for
public authorities. Also, there are statutory arrangements providing for State
local assistance payments otherwise payable to localities to be made under
certain circumstances to public authorities. Although the State has no
obligation to provide additional assistance to localities whose local
assistance payments have been paid to public authorities under these
arrangements, if local assistance payments are so diverted, the affected
localities could seek additional State assistance.

Some authorities also receive monies from State appropriations to pay for
the operating costs of certain of their programs. As described below, the MTA
receives the bulk of this money in order to carry out mass transit and commuter
services.

The State's experience has been that if an Authority suffers serious
financial difficulties, both the ability of the State and the Authorities to
obtain financing in the public credit markets and the market price of the
State's outstanding bonds and notes may be adversely affected. The New York
State HFA, the New York State Urban Development Corporation and certain other
Authorities have in the past required and continue to require substantial
amounts of assistance from the State to meet debt service costs or to pay
operating expenses. Further assistance, possibly in increasing amounts, may be
required for these, or other, Authorities in the future. In addition, certain
other statutory arrangements provide for State local assistance payments
otherwise payable to localities to be made under certain circumstances to
certain Authorities. The State has no obligation to provide additional
assistance to localities whose local assistance payments have been paid to
Authorities under these arrangements. However, in the event that such local
assistance payments are so diverted, the affected localities could seek
additional State funds.

Metropolitan Transportation Authority. The MTA oversees the operation of
the City's subway and bus lines by its affiliates, the New York City Transit
Authority and the Manhattan and Bronx Surface Transit Operating Authority
(collectively, the "TA"). The MTA operates certain commuter rail and bus lines
in the New York Metropolitan area through MTA's subsidiaries, the Long Island
Rail Road Company, the Metro-North Commuter Railroad Company and the
Metropolitan Suburban Bus Authority. In addition, the Staten Island Rapid
Transit Operating Authority, an MTA subsidiary, operates a rapid transit line
on Staten Island. Through its affiliated agency, the Triborough Bridge and
Tunnel Authority (the "TBTA"), the MTA operates certain intrastate toll bridges
and tunnels. Because fare revenues are not sufficient to finance the mass
transit portion of these operations, the MTA has depended, and will continue to
depend for operating support upon a system of State, local government and TBTA
support, and, to the extent available, Federal operating assistance, including
loans, grants and operating subsidies. If current revenue projections are not
realized and/or operating expenses exceed current projections, the TA or
commuter railroads may be required to seek additional State assistance, raise
fares or take other actions.

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Since 1980, the State has enacted several taxes--including a surcharge on
the profits of banks, insurance corporations and general business corporations
doing business in the 12-county Metropolitan Transportation Region served by
the MTA and a special one-quarter of 1 percent regional sales and use tax--that
provide revenues for mass transit purposes, including assistance to the MTA. In
addition, since 1987, State law has required that the proceeds of a one quarter
of 1% mortgage recording tax paid on certain mortgages in the Metropolitan
Transportation Region be deposited in a special MTA fund for operating or
capital expenses. Further, in 1993 the State dedicated a portion of the State
petroleum business tax to fund operating or capital assistance to the MTA. For
the 1997-98 fiscal year, total State assistance to the MTA is projected to
total approximately $1.2 billion, an increase of $76 million over the 1996-97
fiscal year.

State legislation accompanying the 1996-97 adopted State budget authorized
the MTA, TBTA and TA to issue an aggregate of $6.5 billion in bonds to finance
a portion of a new $12.17 billion MTA capital plan for the 1995 through 1999
calendar years (the "1995-99 Capital Program"). In July 1997, the Capital
Program Review Board approved the 1995-99 Capital Program. This plan supersedes
the overlapping portion of the MTA's 1992-96 Capital Program. This is the
fourth capital plan since the Legislature authorized procedures for the
adoption, approval and amendment of MTA capital programs and is designed to
upgrade the performance of the MTA's transportation systems by investing in new
rolling stock, maintaining replacement schedules for existing assets and
bringing the MTA system into a state of good repair. The 1995-99 Capital
Program assumes the issuance of an estimated $5.1 billion in bonds under this
$6.5 billion aggregate bonding authority. The remainder of the plan is
projected to be financed through assistance from the State, the federal
government, and the City of New York, and from various other revenues generated
from actions taken by the MTA.

There can be no assurance that all the necessary governmental actions for
future capital programs will be taken, that funding sources currently
identified will not be decreased or eliminated, or that the 1995-99 Capital
Program, or parts thereof, will not be delayed or reduced. If the 1995-99
Capital Program is delayed or reduced, ridership and fare revenues may decline,
which could, among other things, impair the MTA's ability to meet its operating
expenses without additional assistance.

Localities. Certain localities outside the City have experienced financial
problems and have requested and received additional State assistance during the
last several State fiscal years. The potential impact on the State of any
future requests by localities for additional assistance is not included in the
projections of the State's receipts and disbursements for the State's 1997-98
fiscal year.

Fiscal difficulties experienced by the City of Yonkers resulted in the
re-establishment of the Financial Control Board for the City of Yonkers by the
State in 1984. That Board is charged with oversight of the fiscal affairs of
Yonkers. Future actions taken by the State to assist Yonkers could result in
increased State expenditures for extraordinary local assistance.

Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the City
of Troy in 1994. The Supervisory Board's powers were increased in 1995, when
Troy MAC was created to help Troy avoid default on certain obligations. The
legislation creating Troy MAC prohibits the City of Troy from seeking federal
bankruptcy protection while Troy MAC bonds are outstanding.

Eighteen municipalities received extraordinary assistance during the 1996
legislative session through $50 million in special appropriations targeted for
distressed cities.

Municipal Indebtedness. Municipalities and school districts have engaged
in substantial short-term and long-term borrowings. In 1995, the total
indebtedness of all localities in the State other than the City was
approximately $19.0 billion. A small portion (approximately $102.3 million) of
that indebtedness represented

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borrowing to finance budgetary deficits and was issued pursuant to State
enabling legislation. State law requires the Comptroller to review and make
recommendations concerning the budgets of those local government units other
than the City authorized by State law to issue debt to finance deficits during
the period that such deficit financing is outstanding. Eighteen localities had
outstanding indebtedness for deficit financing at the close of their fiscal
year ending in 1995.

From time to time, federal expenditure reductions could reduce, or in some
cases eliminate, federal funding of some local programs and accordingly might
impose substantial increased expenditure requirements on affected localities.
If the State, the City or any of the Authorities were to suffer serious
financial difficulties jeopardizing their respective access to the public
credit markets, the marketability of notes and bonds issued by localities
within the State could be adversely affected. Localities also face anticipated
and potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. Long-range potential problems of
declining urban population, increasing expenditures and other economic trends
could adversely affect certain localities and require increasing State
assistance in the future.

Litigation. Certain litigation pending against the State or its officers
or employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these cases are those that involve: (i)
employee welfare benefit plans seeking a declaratory judgment nullifying on the
ground of federal preemption provisions of Section 2807-c of the Public Health
Law and implementing regulations which impose a bad debt and charity care
allowance on all hospital bills and a 13 percent surcharge on inpatient bills
paid by employee welfare benefit plans; (ii) several challenges to provisions
of Chapter 81 of the Laws of 1995 which alter the nursing home Medicaid
reimbursement methodology; (iii) the validity of agreements and treaties by
which various Indian tribes transferred title to the State of certain land in
central and upstate New York; (iv) challenges to the practice of using
patients' Social Security benefits for the costs of care of patients of State
Office of Mental Health facilities; (v) an action against State and City
officials alleging that the present level of shelter allowance for public
assistance recipients is inadequate under statutory standards to maintain
proper housing; (vi) challenges to the practice of reimbursing certain Office
of Mental Health patient care expenses from the client's Social Security
benefits; (vii) alleged responsibility of State officials to assist in
remedying racial segregation in the City of Yonkers; (viii) alleged
responsibility of the State Department of Environmental Conservation for a
plaintiff's inability to complete construction of a cogeneration facility in a
timely fashion and the damages suffered thereby; (ix) challenges to the
promulgation of the State's proposed procedure to determine the eligibility for
and nature of home care services for Medicaid recipients; (x) a challenge to
State implementation of a program which reduces Medicaid benefits to certain
home-relief recipients; (xi) a challenge to the constitutionality of petroleum
business tax assessments authorized by Tax Law SS 301; (xii) an action for
reimbursement from the State for certain costs arising out of the provision of
preschool services and programs for children with handicapping conditions,
pursuant to Sections 4410 (10) and (11) of the Education Law; and (xiii) a
challenge to the constitutionality of the Clean Water/ Clean Air Bond Act of
1996 and its implementing regulations.

Adverse developments in the proceedings described above or the initiation
of new proceedings could affect the ability of the State to maintain a balanced
1997-98 State Financial Plan. In its Notes to its General Purpose Financial
Statements for the fiscal year ended March 31, 1997, the State reports its
estimated liability for awards and anticipated unfavorable judgments at $364
million. There can be no assurance that an adverse decision in any of the above
cited proceedings would not exceed the amount of the 1997-98 State Financial
Plan reserves for the payment of judgments and, therefore, could affect the
ability of the State to maintain a balanced 1997-98 State Financial Plan.

New York City

The fiscal health of the State may also be particularly affected by the
fiscal health of the City, which continues to require significant financial
assistance from the State. The City depends on State aid both to enable the
City to balance its budget and to meet its cash requirements. The State could
also be affected by

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the ability of the City to market its securities successfully in the public
credit markets. The City has achieved balanced operating results for each of
its fiscal years since 1981 as reported in accordance with the then-applicable
GAAP standards. The City's financial plans are usually prepared quarterly, and
the annual financial report for its most recent completed fiscal year is
prepared at the end of October of each year.

In response to the City's fiscal crisis in 1975, the State took action to
assist the City in returning to fiscal stability. Among these actions, the
State established the Municipal Assistance Corporation for the City of New York
("MAC") to provide financing assistance to the City. The State also enacted the
New York State Financial Emergency Act for The City of New York (the "Financial
Emergency Act") which, among other things, established the New York State
Financial Control Board (the "Control Board") to oversee the City's financial
affairs. The State also established the Office of the State Deputy Comptroller
for the City of New York ("OSDC") to assist the Control Board in exercising its
powers and responsibilities and a "Control Period" from 1975 to 1986 during
which the City was subject to certain statutorily-prescribed fiscal-monitoring
arrangements. Although the Control Board terminated the Control Period in 1986
when certain statutory conditions were met, thus suspending certain Control
Board powers, the Control Board, MAC and OSDC continue to exercise various
fiscal-monitoring functions over the City, and upon the occurrence or
"substantial likelihood and imminence" of the occurrence of certain events,
including, but not limited to a City operating budget deficit of more than $100
million, the Control Board is required by law to reimpose a Control Period.

Currently, the City and its "Covered Organizations" (i.e., those which
receive or may receive money from the City directly, indirectly or
contingently) operate under a four-year financial plan (the "City Financial
Plan"), which the City prepares annually and updates periodically and which
includes the City's capital revenue and expense projections and outlines
proposed gap-closing programs for years with projected budget gaps. The City's
projections set forth in the City Financial Plan are based on various
assumptions and contingencies, some of which are uncertain and may not
materialize. Unforeseen developments and changes in major assumptions could
significantly affect the City's ability to balance its budget as required by
State law and to meet its annual cash flow and financing requirements.

Although the City has balanced its budget since 1981, estimates of the
City's revenues and expenditures, which are based on numerous assumptions, are
subject to various uncertainties. If, for example, expected federal or State
aid is not forthcoming, if unforeseen developments in the economy significantly
reduce revenues derived from economically sensitive taxes or necessitate
increased expenditures for public assistance, if the City should negotiate wage
increases for its employees greater than the amounts provided for in the City's
financial plan or if other uncertainties materialize that reduce expected
revenues or increase projected expenditures, then, to avoid operating deficits,
the City may be required to implement additional actions, including increases
in taxes and reductions in essential City services. The City might also seek
additional assistance from the State. Unforeseen developments and changes in
major assumptions could significantly affect the City's ability to balance its
budget as required by State law and to meet its annual cash flow and financing
requirements.

The staffs of the Control Board, OSDC and the City Comptroller issue
periodic reports on the City's financial plans which analyze the City's
forecasts of revenues and expenditures, cash flow, and debt service
requirements for, and financial plan compliance by, the City and its Covered
Organizations. According to recent staff reports, while economic recovery in
New York City has been slower than in other regions of the country, a surge in
Wall Street profitability resulted in increased tax revenues and generated a
substantial surplus for the City in City fiscal year 1996-97. Although several
sectors of the City's economy have expanded recently, especially tourism and
business and professional services, City tax revenues remain heavily dependent
on the continued profitability of the securities industries and the course of
the national economy. These reports have also indicated that recent City
budgets have been balanced in part through the use of non-recurring resources;
that the City Financial Plan tends to rely on actions outside its direct
control; that the City has not yet brought its long-term expenditure growth in
line with recurring revenue growth; and that the City

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is therefore likely to continue to face substantial gaps between forecast
revenues and expenditures in future years that must be closed with reduced
expenditures and/or increased revenues. In addition to these monitoring
agencies, the Independent Budget Office ("IBO") has been established pursuant
to the City Charter to provide analysis to elected officials and the public on
relevant fiscal and budgetary issues affecting the City.

The City Financial Plan currently projects revenues and expenditures for
the 1998 fiscal year balanced in accordance with GAAP; however, there can be no
assurance that revenues and expenditures will be balanced. The City Financial
Plan includes increased tax revenue projections; reduced debt service costs;
the assumed restoration of Federal funding for programs assisting certain legal
aliens; additional expenditures for textbooks, computers, improved education
programs and welfare reform, law enforcement, immigrant naturalization,
initiatives proposed by the City Council and other initiatives; and a proposed
discretionary transfer in the 1998 fiscal year of $300 million of debt service
due in the 1999 fiscal year for budget stabilization purposes. In addition, the
City Financial Plan reflects the discretionary transfer in the 1997 fiscal year
of $1.3 billion of debt service due in the 1998 and 1999 fiscal years, and
includes actions to eliminate a previously projected budget gap for the 1998
fiscal year. These gap closing actions include (i) additional agency actions
totaling $621 million (ii) the proposed sale of various assets; (iii)
additional State aid of $294 million, including a proposal that the State
accelerate a $142 million revenue sharing payment to the City from March 1999;
and (iv) entitlement savings of $128 million which would result from certain of
the reductions in Medicaid spending proposed in the Governor's 1997-1998
Executive Budget and the State making available to the City $77 million of
additional Federal block grant aid, as proposed in the Governor's 1997-1998
Executive Budget. The City Financial Plan also sets forth projections for the
1999 through 2001 fiscal years and projects gaps of $1.8 billion, $2.8 billion
and $2.6 billion for the 1999 through 2001 fiscal years, respectively.

The Financial Plan assumes approval by the State Legislature and the
Governor of (i) a tax reduction program proposed by the City totaling $272
million, $435 million, $465 million and $481 million in the 1998 through 2001
fiscal years, respectively, which includes a proposed elimination of the 4%
City sales tax on clothing items under $500 as of December 1, 1997, and (ii) a
proposed State tax relief program, which would reduce the City property tax and
personal income tax, and which the Financial Plan assumes will be offset by
proposed increased State aid totaling $47 million, $254 million, $472 million
and $722 million in the 1998 through 2001 fiscal years, respectively.

The Financial Plan also assumes (i) approval by the Governor and the State
Legislature of the extension of the 14% personal income tax surcharge, which is
scheduled to expire on December 31, 1999 and the extension of which is
projected to provide revenue of $166 million and $494 million in the 2000 and
2001 fiscal years, respectively, and of the extension of the 12.5% personal
income tax surcharge, which is scheduled to expire on December 31, 1998 and the
extension of which is projected to provide revenue of $188 million, $527
million and $554 million in the 1999 through 2001 fiscal years, respectively;
and (ii) collection of the projected rent payments for the City's airports,
totaling $385 million, $175 million, and $170 million in the 1999, 2000 and
2001 fiscal years, respectively, which may depend on the successful completion
of negotiations with the Port Authority or the enforcement of the City's rights
under the existing leases through pending legal actions. The Financial Plan
provides no additional wage increases for City employees after their contracts
expire in fiscal years 2000 and 2001. In addition, the economic and financial
condition of the City may be affected by various financial, social, economic
and political factors which could have a material effect on the City.

The City's financial plans have been the subject of extensive public
comment and criticism. The City Comptroller has issued a report commenting on
certain developments since the release of the Financial Plan. In his report the
City Comptroller noted, among other things, that tax revenues for the first
quarter of the 1998 fiscal year were above projections in the City Financial
Plan. However, the report also noted that if the stock market decline which has
occurred in recent days were to continued, tax revenue forecasts for subsequent
fiscal years might have to be revised downward. The report concluded that the
City faces, with respect to the

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1998 fiscal year, a possible $112 million surplus or a possible net budget gap
of up to $440 million, and, with respect to the 1999 and subsequent fiscal
years, total net budget gaps between $1.9 billion and $2.8 billion, $2.6
billion and $4.0 billion, and $2.4 billion and $3.8 billion for the 1999
through 2001 fiscal years, which include the gaps set forth in the City
Financial Plan.

In connection with the Financial Plan, the City has outlined a gap-closing
program for the 1999, 2000 and 2001 fiscal years to eliminate the remaining
$1.8 billion, $2.8 billion and $2.6 billion projected gaps for such fiscal
years. This program, which is not specified in detail, assumes for the 1999,
2000 and 2001 fiscal years, respectively, additional agency programs to reduce
expenditures or increase revenues by $580 million, $853 million and $762
million; savings from restructuring City government and privatization and
procurement initiatives of $285 million, $550 million and $550 million;
additional revenue initiatives and asset sales of $180 million, $135 million
and $60 million; additional State aid of $350 million, $500 million and $500
million; additional entitlement cost containment initiatives of $300 million,
$675 million and $675 million; and the availability of $100 million, $100
million and $100 million of the General Reserve. There can be no assurance that
these gap-closing measures can be implemented as planned.

The City's projected budget gaps for the 2000 and 2001 fiscal years do not
reflect the savings expected to result from the prior years' programs to close
the gaps set forth in the City Financial Plan. Thus, for example, recurring
savings anticipated from the actions which the City proposes to take to balance
the fiscal year 1999 budget are not taken into account in projecting the budget
gaps for the 2000 and 2001 fiscal years.

The City's projected budget gaps for the 2000 and 2001 fiscal years do not
reflect the savings expected to result from prior years' programs to close the
gaps set forth in the City Financial Plan. Thus, for example, recurring savings
anticipated from the actions which the City proposes to take to balance the
fiscal year 1998 budget are not taken into account in projecting the budget
gaps for the 2000 and 2001 fiscal years.

Although the City has maintained balanced budgets in each of its last
seventeen fiscal years, and is projected to achieve balanced operating results
for the 1998 fiscal year, there can be no assurance that the gap- closing
actions proposed in the City Financial Plan can be successfully implemented or
that the City will maintain a balanced budget in future years without
additional State aid, revenue increases or expenditure reductions. Additional
tax increases and reductions in essential City services could adversely affect
the City's economic base.

Assumptions. The City Financial Plan is based on numerous assumptions,
including the condition of the City's and the region's economy and a modest
employment recovery and the concomitant receipt of economically sensitive tax
revenues in the amounts projected. The City Financial Plan is subject to
various other uncertainties and contingencies relating to, among other factors,
the extent, if any, to which wage increases for City employees exceed the
annual wage costs assumed for the 1998 through 2001 fiscal years; continuation
of projected interest earnings assumptions for pension fund assets and current
assumptions with respect to wages for City employees affecting the City's
required pension fund contributions; the willingness and ability of the State,
in the context of the State's current financial condition, to provide the aid
contemplated by the City Financial Plan and to take various other actions to
assist the City; the ability of HHC, BOE and other such agencies to maintain
balanced budgets; the willingness of the Federal government to provide the
amount of Federal aid contemplated in the City Financial Plan; adoption of the
City's budgets by the City Council in substantially the forms submitted by the
Mayor; the ability of the City to implement proposed reductions in City
personnel and other cost reduction initiatives, and the success with which the
City controls expenditures; the impact of conditions in the real estate market
on real estate tax revenues; the City's ability to market its securities
successfully in the public credit markets; and unanticipated expenditures that
may be incurred as a result of the need to maintain the City's infrastructure.
Certain of these assumptions have been questioned by the City Comptroller and
other public officials.

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The projections and assumptions contained in the City Financial Plan are
subject to revision which may involve substantial change, and no assurance can
be given that these estimates and projections, which include actions which the
City expects will be taken but which are not within the City's control, will be
realized. The principal projections and assumptions described below are based
on information available in June 1997.

City Employees. Substantially all of the City's full-time employees are
members of labor unions. The Financial Emergency Act requires that all
collective bargaining agreements entered into by the City and the Covered
Organizations be consistent with the City's current financial plan, except for
certain awards arrived at through impasse procedures. During a Control Period,
and subject to the foregoing exception, the Control Board would be required to
disapprove collective bargaining agreements that are inconsistent with the
City's current financial plan.

Under applicable law, the City may not make unilateral changes in wages,
hours or working conditions under any of the following circumstances: (i)
during the period of negotiations between the City and a union representing
municipal employees concerning a collective bargaining agreement; (ii) if an
impasse panel is appointed, then during the period commencing on the date on
which such panel is appointed and ending sixty days thereafter or thirty days
after it submits its report, whichever is sooner, subject to extension under
certain circumstances to permit completion of panel proceedings; or (iii)
during the pendency of an appeal to the Board of Collective Bargaining.
Although State law prohibits strikes by municipal employees, strikes and work
stoppages by employees of the City and the Covered Organizations have occurred.

The City Financial Plan projects that the authorized number of City-funded
employees whose salaries are paid directly from City funds, as opposed to
federal or State funds or water and sewer funds, will increase from an
estimated level of 203,401 on June 30, 1997 to an estimated level of 203,465 by
June 30, 2001, before implementation of the gap closing program outlined in the
City Financial Plan.

Contracts with all of the City's municipal unions expired in the 1995 and
1996 fiscal years. The City has reached settlements with unions representing
approximately 86% of the City's workforce. The City Financial Plan reflects the
costs of the settlements and assumes similar increases for all other
City-funded employees.

The terms of wage settlements could be determined through the impasse
procedure in the New York City Collective Bargaining Law, which can impose a
binding settlement.

The projections for the 1998 through 2001 fiscal years reflect the costs
of the settlements with the United Federation of Teachers ("UFT") and a
coalition of unions headed by District Council 37 of the American Federation of
State, County and Municipal Employees ("District Council 37"), which together
represent approximately two-thirds of the City's workforce, and assume that the
City will reach agreement with its remaining municipal unions under terms which
are generally consistent with such settlements. The settlement provides for a
wage freeze in the first two years, followed by a cumulative effective wage
increase of 11% by the end of the five year period covered by the proposed
agreements, ending in fiscal years 2000 and 2001. Additional benefit increases
would raise the total cumulative effective increase to 13% above present costs.
Costs associated with similar settlements for all City-funded employees would
total $49 million, $459 million and $1.2 billion in the 1997, 1998 and 1999
fiscal years, respectively, and exceed $2 billion in each fiscal year after the
1999 fiscal year. Subsequently, the City reached settlements, through
agreements or statutory impasse procedures, with bargaining units which,
together with the UFT and District Council 37, represent approximately 86% of
the City's workforce. There can be no assurance that the City will reach an
agreement with the unions that have not yet reached a settlement with the City
on the terms contained in the City Financial Plan.

Reports on the City Financial Plan. From time to time, the Control Board
staff, MAC, OSDC, the City Comptroller and others issue reports and make public
statements regarding the City's financial condition,

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commenting on, among other matters, the City's financial plans, projected
revenues and expenditures and actions by the City to eliminate projected
operating deficits. Some of these reports and statements have warned that the
City may have underestimated certain expenditures and overestimated certain
revenues and have suggested that the City may not have adequately provided for
future contingencies. Certain of these reports have analyzed the City's future
economic and social conditions and have questioned whether the City has the
capacity to generate sufficient revenues in the future to meet the costs of its
expenditure increases and to provide necessary services. It is reasonable to
expect that reports and statements will continue to be issued and to engender
public comment.

On September 18, 1997, the City Comptroller issued a report commenting on
developments with respect to the 1998 fiscal year. The report noted that the
City's adopted budget, which is reflected in the City Financial Plan, had
assumed additional State resources of $612 million in the 1998 fiscal year, and
that the approved State budget provided resources of only $216 million for
gap-closing purposes. The report further noted that, while the City will
receive $322 million more in education aid in the 1998 fiscal year than assumed
in the City's adopted budget, it is unlikely that the funding will be entirely
available for gap-closing purposes. In addition, the report noted that the
City's financial statements currently contain approximately $643 million in
uncollected State education aid receivables from prior years as a result of the
failure of the State to appropriate funds to pay these claims, and that the
staff of BOE has indicated that an additional $302 million in prior year claims
is available for accrual. The report stated that the City Comptroller maintains
the position that no further accrual of prior year aid will take place,
including $75 million in aid assumed in the City's adopted budget for the 1998
fiscal year, unless the State makes significant progress to retire the
outstanding prior year receivables. On October 28, 1997, the City Comptroller
issued a subsequent report commenting on recent developments. With respect to
the 1997 fiscal year, the report noted that the City ended the 1997 fiscal year
with an operating surplus of $1.367 billion, before certain expenditures and
discretionary transfers, of which $1.362 billion was used for expenditures due
in the 1998 fiscal year. With respect to tax revenues for the 1998 fiscal year,
the report noted that total tax revenues in the first quarter of the 1998
fiscal year were $244.3 million above projections in the City Financial Plan,
excluding audit collections which were $31.2 million less than projected. The
report stated that the increased tax revenues included $110.3 million of
greater than projected general property tax receipts, which resulted, in part,
from a prepayment discount program, and increased revenues from the personal
income, banking corporation, general corporation and unincorporated business
taxes. The report noted that Wall Street profits exceeded expectations in the
first half of the 1997 calendar year. However, the report noted that the stock
market in the last two weeks of October has declined as a result of currency
turmoil in Southeast Asia. The report noted that, while tax revenues in the
1998 fiscal year should not be significantly affected by the recent stock
market decline, since there is a lag between activity on Wall Street and City
tax revenues, if the current stock market decline persists, tax revenue
forecasts for subsequent years will have to be revised downward. The report
noted that the City was not affected by the October 1987 stock market crash
until the 1990 fiscal year, when revenues from the City's business and real
estate taxes fell by 20% over the 1989 fiscal year. The report also noted that
expenditures for short-term and long-term debt issued during the first half of
the 1998 fiscal year are estimated to be between approximately $53.9 million
and $58.8 million below levels anticipated in the City's adopted budget for the
1998 fiscal year, approximately $20 million below anticipated levels in the
1999 fiscal year and approximately $30 million below anticipated levels in each
of fiscal years 2000 and 2001 due to less borrowing and lower interest rates
than assumed.

On July 16, 1997, the City Comptroller issued a report on the City
Financial Plan. With respect to the 1998 fiscal year, the report identified a
possible $112 million surplus or a possible total net budget gap of up to $440
million, depending primarily on whether the tax reduction program proposed in
the City Financial Plan is implemented and the 14% personal income tax
surcharge is extended beyond December 31, 1997. The risks identified in the
report for the 1998 fiscal year include (i) $178 million related to BOE,
resulting primarily from unidentified expenditure reductions and prior year
State aid receivables; (ii) State aid totaling $115 million which is assumed in
the City Financial Plan but not provided for in the Governor's Executive
Budget; (iii)

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State approval of the extension of the 14% personal income tax surcharge beyond
December 31, 1997, which would generate $169 million in the 1998 fiscal year;
(iv) City proposals for State aid totaling $271 million, including the
acceleration of $142 million of State revenue sharing payments from the 1999
fiscal year to the 1998 fiscal year, which are subject to approval by the
Governor and/or the State Legislature; and (v) the assumed sale of the Coliseum
for $200 million, which may be delayed. The report noted that these risks could
be partially offset by between $597 million and $765 million in potentially
available resources, including $200 million of higher projected tax revenues,
$150 million of possible additional State education aid and the possibility
that the proposed sales tax reduction will not be enacted, which would result
in $157 million of additional tax revenues in the 1998 fiscal year. With
respect to the 1998 fiscal year, the report stated that the City has budgeted
$200 million in the General Reserve and included in the City Financial Plan a
$300 million surplus to be used in the 1999 fiscal year, making the potential
$440 million budget gap manageable. However, the report also expressed concern
as to the sustainability of profits in the securities industry.

With respect to the 1999 and subsequent fiscal years, the report
identified total net budget gaps of between $1.9 billion and $2.8 billion, $2.6
billion and $4.0 billion, and $2.4 billion and $3.8 billion for the 1999
through 2001 fiscal years, respectively, which include the gaps set forth in
the City Financial Plan. The potential risks and potential available resources
identified in the report for the 1999 through 2001 fiscal years include most of
the risks and resources identified for the 1998 fiscal year, except that the
additional risks for the 1999 through 2001 fiscal years include (i) assumed
payments from the Port Authority relating to the City's claim for back rentals
and an increase in future rentals, part of which are the subject of
arbitration, totaling $350 million, $140 million and $135 million in the
1999-2001 fiscal years, respectively; and (ii) State approval of the extension
of the 12.5% personal income tax surcharge beyond December 31, 1998, which
would generate $190 million, $527 million and $554 million in the 1999 through
2001 fiscal years, respectively.

On July 15, 1997, the staff of the Control Board issued a report
commenting on the City Financial Plan. The report stated that, while the City
should end the 1998 fiscal year with its budget in balance, the City Financial
Plan still contains large gaps beginning in the 1999 fiscal year, reflecting
revenues which are not projected to grow during the Financial Plan Period and
expenditures which are projected to grow at about the rate of inflation. The
report identified net risks totaling $485 million, $930 million, $1.2 billion
and $1.4 billion for 1998 through 2001 fiscal years, respectively, in addition
to the gaps projected in the City Financial Plan for fiscal years 1999 through
2001. The principal risks identified in the report included (i) potential tax
revenues shortfalls totaling $150 million, $300 million and $400 million for
the 1999 through 2001 fiscal years, respectively, based on historical average
trends; (ii) BOE's structural gap, uncertain State funding of BOE and
implementation by BOE of various unspecified actions, totaling $163 million,
$209 million, $218 million and $218 million in the 1998 through 2001 fiscal
years, respectively; (iii) the proposed sale of certain assets in the 1998
fiscal year totaling $248 million, which could be delayed; (iv) assumed
additional State actions totaling $271 million, $121 million, $125 million and
$129 million in the 1998 through 2001 fiscal years, respectively; (v) revenues
from the extension of the 12.5% personal income tax surcharge beyond December
31, 1998, totaling $188 million, $527 million and $554 million in the 1999
through 2001 fiscal years, respectively, which requires State legislation; and
(vi) the receipt of $350 million, $140 million and $135 million from the Port
Authority in the 1999 through 2001 fiscal years, respectively, which is the
subject of arbitration. Taking into account the risks identified in the report
and the gaps projected in the City Financial Plan, the report projected a gap
of $485 million for the 1998 fiscal year, which could be offset by available
reserves, and gaps $2.7 billion, $4.1 billion and $4.0 billion for the 1999
through 2001 fiscal years, respectively. The report also noted that (i) if the
securities industry or economy slows down to a greater extent than projected,
the City could face sudden and unpredictable changes to its forecast; (ii) the
City's entitlement reduction assumptions require a decline of historic
proportions in the number of eligible welfare recipients; (iii) the City has
not yet shown how the City's projected debt service, which would consume 20% of
tax revenues by the 1999 fiscal year, can be accommodated on a recurring basis;
(iv) the City is deferring recommended capital maintenance; and (v) continuing
growth in enrollment at BOE has helped create projected gaps of over $100
million annually at BOE. However, the report noted that if proposed tax
reductions

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are not approved, additional revenue will be realized, ranging from $272
million in the 1998 fiscal year to $481 million in the 2001 fiscal year.

On July 2, 1997, the staff of the OSDC issued a report on the City
Financial Plan. The report projected a potential surplus for the 1998 fiscal
year of $190 million, due primarily to the potential for greater than forecast
tax revenues, and projected budget gaps for the 1999 through 2001 fiscal years
which are slightly less than the gaps set forth in the City Financial Plan for
such years. The report also identified risks of $518 million, $1.1 billion,
$1.3 billion and $1.4 billion for the 1998 through 2001 fiscal years,
respectively. The additional risks identified in the report relate to: (i) the
receipt of Port Authority lease payments totaling $350 million, $140 million
and $135 million in the 1999 through 2001 fiscal years, respectively; (ii) City
proposals for State aid totaling $271 million, $121 million, $125 million and
$129 million in the 1998 through 2001 fiscal years, respectively, including the
acceleration of $142 million of State revenue sharing payments from the 1999
fiscal year to the 1998 fiscal year, which are subject to approval by the
Governor and/or the State Legislature; (iii) the receipt of $200 million in the
1998 fiscal year in connection with the proposed sale of the New York Coliseum;
(iv) the receipt of $47 million in the 1998 fiscal year from the sale of
certain other assets; (v) uncertain State education aid and expenditure
reductions relating to BOE totaling $325 million in each of the 1999 through
2001 fiscal years; (vi) State approval of a three-year extension to the City's
12.5% personal income tax surcharge, which is scheduled to expire on December
31, 1998 and which would generate revenues of $230 million, $525 million and
$550 million in the 1999 through 2001 fiscal years, respectively; and (vii) the
potential for additional funding needs for the City's labor reserve totaling
$104 million, $225 million and $231 million in the 1999 through 2001 fiscal
years, respectively, to pay for collective bargaining increases for the Covered
Organizations, which the City Financial Plan assumes will be paid for by the
Covered Organizations, rather than the City. The report also noted that the
City Financial Plan assumes that the State will extend the 14% personal income
tax that is scheduled to expire in December 1997, which would generate revenues
of $200 million in the 1998 fiscal year and $500 million annually in subsequent
fiscal years, and that the City Financial Plan makes no provision for wage
increases after the expiration of current contracts in fiscal year 2000, which
would add $430 million to the 2001 fiscal year budget gap if employees receive
wage increases at the projected rate of inflation. The report noted that the
City Financial Plan includes an annual General Reserve of $200 million and sets
aside an additional $300 million in the 1998 fiscal year to reduce the budget
gap for the 1999 fiscal year if such funds are not needed in the 1998 fiscal
year. With respect to the gap-closing program for the 1999 through 2001 fiscal
years, the report noted that the City has broadly outlined a program that
relies heavily on unspecified agency actions, savings from reinvention and
other unspecified initiatives and uncertain State aid and entitlement program
reductions which depend on the cooperation of others.

The report concluded that while 1997 was an unexpectedly good fiscal year
for City revenues, the City projects that the rate of spending for the 1998
fiscal year will grow substantially faster than the rate of revenues,
reflecting increasing costs for labor, debt service, Medicaid and education,
and that the gaps for the subsequent fiscal years continue to present a
daunting challenge. With respect to the economy, the report noted that the
major risks to the City's economic and revenue forecasts continue to relate to
the pace of both the national economy and activity on Wall Street, that the
potential exists for a national recession over the next four years, and that
Wall Street volatility can have a negative effect, as was apparent in 1994 when
the Federal Reserve repeatedly raised interest rates and the profits of
securities firms fell. Other concerns identified in the report include: (i) $76
million in retroactive claims for State education aid included in the City
Financial Plan for the 1998 fiscal year which may not be realized; (ii) a
potential risk of $698 million in State education aid owed to the City by the
State for prior years, all or a portion of which the City could be forced to
write-off if further delays occur in the State agreeing to fund these claims;
and (iii) the potential adverse impact on HHC over the long-term of the planned
expansion of managed care which emphasizes out-patient services with fixed
monthly fees, uncertainty covering projected savings from a proposal that most
Medicaid recipients be required to enroll in managed care, which is subject to
approval by the Federal Government, and the possibility that the recent Federal
budget agreement could substantially reduce aid to hospitals which serve a
large number of medically indigent patients.

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On May 27, 1997, the IBO released a report analyzing the financial plan
published on May 8, 1997 (the "May Financial Plan"). In its report, the IBO
estimated gaps of $27 million, $91 million, $2.1 billion, $2.9 billion and $2.9
billion for the 1997 through 2001 fiscal years, respectively, which include the
gaps set forth in the May Financial Plan for fiscal years 1999 through 2001.
The gaps estimated in the IBO report reflect (i) uncertainty concerning the
size and timing of projected airport rents of $270 million and $215 million in
the 1998 and 1999 fiscal years, respectively, which are the subject of an
ongoing dispute between the Port Authority and the City; and (ii) additional
funding needs for the City's labor reserve totaling $104 million, $224 million
and $231 million in the 1999 through 2001 fiscal years, respectively, to pay
for collective bargaining increases for the Covered Organizations, which the
May Financial Plan assumes will be paid for by the Covered Organizations,
rather than the City. These reduced revenues and increased expenditures
identified in the IBO report are substantially offset by tax revenue forecasts
which exceed those in the May Financial Plan. However, the report noted that
the May Financial Plan assumes continued strong revenue growth and that, in the
event of an economic downturn, the City will be required to increase taxes in a
slow economy or reduce spending when it is most needed. With respect to the tax
reductions proposed in the May Financial Plan, the IBO stated that the
principal question is whether the City will be able to afford the tax
reductions. In addition, the report discussed various issues with implications
for the City's 1998 budget. These issues include the reliance in the budget on
a number of State legislative actions, including (i) $294 million from
legislation the City has requested to increase State aid; (ii) $128 million in
savings attributable to both a larger City share of Federal welfare grant funds
and State reforms to Medicaid; and (iii) $115 million to restore expenditure
reductions proposed in the Governor's Executive Budget. The report also noted
that the City's claim for $900 million of State reimbursement of prior year
education expenditures remains unresolved, that proposals affecting the MTA,
including proposals to eliminate two-fare zones for bus and subway riders, will
result in a significant reduction in revenues for the MTA, and that the
implementation of changes in the City's computer system, resulting from the
inability of the current computer system to recognize the year 2000, could cost
the City up to $150 million to $200 million over the next three years. In a
subsequent report released on June 16, 1997, the IBO noted that in the City
Financial Plan the City had deferred to fiscal years 1999 through 2001 the
assumed receipt of back airport rents, and that the tax revenue forecasts for
the 1998 fiscal year in the City Financial Plan are closer than the forecasts
in the May Financial Plan to the IBO's forecast of City tax revenues in its May
report.

On August 25, 1997, the IBO issued a report relating to recent
developments regarding welfare reform. The report noted that Federal
legislation adopted in August 1997, modified certain aspects of the 1996
Welfare Act, by reducing SSI eligibility restrictions for certain legal aliens
residing in the country as of August 22, 1996, resulting in the continuation of
Federal benefits, by providing funding to the states to move welfare recipients
from public assistance and into jobs and by providing continued Medicaid
Coverage for those children who lose SSI due to stricter eligibility criteria.
In addition, the report noted that the State had enacted the Welfare Reform Act
of 1997 which, among other things, requires the City to achieve work quotas and
other work requirements and requires all able-bodied recipients to work after
receiving assistance for two years. The report noted that this provision could
require the City to spend substantial funds over the next several years for
workfare and day care in addition to the funding reflected in the City
Financial Plan. The report also noted that the State Welfare Reform Act of 1997
established a Food Assistance Program designed to replace Federal food stamp
benefits for certain classes of legal aliens denied eligibility for such
benefits by the 1996 Welfare Act. The report noted that if the City elects to
participate in the Food Assistance Program, it will be responsible for 50% of
the costs for the elderly and disabled. The IBO has stated that it will release
an updated report to provide a detailed analysis of these developments and
their likely impact on the City.

On October 31, 1996, the IBO released a report assessing the costs that
could be incurred by the City in response to the 1996 Welfare Act, which, among
other things, replaces the AFDC entitlement program with TANF, imposes a
five-year time limit on TANF assistance, requires 50% of states' TANF caseload
to be employed by 2002, and restricts assistance to legal aliens. The report
noted that if the requirement that all recipients work after two years of
receiving benefits is enforced, these additional costs could be substantial

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starting in 1999, reflecting costs for worker training and supervision of new
workers and increased child care costs. The report further noted that, if
economic performance weakened, resulting in an increased number of public
assistance cases, potential costs to the City could substantially increase.
States are required to develop plans during 1997 to implement the new law. The
report noted that decisions to be made by the State which will have a
significant impact on the City budget include the allocation of block grant
funds between the State and New York local governments such as the City and the
division between the State and its local governments of welfare costs not
funded by the Federal government.

Finally, the report noted that the new welfare law's most significant
fiscal impact is likely to occur in the years 2002 and beyond, reflecting the
full impact of the lifetime limit on welfare participation which only begins to
be felt in 2002 when the first recipients reach the five-year limit and are
assumed to be covered by Home Relief. In addition, the report noted that, given
the constitutional requirement to care for the needy, the 1996 Welfare Act
might well prompt a migration of benefit-seekers into the City, thereby
increasing City welfare expenditures in the long run. The report concluded that
the impact of the 1996 Welfare Act on the City will ultimately depend on the
decisions of State and City officials, the performance of the local economy and
the behavior of thousands of individuals in response to the new system.

Seasonal Financing. The City since 1981 has fully satisfied its seasonal
financing needs in the public credit markets, repaying all short-term
obligations within their fiscal year of issuance. Although the City's current
financial plan projects $2.4 billion of seasonal financing for the 1998 fiscal
year, the City expects to undertake only approximately $1.4 billion of seasonal
financing. The City has issued $1.075 billion of short-term obligations on
October 15, 1997 and expects to issue additional short-term obligations to
finance the City's projected cash flow needs for the 1998 fiscal year. The City
issued $2.4 billion of short-term obligations in fiscal year 1997. Seasonal
financing requirements for the 1996 fiscal year increased to $2.4 billion from
$2.2 billion and $1.75 billion in the 1995 and 1994 fiscal years, respectively.
Seasonal financing requirements were $1.4 billion in the 1993 fiscal year. The
delay in the adoption of the State's budget in certain past fiscal years has
required the City to issue short-term notes in amounts exceeding those expected
early in such fiscal years.

Litigation. The City is a defendant in a significant number of lawsuits.
Such litigation includes, but is not limited to, actions commenced and claims
asserted against the City arising out of alleged constitutional violations,
alleged torts, alleged breaches of contracts and other violations of law and
condemnation proceedings. While the ultimate outcome and fiscal impact, if any,
on the proceedings and claims are not currently predictable, adverse
determinations in certain of them might have a material adverse effect upon the
City's ability to carry out the City Financial Plan. The City is a party to
numerous lawsuits and is the subject of numerous claims and investigations. The
City has estimated that its potential future liability on account of
outstanding claims against it as of June 30, 1997 amounted to approximately
$3.5 billion. This estimate was made by categorizing the various claims and
applying a statistical model, based primarily on actual settlements by type of
claim during the preceding ten fiscal years, and by supplementing the estimated
liability with information supplied by the City's Corporation Counsel.

On October 9, 1995, Standard & Poor's issued a report which concluded that
proposals to replace the graduated Federal income tax system with a "flat" tax
could be detrimental to the creditworthiness of certain municipal bonds. The
report noted that the elimination of Federal income tax deductions currently
available, including residential mortgage interest, property taxes and state
and local income taxes, could have a severe impact on funding methods under
which municipalities operate. With respect to property taxes, the report noted
that the total valuation of a municipality's tax base is affected by the
affordability of real estate and that elimination of mortgage interest
deduction would result in a significant reduction in affordability and, thus,
in the demand for, and the valuation of, real estate. The report noted that
rapid losses in property valuations would be felt by many municipalities,
hurting their revenue raising abilities. In addition, the report noted that the
loss of the current deduction for real property and state and local income
taxes from Federal income tax

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liability would make rate increases more difficult and increase pressures to
lower existing rates, and that the cost of borrowing for municipalities could
increase if the tax-exempt status of municipal bond interest is worth less to
investors. Finally, the report noted that tax anticipation notes issued in
anticipation of property taxes could be hurt by the imposition of a flat tax,
if uncertainty is introduced with regard to their repayment revenues, until
property values fully reflect the loss of mortgage and property tax deductions.

Ratings Agencies. On July 10, 1995, S&P revised downward its rating on
City general obligation bonds from A-to BBB+ and removed City bonds from
CreditWatch. S&P stated that "structural budgetary balance remains elusive
because of persistent softness in the City's economy, highlighted by weak job
growth and a growing dependence on the historically volatile financial services
sector." Other factors identified by S&P's in lowering its rating on City bonds
included a trend of using one-time measures, including debt refinancings, to
close projected budget gaps, dependence on unratified labor savings to help
balance the City Financial Plan, optimistic projections of additional federal
and State aid or mandate relief, a history of cash flow difficulties caused by
State budget delays and continued high debt levels. In 1975, S&P suspended its
A rating of City bonds. This suspension remained in effect until March 1981, at
which time the City received an investment grade rating of BBB from S&P. On
July 2, 1985, S&P revised its rating of City bonds upward to BBB+ and on
November 19, 1987, to A-. On July 10, 1995, S&P revised its rating of City
bonds downward to BBB+, as discussed above. On November 25, 1996, S&P issued a
report which stated that, if the City reached its debt limit without the
ability to issue bonds through other means, it would cause a deterioration in
the City's infrastructure and significant cutbacks in the capital plan which
would eventually impact the City's economy and revenues, and could have
eventual negative credit implications.

Moody's rating for City general obligation bonds is Baa1. On July 17,
1997, Moody's changed its outlook on City bonds to positive from stable. On
March 1, 1996, Moody's stated that the rating for the City's Baa1 general
obligation bonds remains under review for a possible downgrade pending the
outcome of the adoption of the City's budget for the 1997 fiscal year and in
light of the status of the debate on public assistance and Medicaid reform; the
enactment of a State budget, upon which major assumptions regarding State aid
are dependent, which may be extensively delayed; and the seasoning of the
City's economy with regard to its strength and direction in the face of a
potential national economic slowdown. Moody's ratings of City bonds were
revised in November 1981 from B (in effect since 1977) to Ba1, in November 1983
to Baa, in December 1985 to Baa1, in May 1988 to A and again in February 1991
to Baa1.

Fitch Investors Service, Inc. ("Fitch") rates City general obligation
bonds A- since July 15, 1993. On February 28, 1996, Fitch placed the City's
general obligation bonds on FitchAlert with negative implications. On November
5, 1996, Fitch removed the City's general obligation bonds from FitchAlert
although Fitch stated that the outlook remains negative. Since then Fitch has
revised the outlook to stable. There is no assurance that such ratings will
continue for any given period of time or that they will not be revised downward
or withdrawn entirely. Any such downward revision or withdrawal could have an
adverse effect on the market prices of the City's general obligation bonds.

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APPENDIX D

SPECIAL INVESTMENT CONSIDERATIONS
RELATING TO CALIFORNIA MUNICIPAL OBLIGATIONS

Overview

The financial condition of the State of California ("California"), its
public authorities and local governments could affect the market values and
marketability of, and therefore the net asset value per share and the interest
income of, the Vista California Tax Free Money Market Fund or the Vista
California Intermediate Tax Free Income Fund, or result in the default of
existing obligations, including obligations which may be held by the Vista
California Tax Free Money Market Fund or the Vista California Intermediate Tax
Free Income Fund. The following section provides only a brief summary of the
complex factors affecting the financial condition of California, and is based
on information obtained from California, as publicly available prior to the
date of this Statement of Additional Information. The information contained in
such publicly available documents has not been independently verified. It
should be noted that the creditworthiness of obligations issued by local
issuers may be unrelated to the creditworthiness of California, and that there
is no obligation on the part of California to make payment on such local
obligations in the event of default in the absence of a specific guarantee or
pledge provided by California.

During the early 1990's, California experienced significant financial
difficulties, which reduced its credit standing, but the State's finances have
improved since 1994. The ratings of certain related debt of other issuers for
which California has an outstanding lease purchase, guarantee or other
contractual obligation (such as for state-insured hospital bonds) are generally
linked directly to California's rating. Should the financial condition of
California deteriorate again, its credit ratings could be further reduced, and
the market value and marketability of all outstanding notes and bonds issued by
California, its public authorities or local governments could be adversely
affected.

Economic Factors. California's economy is the largest among the 50 states
and one of the largest in the world. The State's population of more than 32
million represents over 12% of the total United States population and grew by
26% in the 1980s, more than double the national rate. Population growth slowed
to less than 1% annually in 1994 and 1995, but rose to 1.9% in 1996. During the
early 1990's, net population growth in the State was due to births and foreign
immigration.

Total personal income in the State, at an estimated $810 billion in 1996,
accounts for almost 13% of all personal income in the nation. Total employment
is over 14 million, the majority of which is in the service, trade and
manufacturing sectors.

From mid-1990 to late 1993, the State suffered a recession with the worst
economic, fiscal and budget conditions since the 1930s. Construction,
manufacturing (especially aerospace), and financial services, among others,
were all severely affected, particularly in Southern California. Job losses
were the worst of any post-war recession. Employment levels stabilized by late
1993 and steady job growth has occurred since early 1994. Pre-recession job
levels were reached in 1996. Unemployment, while remaining higher than the
national average, has come down from its 10% recession peak to 6.5% in spring,
1997. Economic indicators show a steady and strong recovery underway in
California since the start of 1994 particularly in export-related industries,
services, electronics, entertainment and tourism. The residential housing
sector grew much more slowly than in prior recoveries, but by late 1997 had
reached prerecession levels of new housing starts. Recent developments in Asian
economies may impact exports, but it is not yet clear whether how these
developments will affect the State's economy overall. Any delay or reversal of
the recovery may create new shortfalls in State revenues.

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Constitutional Limitations on Taxes, Other Charges and Appropriations

Limitation on Property Taxes. Certain California Municipal Obligations may
be obligations of issuers which rely in whole or in part, directly or
indirectly, on ad valorem property taxes as a source of revenue. The taxing
powers of California local governments and districts are limited by Article
XIIIA of the California Constitution, enacted by the voters in 1978 and
commonly known as "Proposition 13." Briefly, Article XIIIA limits to 1% of full
cash value of the rate of ad valorem property taxes on real property and
generally restricts the reassessment of property to 2% per year, except under
new construction or change of ownership (subject to a number of exemptions).
Taxing entities may, however, raise ad valorem taxes above the 1% limit to pay
debt service on voter-approved bonded indebtedness.

Under Article XIIIA, the basic 1% ad valorem tax levy is applied against
the assessed value of property as of the owner's date of acquisition (or as of
March 1, 1975, if acquired earlier), subject to certain adjustments. This
system has resulted in widely varying amounts of tax on similarly situated
properties. Several lawsuits have been filed challenging the acquisition-based
assessment system of Proposition 13, but it was upheld by the U.S. Supreme
Court in 1992.

Article XIIIA prohibits local governments from raising revenues through ad
valorem taxes above the 1% limit; it also requires voters of any governmental
unit to give two-thirds approval to levy any "special tax." Court decisions,
however, allowed a non-voter approved levy of "general taxes" which were not
dedicated to a specific use.

Limitations on Other Taxes, Fees and Charges. On November 5, 1996, the
voters of the State approved Proposition 218, called the "Right to Vote on
Taxes Act." Proposition 218 added Articles XIIIC and XIIID to the State
Constitution, which contain a number of provisions affecting the ability of
local agencies to levy and collect both existing and future taxes, assessments,
fees and charges.

Article XIIIC requires that all new or increased local taxes be submitted
to the electorate before they become effective. Taxes for general governmental
purposes require a majority vote and taxes for specific purposes require a
two-thirds vote. Further, any general purpose tax which was imposed, extended
or increased without voter approval after December 31, 1994 must be approved by
a majority vote within two years.

Article XIIID contains several new provisions making it generally more
difficult for local agencies to levy and maintain "assessments" for municipal
services and programs. Article XIIID also contains several new provisions
affecting "fees" and "charges", defined for purposes of Article XIIID to mean
"any levy other than an ad valorem tax, a special tax, or an assessment,
imposed by a [local government] upon a parcel or upon a person as an incident
of property ownership, including a user fee or charge for a property related
service." All new and existing property related fees and charges must conform
to requirements prohibiting, among other things, fees and charges which
generate revenues exceeding the funds required to provide the property related
service or are used for unrelated purposes. There are new notice, hearing and
protest procedures for levying or increasing property related fees and charges,
and, except for fees or charges for sewer, water and refuse collection services
(or fees for electrical and gas service, which are not treated as "property
related" for purposes of Article XIIID), no property related fee or charge may
be imposed or increased without majority approval by the property owners
subject to the fee or charge or, at the option of the local agency, two-thirds
voter approval by the electorate residing in the affected area.

In addition to the provisions described above, Article XIIIC removes
limitations on the initiative power in matters of local taxes, assessments,
fees and charges. Consequently, local voters could, by future initiative,
repeal, reduce or prohibit the future imposition or increase of any local tax,
assessment, fee or charge. It is unclear how this right of local initiative may
be used in cases where taxes or charges have been or will be specifically
pledged to secure debt issues.

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The interpretation and application of Proposition 218 will ultimately be
determined by the courts with respect to a number of matters, and it is not
possible at this time to predict with certainly the outcome of such
determinations. Proposition 218 is generally viewed as restricting the fiscal
flexibility of local governments, and for this reason, some ratings of
California cities and counties have been, and others may be, reduced.

Appropriations Limits. The State and its local governments are subject to
an annual "appropriations limit" imposed by Article XIIIB of the California
Constitution, enacted by the voters in 1979 and significantly amended by
Propositions 98 and 111 in 1988 and 1990, respectively. Article XIIIB prohibits
the State or any covered local government from spending "appropriations subject
to limitation" in excess of the appropriations limit imposed. "Appropriations
subject to limitation" are authorizations to spend "proceeds of taxes," which
consist of tax revenues and certain other funds, including proceeds from
regulatory licenses, user charges or other fees, to the extent that such
proceeds exceed the cost of providing the product or service, but "proceeds of
taxes" exclude most State subventions to local governments. No limit is imposed
on appropriations of funds which are not "proceeds of taxes," such as
reasonable user charges or fees, and certain other non-tax funds, including
bond proceeds.

Among the expenditures not included in the Article XIIIB appropriations
limit are (1) the debt service cost of bonds issued or authorized prior to
January 1, 1979, or subsequently authorized by the voters, (2) appropriations
arising from certain emergencies declared by the Governor, (3) appropriations
for certain capital outlay projects, (4) appropriations by the State of
post-1989 increases in gasoline taxes and vehicle weight fees, and (5)
appropriations made in certain cases of emergency.

The appropriations limit for each year is adjusted annually to reflect
changes in cost of living and population, and any transfers of service
responsibilities between government units. The definitions for such adjustments
were liberalized in 1990 to follow more closely growth in the State's economy.

"Excess" revenues are measured over a two year cycle. Local governments
must return any excess to taxpayers by rate reductions. The State must refund
50% of any excess, with the other 50% paid to schools and community colleges.
With more liberal annual adjustment factors since 1988, and depressed revenues
since 1990 because of the recession, few governments are currently operating
near their spending limits, but this condition may change over time. Local
governments may by voter approval exceed their spending limits for up to four
years. During fiscal year 1986-87, State receipts from proceeds of taxes
exceeded its appropriations limit by $1.1 billion, which was returned to
taxpayers. Since that year, appropriations subject to limitation have been
under the State limit. State appropriations were $6.7 billion under the limit
for fiscal year 1996-97.

Because of the complex nature of Articles XIIIA, XIIIB, XIIIC and XIIID of
the California Constitution, the ambiguities and possible inconsistencies in
their terms, and the impossibility of predicting future appropriations or
changes in population and cost of living, and the probability of continuing
legal challenges, it is not currently possible to determine fully the impact of
these Articles on California Municipal Obligations or on the ability of the
State or local governments to pay debt service on such California Municipal
Obligations. It is not possible, at the present time, to predict the outcome of
any pending litigation with respect to the ultimate scope, impact or
constitutionality of these Articles or the impact of any such determinations
upon State agencies or local governments, or upon their ability to pay debt
service on their obligations. Further initiatives or legislative changes in
laws or the California Constitution may also affect the ability of the State or
local issuers to repay their obligations.

Obligations of the State of California

Under the California Constitution, debt service on outstanding general
obligation bonds is the second charge to the General Fund after support of the
public school system and public institutions of higher education. As of
November 1, 1997, the State had outstanding approximately $18.2 billion of
long-term general

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obligation bonds, plus $618 million of general obligation commercial paper
which will be refunded by long-term bonds in the future, and $6.1 billion of
lease-purchase debt supported by the State General Fund. The State also had
about $8.7 billion of authorized and unissued long-term general obligation
bonds and lease-purchase debt. In FY 1996-97, debt service on general
obligation bonds and lease purchase debt was approximately 5.0% of General Fund
revenues.

Recent Financial Results. The principal sources of General Fund revenues
in 1995-1996 were the California personal income tax (45% of total revenues),
the sales tax (34%), bank and corporation taxes (13%), and the gross premium
tax on insurance (2%). The State maintains a Special Fund for Economic
Uncertainties (the "SFEU"), derived from General Fund revenues, as a reserve to
meet cash needs of the General Fund, but which is required to be replenished as
soon as sufficient revenues are available. Year-end balances in the SFEU are
included for financial reporting purposes in the General Fund balance. Because
of the recession and an accumulated budget deficit, no reserve was budgeted in
the SFEU from 1992-93 to 1995-96.

General. Throughout the 1980's, State spending increased rapidly as the
State population and economy also grew rapidly, including increased spending
for many assistance programs to local governments, which were constrained by
Proposition 13 and other laws. The largest State program is assistance to local
public school districts. In 1988, an initiative (Proposition 98) was enacted
which (subject to suspension by a two-thirds vote of the Legislature and the
Governor) guarantees local school districts and community college districts a
minimum share of State General Fund revenues (currently about 35%).

Starting in mid-1990, the State has faced adverse economic, fiscal, and
budget conditions. The 1990-1994 economic recession seriously affected State
tax revenues. It also caused increased expenditures for health and welfare
programs. The State is also facing a structural imbalance in its budget with
the largest programs supported by the General Fund (education, health, welfare
and corrections) growing at rates significantly higher than the growth rates
for the principal revenue sources of the General Fund. These structural
concerns will be exacerbated in coming years by the expected need to
substantially increase capital and operating funds for corrections as a result
of a "Three Strikes" law enacted in 1994.

Recent Budgets. As a result of the recession and these factors, among
others, the State experienced substantial revenue shortfalls, and greater than
anticipated social service costs, in the early 1990's. The State accumulated
and sustained a budget deficit in the budget reserve, the SFEU, approaching
$2.8 billion at its peak at June 30, 1993. The Legislature and Governor agreed
on a number of different steps to respond to the adverse financial conditions
and produce Budget Acts in the Years 1991-92 to 1994-95 (although not all of
these actions were taken in each year):

[bullet] significant cuts in health and welfare program expenditures;

[bullet] transfers of program responsibilities and some funding sources from
the State to local governments, coupled with some reduction in
mandates on local government;

[bullet] transfer of about $3.6 billion in annual local property tax
revenues from cities, counties, redevelopment agencies and some
other districts to local school districts, thereby reducing State
funding for schools;

[bullet] reduction in growth of support for higher education programs,
coupled with increases in student fees;

[bullet] revenue increases (particularly in the 1992-93 Fiscal Year budget),
most of which were for a short duration;

[bullet] increased reliance on aid from the federal government to offset the
costs of incarcerating, educating and providing health and welfare
services to undocumented aliens (although these efforts have
produced much less federal aid than the State Administration had
requested); and

D-4
<PAGE>

[bullet] various one-time adjustment and accounting changes (some of which
have been challenged in court).

The combination of stringent budget actions cutting State expenditures,
and the turnaround of the economy by late 1993, finally led to the restoration
of positive financial results, with revenues equaling or exceeding expenditures
starting in FY 1992-93. As a result, the accumulated budget deficit of about
$2.8 billion was eliminated by June 30, 1997, when the State showed a positive
balance of about $408 million, on a budgetary basis, in the SFEU.

A consequence of the accumulated budget deficits in the early 1990's,
together with other factors such as disbursement of funds to local school
districts "borrowed" from future fiscal years and hence not shown in the annual
budget, was to significantly reduce the State's cash resources available to pay
its ongoing obligations. The State's cash condition became so serious that from
late spring 1992 until 1995, the State had to rely on issuance of short term
notes which matured in a subsequent fiscal year to finance its ongoing deficit,
and pay current obligations. For a two-month period in the summer of 1992,
pending adoption of the annual Budget Act, the State was forced to issue
registered warrants (IOUs) to some of its suppliers, employees and other
creditors. The last of these deficit notes was repaid in April, 1996.

The 1995-96 and 1996-97 Budget Acts reflected significantly improved
financial conditions, as the State's economy recovered and tax revenues soared
above projections. Over the two years, revenues averaged about $2 billion
higher than initially estimated. Most of the additional revenues were allocated
to school funding, as required by Proposition 98, and to make up shortfalls in
federal aid for health and welfare costs and costs of illegal aliens. The
budgets for both these years showed strong increases in funding for K-14 public
education, including implementation of initiatives to reduce class sizes for
lower elementary grades to not more than 20 pupils. Higher education funding
also increased. Spending for health and welfare programs was kept in check, as
previously-implemented cuts in benefit levels were retained.

The final results for FY 1996-97 showed General Fund revenues of $49.2
billion and expenditures of $48.9 billion. The improved revenues allowed the
repayment of the last of the recession-induced budget deficits; the SFEU had a
balance of $408 million on a budgetary basis ($281 million on a cash basis) as
of June 30, 1997, the first significant positive balance in the decade. In
1996-97, the State implemented its regular cash flow borrowing program with the
issuance of $3.0 billion of Revenue Anticipation Notes which matured on June
30, 1997, and did not require any external borrowing over the end of the fiscal
year.

Fiscal Year 1997-98 Budget. With continued strong economic recovery and
surging tax receipts, the State entered the 1997-98 Fiscal Year in the
strongest financial position in the decade. However, in May 1997, the
California Supreme Court ruled that the State had acted illegally in 1993 and
1994 by using a deferral of payments to the Public Employees Retirement Fund to
help balance earlier budgets. In response to this court decision, the Governor
ordered an immediate repayment to the Retirement Fund of about $1.235 billion,
which was made in late July, 1997, and substantially "used up" the expected
additional revenues for the fiscal year.

On August 18, 1997, the Governor signed the 1997-98 Budget Act. The Budget
Act assumes General Fund revenues and transfers of $52.5 billion, and contains
expenditures of $52.8 billion. As a result, the budget reserve (SFEU) is
reduced to an estimated $112 million at June 30, 1998. The Budget Act also
contains $14.4 billion of Special Fund expenditures. Following enactment of the
Budget Act, the State plans to carry out its normal annual cash flow borrowing,
totaling $3.0 billion to mature June 30, 1998.

The 1997-98 Budget Act provides another year of rapidly increasing funding
for K-14 public education. Total General Fund support will reach $5,150 per
pupil, more than 20% higher than the recession-period levels which were in
effect as late as FY 1993-94. The $1.75 billion in new funding will be spent on
class size reduction and other initiatives, as well as fully funding growth and
cost of living increases. Support

D-5
<PAGE>

for higher education units in the State also increased by about 6 percent.
Because of the pension payment, most other State programs were funded at levels
consistent with prior years, and several initiatives had to be dropped. These
included additional assistance to local governments, state employee raises, and
funding of a bond bank.

Part of the 1997-98 Budget Act was completion of State welfare reform
legislation to implement the new federal law passed in 1996. The new State
program, called "CalWORKs," to become effective January 1, 1998, will emphasize
programs to bring aid recipients into the workforce. As required by federal
law, new time limits will be placed on receipt of welfare aid. Grant levels for
1997-98 remain at the reduced, prior years' levels.

Although, as noted, the 1997-98 Budget Act projects a budget reserve in
the SFEU of $112 million on June 30, 1998, the General Fund fund balance on
that date also reflects $1.25 billion of "loans" which the General Fund made to
local schools in the recession years, representing cash outlays above the
mandatory minimum funding level. Settlement of litigation over these
transactions in July 1996 calls for repayment of these loans over the period
ending in 2001-02, about equally split between outlays from the General Fund
and from schools' entitlements. The 1997-98 Budget Act contained a $200 million
appropriation from the General Fund toward this settlement

Department of Finance reports in December, 1997 indicated that General
Fund revenues for the first five months of the fiscal year were about 2.2%
below projections, with most of the shortfall attributable to a 20% shortfall
in bank and corporation tax receipts. Receipts from personal income taxes
(principally from withholding) and sales taxes, which together are the
strongest indicators of the economy's condition, were essentially on target. A
more detailed projection of FY 1997-98 and FY 1998-99 revenues and expenditures
will be released by the Governor in early January as part of his 1998-99 Budget
Proposal.

Although the State's strong economy is producing record revenues to the
State government, the State's budget continues to be under stress from mandated
spending on education, a rising prison population, and social needs of a
growing population with many immigrants. These factors which limit State
spending growth also put pressure on local governments. There can be no
assurances that, if economic conditions weaken, or other factors intercede, the
State will not experience budget gaps in the future.

Bond Rating. The ratings on California's long-term general obligation
bonds were reduced in the early 1990's from "AAA" levels which had existed
prior to the recession. In 1996, Fitch and Standard & Poor's raised their
ratings of California's general obligation bonds, which as of November 1997
were assigned ratings of "A+" from Standard & Poor's, "A1" from Moody's and
"AA-" from Fitch.

There can be no assurance that such ratings will be maintained in the
future. It should be noted that the creditworthiness of obligations issued by
local California issuers may be unrelated to creditworthiness of obligations
issued by the State of California, and that there is no obligation on the part
of the State to make payment on such local obligations in the event of default.

Legal Proceedings. The State is involved in certain legal proceedings
(described in the State's recent financial statements) that, if decided against
the State, may require the State to make significant future expenditures or may
substantially impair revenues. Trial courts have recently entered tentative
decisions or injunctions which would overturn several parts of the State's
recent budget compromises. The matters covered by these lawsuits include
reductions in welfare payments and the use of certain cigarette tax funds for
health costs. All of these cases are subject to further proceedings and
appeals, and if California eventually loses, the final remedies may not have to
be implemented in one year.

Obligations of Other Issuers

Other Issuers of California Municipal Obligations. There are a number of
State agencies, instrumentalities and political subdivisions of the State that
issue Municipal Obligations, some of which may be conduit revenue obligations
payable from payments from private borrowers. These entities are subject to

D-6
<PAGE>

various economic risks and uncertainties, and the credit quality of the
securities issued by them may vary considerably from the credit quality of
obligations backed by the full faith and credit of the State.

State Assistance. Property tax revenues received by local governments
declined more than 50% following passage of Proposition 13. Subsequently, the
California Legislature enacted measures to provide for the redistribution of
the State's General Fund surplus to local agencies, the reallocation of certain
State rev enues to local agencies and the assumption of certain governmental
functions by the State to assist municipal issuers to raise revenues. Total
local assistance from the State's General Fund was budgeted at approximately
75% of General Fund expenditures in recent years, including the effect of
implementing reductions in certain aid programs. To reduce State General Fund
support for school districts, the 1992-93 and 1993-94 Budget Acts caused local
governments to transfer $3.9 billion of property tax revenues to school
districts, representing loss of the post-Proposition 13 "bailout" aid. Local
governments have in return received greater revenues and greater flexibility to
operate health and welfare programs. While the Governor initially proposed to
grant new aid to local governments from the State's improved fiscal condition
in 1997-98, the decision to repay the State pension fund eliminated these
moneys.

To the extent the State should be constrained by its Article XIIIB
appropriations limit, or its obligation to conform to Proposition 98, or other
fiscal considerations, the absolute level, or the rate of growth, of State
assistance to local governments may continue to be reduced. Any such reductions
in State aid could compound the serious fiscal constraints already experienced
by many local governments, particularly counties. At least one rural county
(Butte) publicly announced that it might enter bankruptcy proceedings in August
1990, although such plans were put off after the Governor approved legislation
to provide additional funds for the county. Other counties have also indicated
that their budgetary condition is extremely grave. Los Angeles County, the
largest in the State, was forced to make significant cuts in services and
personnel, particularly in the health care system, in order to balance its
budget in FY1996-96 and FY1996-97. Los Angeles County's debt was downgraded by
Moody's and S&P in the summer of 1995. Orange County, which emerged from
Federal Bankruptcy Court protection in June 1996, has significantly reduced
county services and personnel, and faces strict financial conditions following
large investment fund losses in 1994 which resulted in bankruptcy.

Counties and cities may face further budgetary pressures as a result of
changes in welfare and public assistance programs, which were enacted in
August, 1997 in order to comply with the federal welfare reform law. Generally,
counties play a large role in the new system, and are given substantial
flexibility to develop and administer programs to bring aid recipients into the
workforce. Counties are also given financial incentives if either at the county
or statewide level, the "Welfare-to-Work" programs exceed minimum targets;
counties are also subject to financial penalties for failure to meet such
targets. Counties remain responsible to provide "general assistance" for
able-bodied indigents who are ineligible for other welfare programs. The
long-term financial impact of the new CalWORKs system on local governments is
still unknown.

Assessment Bonds. California Municipal Obligations which are assessment
bonds may be adversely affected by a general decline in real estate values or a
slowdown in real estate sales activity. In many cases, such bonds are secured
by land which is undeveloped at the time of issuance but anticipated to be
developed within a few years after issuance. In the event of such reduction or
slowdown, such development may not occur or may be delayed, thereby increasing
the risk of a default on the bonds. Because the special assessments or taxes
securing these bonds are not the personal liability of the owners of the
property assessed, the lien on the property is the only security for the bonds.
Moreover, in most cases the issuer of these bonds is not required to make
payments on the bonds in the event of delinquency in the payment of assessments
or taxes, except from amounts, if any, in a reserve fund established for the
bonds.

California Long Term Lease Obligations. Based on a series of court
decisions, certain long-term lease obligations, though typically payable from
the general fund of the State or a municipality, are not considered
"indebtedness" requiring voter approval. Such leases, however, are subject to
"abatement" in the

D-7
<PAGE>

event the facility being leased is unavailable for beneficial use and occupancy
by the municipality during the term of the lease. Abatement is not a default,
and there may be no remedies available to the holders of the certificates
evidencing the lease obligation in the event abatement occurs. The most common
cases of abatement are failure to complete construction of the facility before
the end of the period during which lease payments have been capitalized and
uninsured casualty losses to the facility (e.g., due to earthquake). In the
event abatement occurs with respect to a lease obligation, lease payments may
be interrupted (if all available insurance proceeds and reserves are exhausted)
and the certificates may not be paid when due. Litigation is brought from time
to time which challenges the constitutionality of such lease arrangements.

Other Considerations

The repayment of industrial development securities secured by real
property may be affected by California laws limiting foreclosure rights of
creditors. Securities backed by health care and hospital revenues may be
affected by changes in State regulations governing cost reimbursements to
health care providers under Medi-Cal (the State's Medicaid program), including
risks related to the policy of awarding exclusive contracts to certain
hospitals.

Limitations on ad valorem property taxes may particularly affect "tax
allocation" bonds issued by California redevelopment agencies. Such bonds are
secured solely by the increase in assessed valuation of a redevelopment project
area after the start of redevelopment activity. In the event that assessed
values in the redevelopment project decline (e.g., because of a major natural
disaster such as an earthquake), the tax increment revenue may be insufficient
to make principal and interest payments on these bonds. Both Moody's and S&P
suspended ratings on California tax allocation bonds after the enactment of
Articles XIIIA and XIIIB, and only resumed such ratings on a selective basis.

Proposition 87, approved by California voters in 1988, requires that all
revenues produced by a tax rate increase go directly to the taxing entity which
increased such tax rate to repay that entity's general obligation indebtedness.
As a result, redevelopment agencies (which, typically, are the issuers of tax
allocation securities) no longer receive an increase in tax increment when
taxes on property in the project area are increased to repay voter-approved
bonded indebtedness.

The effect of these various constitutional and statutory changes upon the
ability of California municipal securities issuers to pay interest and
principal on their obligations remains unclear. Furthermore, other measures
affecting the taxing or spending authority of California or its political
subdivisions may be approved or enacted in the future. Legislation has been or
may be introduced which would modify existing taxes or other revenue-raising
measures or which either would further limit or, alternatively, would increase
the abilities of state and local governments to impose new taxes or increase
existing taxes. It is not possible, at present, to predict the extent to which
any such legislation will be enacted. Nor is it possible, at present, to
determine the impact of any such legislation on California Municipal
Obligations in which the Fund may invest, future allocations of state revenues
to local governments or the abilities of state or local governments to pay the
interest on, or repay the principal of, such California Municipal Obligations.

Substantially all of California is within an active geologic region
subject to major seismic activity. Northern California in 1989 and Southern
California in 1994 experienced major earthquakes causing billions of dollars in
damages. The federal government provided more than $13 billion in aid for both
earthquakes, and neither event is expected to have any long-term negative
economic impact. Any California Municipal Obligation in the Fund could be
affected by an interruption of revenues because of damaged facilities, or,
consequently, income tax deductions for casualty losses or property tax
assessment reductions. Compensatory financial assistance could be constrained
by the inability of (i) an issuer to have obtained earthquake insurance
coverage rates; (ii) an insurer to perform on its contracts of insurance in the
event of widespread losses; or (iii) the federal or State government to
appropriate sufficient funds within their respective budget limitations.

D-8
<PAGE>

MUTUAL FUND TRUST

PART C. OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits

(a) Financial statements:

In Part A: Financial Highlights

In Part B: Financial Statements and the Reports thereon for the
Funds filed herein for the fiscal year ended August 31,
1997 are incorporated by reference into Part B as part
of the 1997 Annual Reports to Shareholders for such
Funds as filed with the Securities and Exchange
Commission by the Registrant on Form N-30D on November
4, 1996, accession number 0000950123-97-009105.

In Part C: None.

(b) Exhibits:

Exhibit
Number
- -------
1 Declaration of Trust. (1)
2 By-laws. (1)
3 None.
4 Specimen share certificate. (4)
5(a) Form of Investment Advisory Agreement. (1) and (3)
5(b) Form of Interim Investment Advisory Agreement.(6)
5(c) Form of Proposed Investment Advisory Agreement.(6)
5(d) Form of Proposed Investment Subadvisory Agreement between The Chase
Manhattan Bank and Chase Asset Management, Inc.(6)
5(e) Form of Proposed Investment Sub-Advisory Agreement between The
Chase Manhattan Bank and Texas Commerce Bank, National
Association. (7)
5(f) Form of Administration Agreement. (1) and (3)
5(g) Form of Administration Agreement.(6)
6(a) Form of Distribution and Sub-Administration Agreement. (1)
6(b) Distribution and Sub-Administration Agreement dated August 21,
1995.(6)
7(a) Retirement Plan for Eligible Trustees.(6)
7(b) Deferred Compensation Plan for Eligible Trustees.(6)
8(a) Form of Custodian Agreement. (1)
8(b) None.
9(a) Form of Transfer Agency Agreement. (1)
9(b) Form of Shareholder Servicing Agreement. (1)
9(c) Form of Shareholder Servicing Agreement. (6)
9(d) Agreement and Plan of Reorganization and Liquidation.(6)
10(a) Opinion of Reid & Priest re: Legality of Securities being
Registered. (2)
11 Consent of Price Waterhouse LLP. (10)
12 None.
13 N/A.
14 None.
15(a) Forms of Rule 12b-1 Distribution Plans including Selected Dealer
Agreements and Shareholder Service Agreements. (1) and (3)
15(b) Form of Proposed Rule 12b-1 Distribution Plan (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(6)
16. Schedule for Computation of Each Performance Quotation.(6)

C-1
<PAGE>

17. Financial Data Schedule. (8)

18. Form of Rule 18f-3 Multi-Class Plan. (6)

99. Power of Attorney for: Fergus Reid, III, H. Richard Vartabedian,
William J. Armstrong, John R. H. Blum, Stuart W. Cragin, Jr.,
Joseph J. Harkins, Irving L. Thode, W. Perry Neff, Roland R. Eppley,
Jr., W. D. MacCallan. (9)
- -------------------
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and Exchange
Commission on February 14, 1994.
(2) Filed as an Exhibit to Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with
the Securities and Exchange Commission on April 18, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with
the Securities and Exchange Commission on August 29, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 2 to the Registration
Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with
the Securities and Exchange Commission on October 28, 1994.
(5) Filed as an Exhibit to Post-Effective Amendment No. 3 to the Registration
Statement on Form N-1A of the Registrant (File No. 33- 75250) as filed
with the Securities and Exchange Commission on October 31, 1995.
(6) Filed as an Exhibit to Post-Effective Amendment No. 4 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on December 28, 1995.
(7) Filed as an Exhibit to Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on March 7, 1996.
(8) Filed as an Exhibit to Post-Effective Amendment No. 6 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on April 22, 1996.
(9) Filed as an exhibit to Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A of the Registrant as filed with the Securities and
Exchange Commission on September 6, 1996.

(10) Filed herewith.

ITEM 25. Persons Controlled by or Under Common
Control with Registrant
Not applicable

ITEM 26. Number of Holders of Securities

<TABLE>
<CAPTION>
Number of Record
Holders as of
Title of Series November 30, 1997
--------------- ------------------
None

Vista Premier Institutional Class A Class B
Shares Shares Shares Shares Shares
------ ------ ----------- ------- -------
<S> <C> <C> <C> <C> <C>
Vista(SM) Treasury Plus
Money Market Fund N/A 46 30 N/A N/A

Vista(SM) Federal Money
Market Fund 8,958 245 30 N/A N/A

Vista(SM) U.S. Government
Money Market Fund 9,314 545 258 N/A N/A

Vista(SM) Cash Management
Fund 13,613 382 89 N/A N/A

Vista(SM) Prime Money
Market Fund N/A 206 174 N/A 530

Vista(SM) Tax Free Money
Market Fund 2,018 167 46 N/A N/A

Vista(SM) California Tax Free
Money Market Fund 337 N/A N/A N/A N/A

Vista(SM) New York Tax Free
Money Market Fund 6,041 N/A N/A N/A N/A

Vista(SM) 100% U.S. Treasury
Securities Money Market Fund 8,052 20 25 N/A N/A
</TABLE>

C-2

<PAGE>

<TABLE>
<CAPTION>
Vista Premier Institution Class A Class B
Shares Shares Shares Shares Shares
------ ------ ----------- ------- -------
<S> <C> <C> <C> <C> <C>

Vista(SM) Tax Free Income
Fund N/A N/A N/A 2,345 505

Vista(SM) New York Tax Free
Income Fund N/A N/A N/A 2,576 496

Vista(SM) California Intermediate
Tax Free Income Fund N/A N/A N/A 568 N/A
</TABLE>

ITEM 27. Indemnification

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

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

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

Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must
be limited to amounts used, or to be used, for the preparation or presentation
of a defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise
by, or on behalf of, the recipient to repay that amount of the advance which
exceeds that amount to which it is ultimately determined that he is entitled to
receive from the Registrant by reason of indemnification; and (iii) (a) such
promise must be secured by a surety bond, other suitable insurance or an
equivalent form of security which assures that any repayments may be obtained
by the Registrant without delay or litigation, which bond, insurance or other
form of security must be provided by the recipient of the advance, or (b) a
majority of a quorum of the Registrant's disinterested, non-party Trustees, or
an independent legal counsel in a written opinion, shall determine, based upon
a review of readily available facts, that the recipient of the advance
ultimately will be found entitled to indemnification.

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against

C-3

<PAGE>

such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of it counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

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

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

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

<TABLE>
<CAPTION>
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ------------- -----------------------------
<S> <C> <C>
Thomas G. Labreque Chairman of the Board, Chairman, Chief Executive Officer
Chief Executive Officer and a Director of The Chase
and Director Manhattan Corporation and a
Director of AMAX, Inc.

Richard J. Boyle Vice Chairman of the Vice Chairman of the Board and a
Board and Director Director of The Chase Manhattan
Corporation and Trustee of
Prudential Realty Trust

Robert R. Douglass Vice Chairman of the Vice Chairman of the Board and a
Board and Director Director of The Chase Manhattan
Corporation and Trustee of HRE
Properties

Joan Ganz Cooney Director Chairman of the Executive
Committee of the Board of
Trustees, formerly Chief Executive
Officer of Children's Television
Workshop and a Director of each
of Johnson & Johnson,
Metropolitan Life Insurance
Company and Xerox Corporation

Edward S. Finkelstein Director Retired Chairman and Chief
Executive Officer and Director of
R.H. Macy & Co., Inc. and a
Director of Time Warner Inc.
</TABLE>

C-4

<PAGE>

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

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

Howard C. Kauffman Director Retired President of Exxon
Corporation and a Director of each
of Pfizer Inc. and Ryder System,
Inc.

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

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

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

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

A. Alfred Taubman Director Chairman and Director, formerly
also Chief Executive Officer, of
The Taubman Company, Inc.,
majority shareholder and Chairman
of Sotheby's Holdings, Inc., owner
of Woodward & Lothrop, Inc. and
its subsidiary, John Wanamaker,
and Chairman of A&W
Restaurants, Inc. and a Director of
R.H. Macy & Co., Inc.
</TABLE>

C-5

<PAGE>

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

Donald H. Trautlein Director President and Chief Executive
Officer of The Aspen Institute,
Chairman of Standard Fuse
Corporation and a Director of
each of ARCO Chemical
Company and Westinghouse
Electric Corporation

Kay R. Whitmore Director Chairman of the Board,
President and Chief Executive
Officer and Director of Eastman
Kodak Company
</TABLE>

Item 28(b)

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

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

Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ------------- -----------------------------
<S> <C> <C>
James Zeigon Chairman and Director Director of Chase
Asset Management
(London) Limited

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

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

Item 28(c)

Texas Commerce Bank National Association ("TCB") is an Investment Adviser and
its business has been that of a national bank.

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

Principal Occupation or Other
Position with Employment of a Substantial
Name Sub-Adviser Nature During Past Two Years
- ---- ------------- -----------------------------
<S> <C> <C>
John L. Adams Director, Vice Chairman None

Elaine B. Agather Chairman and CEO, TCB- None
Fort Worth, Vice Chairman,
TCB-Metroplex

C-6

<PAGE>

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

David W. Biegler Director Chairman, President and CEO,
ENSERCH Corporation, 300 South
St. Paul St., Dallas, TX 75201

Robert W. Bishop Executive Vice President None

Alan R. Buckwalter, III Director, Vice Chairman None

H. Worth Burke Executive Vice President None

Charles W. Duncan Director Investments, 600 Travis,
Houston, TX 77002-3007

Dan S. Hallmark Chairman and CEO None
TCB-Beaumont

Dennis R. Hendrix Director Chairman, PanEnergy Corp.,
P.O. Box 1642, Houston, TX
77251-1642

Harold S. Hook Director Chairman and CEO, American
General Corporation, P.O. Box
3247, Houston TX 77253

C-7

<PAGE>

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

Robert C. Hunter Director, Vice Chairman None

Ed Jones President and CEO, TCB- None
Midland

R. Bruce LaBoon Director Managing Partner, Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P.,
3400 Texas Commerce Tower,
Houston, TX 77002-3004

Shelaghmichael Executive Vice President None
C. Lents

S. Todd Maclin President, TCB-Dallas, None
Executive Vice President

Beverly H. McCaskill Executive Vice President None

Joe C. McKinney Chairman and CEO TCB-San None
Antonio

C-8

<PAGE>

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

Scott J. McLean Chairman and CEO TCB-El Paso None

Randal B. McLelland President and CEO, TCB- None
Rio Grande Valley

David L. Mendez Executive Vice President None

W. Merriman Morton Chairman and CEO TCB-Austin None

Paul Poullard Exective Vice President None

Jeffrey B. Reitman General Counsel None

Edward N. Robinson Executive Vice President None

Ann V. Rogers Executive Vice President None

C-9

<PAGE>

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

Marc J. Shapiro Director, Chairman, None
President and CEO

Larry L. Shryock Executive Vice President None

Kenneth L. Tilton Executive Vice President None
and Controller

Harriet S. Wasserstrum Executive Vice President None

Gary K. Wright Executive Vice President None

</TABLE>

ITEM 29. Principal Underwriters

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

(b) The following are the Directors and officers of Vista Fund
Distributors, Inc. The principal business address of each of these persons,
with the exception of Mr. Spicer, is 101 Park Avenue, New York, New York 10178.
The principal business address of Mr. Spicer is One Bush Street, San Francisco,
California 94104.

<TABLE>
<CAPTION>
Position and Offices Position and Offices
Name with Distributor with the Registrant
- ---- -------------------- --------------------
<S> <C> <C>
William B. Blundin Director Chief Executive Officer None

Richard E. Stierwalt Director Chief Operating Officer None

Timothy M. Spicer Director Chairman of the Board None

Joseph Kissel President None

George Martinez Chief Compliance Officer Secretary and
and Secretary Assistant Treasurer
</TABLE>

ITEM 30. Location of Accounts and Records

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

C-10

<PAGE>

Name Address
---- -------

Vista Fund Distributors, Inc. One Chase Manhattan Plaza,
Third Floor
New York, NY 10081

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

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

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

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

Texas Commerce Bank, National Association 600 Travis,
Houston, TX 77002

ITEM 31. Management Services

Not applicable

ITEM 32. Undertakings

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

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

C-11

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has certified that it meets all of the
requirements for effectiveness of the Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York and the
State of New York on the 26th day of December, 1997.

MUTUAL FUND TRUST

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

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

* Chairman December 26, 1997
- ------------------------------- and Trustee
Fergus Reid, III

* Trustee December 26, 1997
- -------------------------------
William J. Armstrong

* Trustee December 26, 1997
- -------------------------------
John R.H. Blum

* Trustee December 26, 1997
- -------------------------------
Joseph J. Harkins

*
- ------------------------------- Trustee December 26, 1997
Richard E. Ten Haken

* Trustee December 26, 1997
- -------------------------------
Stuart W. Cragin, Jr.

* Trustee December 26, 1997
- -------------------------------
Irving L. Thode

/s/ H. Richard Vartabedian President December 26, 1997
- ------------------------------- and Trustee
H. Richard Vartabedian

* Trustee December 26, 1997
- -------------------------------
W. Perry Neff

* Trustee December 26, 1997
- -------------------------------
Roland R. Eppley, Jr.

* Trustee December 26, 1997
- -------------------------------
W.D. MacCallan

Trustee December 26, 1997
- -------------------------------
Sarah E. Jones

Trustee December 26, 1997
- -------------------------------
Leonard M. Spalding

/s/ Martin Dean Treasurer and December 26, 1997
- ------------------------------- Principal
Martin Dean Accounting
Officer

/s/ H. Richard Vartabedian Attorney in Fact December 26, 1997
- -------------------------------
H. Richard Vartabedian

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 11 to the registration statement on Form N-1A (the "Registration
Statement") of our reports dated October 14, 1997, relating to the financial
statements and selected per share data and ratios for a share of beneficial
interest outstanding appearing in the August 31, 1997 Annual Reports to
Shareholders of Vista U.S. Government Money Market Fund, Vista 100% U.S.
Treasury Securities Money Market Fund, Vista Cash Management Fund, Vista
Treasury Plus Money Market Fund, Vista Federal Money Market Fund, Vista Prime
Money Market Fund, Vista Tax Free Money Market Fund, Vista New York Tax Free
Money Market Fund, Vista California Tax Free Money Market Fund, Vista Tax Free
Income Fund, Vista New York Tax Free Income Fund and Vista California
Intermediate Tax Free Fund (separately managed portfolios of Mutual Fund Trust),
which are also incorporated by reference in the Registration Statement. We also
consent to the references to us under the heading "Financial Highlights" in the
Prospectuses and under the heading "Independent Accountants" in the Statement of
Additional Information.

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 23, 1997