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PROSPECTUS
CHASE VISTA(SM) CASH MANAGEMENT FUND
VISTA(SM) SHARES
INVESTMENT STRATEGY: CURRENT INCOME
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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 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 (800) 437-9912. 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 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.
December 29, 1997, As revised March 13, 1998
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EXPENSE SUMMARY
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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>
Chase Vista Cash
Management Fund
Vista Shares
<S> <C>
Annual Fund Operating Expenses (as a percentage of average net assets)
Investment Advisory Fee ........................................ 0.10%
12b-1 Fee ...................................................... n/a
Shareholder Servicing Fee (after estimated waiver of fee)* ..... 0.33%
Other Expenses ................................................. 0.16%
----
Total Fund Operating Expenses (after waivers of fees)* ......... 0.59%
Examples
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
</TABLE>
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* 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% and Total Fund Operating
Expenses would be 0.61%. 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 0.72% of average net assets during such period.
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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 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."
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FINANCIAL HIGHLIGHTS
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On May 3, 1996, the Hanover Cash Management Fund merged into Chase 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 Chase
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 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.
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CASH MANAGEMENT FUND
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<TABLE>
<CAPTION>
Year Ended
12/1/95 ---------------------------
Year 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 ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- --------- ------------ ---------
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 $ 1.00 $ 1.00 $ 1.00
============ ========= ============ =========
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%
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 ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
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 ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
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>
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* Fund commenced operations January 17, 1989.
** In 1996, the Fund changed its fiscal year end from November 30 to August 31.
# Periods less than one year have been annualized.
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FUND OBJECTIVE AND INVESTMENT APPROACH
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CHASE 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.
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INVESTMENT POLICIES
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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 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.
The Fund is classified as a "diversified" fund under federal securities law.
There can be no assurance that the Fund will achieve its investment objective.
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OTHER INVESTMENT PRACTICES
The Fund may also engage in the following investment practices when consistent
with its 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 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 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
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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.
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.
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ADDITIONAL INVESTMENT POLICIES
The 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.
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
motor vehicle receivables or credit card receivables.
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.
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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.
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 notesor 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.
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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: (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 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.
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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"
and "Additional Investment Policies."
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
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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 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.
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MANAGEMENT
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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.
Texas Commerce Bank, National Association ("TCB") is the sub-investment adviser
to the 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 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 the Fund's average daily net assets. TCB is
located at 600 Travis Street, Houston, Texas 77002.
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HOW TO BUY, SELL AND EXCHANGE SHARES
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Shares are purchased without a sales load at the net asset value next
determined after the Fund 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 in proper form
prior to the Fund's Cut-off Time. The Funds' Cut-off Time (Eastern time) is
2:00 p.m.
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 received for shares after a Fund's
Cut-off Time and prior to 4:00 p.m., Eastern time on the 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 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 the Fund's
Cut-off Time will generally be available for the purchase of shares the
following Fund Business Day. The Fund reserves the right to reject any purchase
order.
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PURCHASE OF SHARES
The minimum initial investment by a shareholder is $1,000. The minimum amount
for subsequent investments is $250. The Fund reserves the right, in its sole
discretion, to reject any purchase order or cease offering shares for purchase
at any time.
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PURCHASE BY MAIL
Shares of the Fund may be purchased by sending a completed Subscription
Agreement (included with this Prospectus or obtainable from Chase Global Funds
Services Company) to "Cohen & Steers/Vista Cash Management Fund", c/o Chase
Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798,
accompanied by a check payable to the Fund in payment for the shares. Completed
Subscription Agreements sent to Chase Global Funds Services Company will be
forwarded to the Fund and will not be effective until received by the Fund.
When purchases are made by check, redemptions will not be allowed until
clearance of 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.
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PURCHASE BY WIRE
1. Telephone toll free from any continental state: (800) 437-9912. Give the
name of the Fund, name(s) in which shares are to be registered, address, social
security or tax identification number (where applicable), dividend payment
election, amount to be wired, name of the wiring bank and name and telephone
number of the person to be contacted in connection with the order. A wire
reference control number will be assigned.
2. Instruct the wiring bank to transmit the specified amount in federal funds
($1,000 or more) to the Custodian:
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081-1000
ABA # 021000021
Account: DDA # 910-2-733012
Attn: Cohen & Steers/Chase Vista Cash Management Fund
For further credit to: (Account name)
Account Number:
Wire Reference Control #:
3. Complete the Subscription Agreement located in the back of this Prospectus.
Mail the Subscription Agreement to the Transfer Agent:
Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208
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AUTOMATIC INVESTMENT PLAN
The Fund's automatic investment plan (the "Plan") provides a convenient way to
invest in the Fund. Under the Plan, you can have money transferred
automatically from your checking account to the Fund each month to buy
additional shares. If you are interested in this Plan, please refer to the
automatic investment plan section of the Subscription Agreement included with
this prospectus or contact your dealer. The market value of the Fund's shares
may fluctuate and a systematic investment plan such as this will not assure a
profit or protect against a loss. You may discontinue the program at any time
by notifying the Fund by mail or phone.
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ADDITIONAL INVESTMENTS
An investor may add to his or her account by purchasing additional shares of
the Fund by mailing a check to the Fund (payable to "Cohen & Steers/
Chase Vista Cash Management Fund") 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.
Confirmed purchases will be done only at the discretion of the Investment
Advisor.
Purchases 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.
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EXCHANGE PRIVILEGE
You may exchange some or all of your Fund shares for shares of any other mutual
funds within the Cohen & Steers Family of Funds and visa versa, subject to the
applicable Fund sales charge, if any.
An exchange of shares pursuant to the exchange privilege may result in a
shareholder realizing a taxable gain or loss for income tax purposes. The
exchange privilege is available to shareholders residing in any state in which
the shares being acquired may be legally sold. A shareholder wishing to utilize
the exchange privilege should read the prospectus of the fund whose shares are
being acquired. Certain dealers may limit or prohibit the right of shareholders
to utilize the exchange privilege.
The exchange privilege may be limited or terminated as to any shareholder who
makes exchanges more than four times a year. The exchange privilege can be
modified or revoked for all shareholders upon 60 days prior written notice.
There is no charge for the exchange privilege. For additional information
concerning exchanges, or to effect exchanges, contact Chase Global Fund
Services Company at (800) 437-9912.
The discussion of the exchange privilege in this Prospectus supersedes the
discussion of the exchange privilege in the SAI for investors purchasing shares
of the Cohen & Steers/Chase Vista Cash Management Fund.
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REDEMPTION OF SHARES
Upon receipt by the Fund 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 Cohen &
Steers/Chase Vista Cash Management Fund, c/o Chase Global Funds Services
Company, P.O. Box 2798, Boston, MA 02208-2798. The effective date of the
redemption request will be when the request is received in proper form by the
Fund. The redemption value of a Fund share is the net asset value per share
next computed after the redemption request is received in proper form.
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.
Shareholders should contact Chase Global Funds Services Company, (800)
437-9912, to obtain further information on this service and the related
charges.
- --------------------------------------------------------------------------------
REDEMPTION BY TELEPHONE
Shareholders who authorize telephone redemptions in the Subscription Agreement
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 Subscription Agreement or mail the
proceeds to the address of record, except that telephone redemptions of less
than $1,000 will be mailed. 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
12
<PAGE>
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 Funds Services
Company at (800) 437-9912. The telephone redemption privilege may be modified
or terminated without notice.
- --------------------------------------------------------------------------------
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.
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 $1,000 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 30 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.
- --------------------------------------------------------------------------------
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 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 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
13
<PAGE>
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 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
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 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, 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.
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.
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.
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.
14
<PAGE>
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
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENTS
The Trust has entered into a shareholder servicing agreement 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.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase 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 Chase 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
15
<PAGE>
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 and/or VFD.
Chase and its affiliates and the Chase Vista 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
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.
- --------------------------------------------------------------------------------
DISTRIBUTOR AND SUB-ADMINISTRATOR
The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase.
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 for the Fund 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.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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
16
<PAGE>
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
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 (800) 437-9912 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.
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.
17
<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.
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.
18
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
20
<PAGE>
Tax Free Income Fund
Vista Mutual Fund Investments offered
through the Gintel Group
Prospectus Enclosed
Gintel & Co.
6 Greenwich Office Park
Greenwich, CT 06831
203-622-6400
Chase Global Funds Services Co.
P.O. Box 2798
Boston, MA 02208-2798
800-344-3092
[SPINE]
- --------------------------------------------------------------------------------
Gintel
- --------------------------------------------------------------------------------
<PAGE>
[Logo of Chase Vista Funds]
PROSPECTUS
TAX FREE INCOME FUND
CLASS A
-------------------------------------------
INVESTMENT STRATEGY: INCOME
-------------------------------------------
December 29, 1997, As revised March 13, 1998
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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
Investments in the Fund are not bank deposits or obligations of, or guaranteed
or endorsed by, The Chase Manhattan Bank or any of its affiliates and are not
insured by the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.
- --------------------------------------------------------------------------------
<PAGE>
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 ........................................................... 27
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>
* 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 0.30%, 0.25% and 0.25%, respectively, and Total
Fund Operating Expenses would be 1.30%.
** Long-term shareholders in mutual funds with 12b-1 fees, such as Class
A 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.
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
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."
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.
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>
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
- -------------------------------------------------------------------------------
Year Ended 9/4/87*
- ------------------------------------------------------------------- to
10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87
- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 11.52 $ 11.12 $10.43 $10.58 $10.63 $10.08 $10.00
- ------- ------- ------ ------ ------ ------ ------
0.662 0.731 0.727 0.723 0.756 0.738 0.059
1.412 0.556 0.693 (0.094) 0.006 0.603 0.021
- ------- ------- ------ ------ ------ ------ ------
2.074 1.287 1.420 0.629 0.762 1.341 0.080
- ------- ------- ------ ------ ------ ------ ------
0.662 0.731 0.726 0.726 0.759 0.791 --
0.237 0.156 -- 0.055 0.053 -- --
- ------- ------- ------ ------ ------ ------ ------
0.899 0.887 0.726 0.781 0.812 0.791 --
- ------- ------- ------ ------ ------ ------ ------
$ 12.70 $ 11.52 $11.12 $10.43 $10.58 $10.63 $10.08
======= ======= ====== ====== ====== ====== ======
18.72% 11.99% 13.98% 6.18% 7.48% 13.83% 5.41%
$83,672 $17,548 $5,425 $3,973 $3,196 $1,197 $ 101
0.23% 0.00% 0.04% 0.12% 0.00% 0.00% 0.00%#
5.25% 6.26% 6.71% 6.86% 7.06% 7.50% 7.35%
1.20% 2.34% 4.04% 2.50% 2.50% 2.00% 2.00%#
4.28% 3.92% 2.71% 4.48% 4.56% 5.50% 5.35%#
149% 266% 211% 89% 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
- ---------------
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.
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.
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.
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.
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.
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
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.
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 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
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.
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. 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.
9
<PAGE>
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 securities 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 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
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.
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 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.
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 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.
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.
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.
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 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 Chase 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 purchase of the Funds' Class A shares made from January 1, 1998 through
April 30, 1998, no initial sales charge will be assessed if you are opening or
adding to a Vista prototype IRA by transferring or rolling over $5,000 or more
of assets from a qualified plan, consisting of redemption proceeds from
non-Chase Vista mutual funds on which you paid a front-end or deferred sales
load. In connection with such purchases of Class A shares, the Funds'
distributor will pay broker-dealers a 1% commission. If you open or add to a
Vista prototype IRA, from January 1, 1998 through April 30, 1998, by investing
$5,000 or more,
16
<PAGE>
the annual IRA maintenance fee payable to the IRA sponsor will be waived for the
life of the account. In addition, sales charges are waived if you are using
redemption proceeds received within the prior ninety days from non-Chase 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 Chase Vista and non-Chase Vista mutual funds. With
Board of Trustee approval, the money that is invested in Chase 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 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 Chase Vista Fund shares), financial institution trust departments investing
an aggregate of $1 million or more in the Chase Vista Funds and clients of
certain administrators of tax-qualified plans when proceeds from repayments of
loans to participants are invested (or reinvested) in the Chase Vista 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 or other qualified plan 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 Chase Vista 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
17
<PAGE>
own accounts, if such accounts are linked to a master account of such investment
adviser or financial planner on the books and records of the broker or agent.
Such purchases may also be made for retirement and deferred compensation plans
and trusts used to fund those plans.
Investors may incur a fee if they effect transactions through a broker or agent.
Purchases of the Fund's Class A shares may be made with no initial sales charge
in accounts opened by a bank, trust company or thrift institution which is
acting as a fiduciary exercising investment discretion, provided that
appropriate notification of such fiduciary relationship is reported at the time
of the investment to the 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.
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,
18
<PAGE>
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 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
19
<PAGE>
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 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.
20
<PAGE>
Confirmed redemptions will be done only at the discretion of the Investment
Advisor.
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.
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.
21
<PAGE>
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
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.
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 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 Chase Vista Funds, and activities intended to promote
the Fund's Class A shares may also benefit the Fund's other shares and other
Chase Vista funds.
FD may provide promotional incentives to broker-dealers that meet specified
targets for one or
22
<PAGE>
more Chase 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 Chase 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.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase Vista Funds with balances held in Chase bank accounts for purposes of
determining eligibility for certain bank privileges that are based on
23
<PAGE>
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 Chase 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.
Chase and its affiliates and the Chase Vista 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 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.
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. Fund securities and cash may be held by
sub-custodian banks if such arrangements are reviewed and approved by the
Trustees.
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.
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;
24
<PAGE>
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.
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.
The business and affairs of the Trust are managed under the general
25
<PAGE>
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.
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
26
<PAGE>
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.
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.
"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. 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
27
<PAGE>
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.
28
<PAGE>
Tax Free Income Fund
Investment Advisor
Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Dealer and Shareholder Servicing Agent
Gintel & Co.
Shareholder Processing Agent
Chase Global Funds Services Company
Mutual Fund offered through Gintel & Co.
Gintel Fund
(managed by Gintel Asset Management, Inc.)
Federal Money Market Fund
Cash Management Money Market Fund
U.S. Treasury Income Fund
Tax Free Income Fund
(portfolios of the Vista Family of Mutual Funds)
<PAGE>
[CHASE VISTA FUNDS LOGO]
PROSPECTUS
PRIME MONEY MARKET FUND
CLASS B AND C SHARES
-----------------------------------
INVESTMENT STRATEGY: CURRENT INCOME
-----------------------------------
December 29, 1997, As revised March 13, 1998
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 Chase 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
INVESTMENTS IN THE FUND ARE 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>
TABLE OF CONTENTS
<TABLE>
<S> <C>
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
Other Investment Practices ........................................................ 6
Management ........................................................................ 11
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management, the
Fund's sub-adviser
About Your Investment ............................................................. 11
How to Buy, Sell and Exchange Shares .............................................. 12
How the Fund Values Its Shares .................................................... 17
How Dividends and Distributions Are Made; Tax Information ......................... 17
How the Fund distributes its earnings, and tax treatment related to those earnings
Other Information Concerning the Fund ............................................. 18
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization
Performance Information ........................................................... 22
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. The examples show the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<CAPTION>
Class B Class C
SHAREHOLDER TRANSACTION EXPENSES Shares Shares
---- ----
<S> <C> <C>
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>
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------- ------- ------- ---------
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
* 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.
3
<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".
4
<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.
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.
5
<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.
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 60 days or less.
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.
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<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.
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
7
<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.
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
8
<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.
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 motor vehicle receivables or
credit card receivables.
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
9
<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
10
<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
Chase 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.
11
<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 Chase 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 Chase 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 Chase 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 Chase 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 Chase 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
Chase 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 Chase Vista Service Center. Call the Chase 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
12
<PAGE>
have entered into Selected Dealer Agreements with the Funds' 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 Chase 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.
13
<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.
Year 1 2 3 4 5 6 7 8+
- ------ ---- ---- ---- ---- ---- ---- ---- ---
CDSC 5% 4% 3% 3% 2% 1% 0% 0%
In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during
the CDSC period. 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 Chase 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 ChaseVista 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
14
<PAGE>
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."
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
Chase 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 Chase 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 Chase 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 Chase 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 Chase Vista's Telephone Redemption Privilege to redeem shares from
your account unless you have notified the Chase 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase Vista Service Center by telephone. In
this event,
15
<PAGE>
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.
SYSTEMATIC WITHDRAWAL PLAN. Make regular withdrawals of $100 or more monthly,
quarterly or semi-annually. Call the Chase 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 Chase 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
Chase Vista funds at net asset value beginning 15 days after purchase, subject
to any minimum investment requirement. Not all Chase Vista funds offer all
classes of shares. The prospectus of the other Chase 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 Chase Vista Service Center for procedures for telephone transactions.
Ask your investment representative or the Chase Vista Service Center for
prospectuses of other Chase Vista funds. Shares of certain Chase 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 Chase Vista
management or the Trustees believe doing so would be in the best interests of
the Fund, the Fund
16
<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 Chase 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.
17
<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.
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.
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
18
<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 Chase
Vista 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 Chase Vista funds.
VFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Chase 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.
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
Chase Vista Funds with balances held in Chase bank accounts for purposes of
19
<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 Chase 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 Chase Vista 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.
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
20
<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
21
<PAGE>
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
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.
22
<PAGE>
MAKE THE MOST OF YOUR CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista Fund shareholder.
[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.
[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B and Class C 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 Chase
Vista account to another on a regular, prearranged basis. There is no
additional charge for this service.
[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Chase Vista Funds in
the same class of shares without charge. The exchange privilege allows
you to adjust your investments as your objectives change.
Investors may not maintain, within the same fund, simultaneous plans
for systematic investment or exchange and systematic withdrawal or
exchange.
[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time
privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar
days of the redemption, accompanied by payment for the shares (not in
excess of the redemption).
Class B and Class C 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 and Class C shares.
For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
23
<PAGE>
CHASE 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 FUNDS LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VPRMB-1-398
<PAGE>
[CHASE VISTA FUNDS LOGO]
PROSPECTUS
NEW YORK TAX FREE INCOME FUND
CLASS A AND B SHARES
INVESTMENT STRATEGY: INCOME
December 29, 1997, As revised March 13, 1998
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 Chase 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Investments in the Fund are not bank deposits or obligations of, or guaranteed
or endorsed by, The Chase Manhattan Bank or any of its affiliates and are not
insured by the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.
<PAGE>
(This Page Intentionally Left Blank)
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 Chase 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.
Class A Class B
Shares Shares
------- -------
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%
===== ====
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
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
* The maximum deferred sales charge on Class B shares applies to redemptions
during the first year after purchase; the charge generally declines by 1%
annually thereafter (except in the fourth year), reaching zero after six
years. See "How to Buy, Sell and Exchange Shares."
** Reflects current 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>
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 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 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.
NEW YORK TAX FREE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------
Year ended 11/1/93 Year ended
----------------------------------- 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%
<CAPTION>
Class A Class B
------------------------------------------------- ---------------------------------------
Year ended 9/4/87* Year ended 11/4/93**
--------------------------------------- to ---------------------------- through
10/31/91 10/31/90 10/31/89 10/31/88 10/31/87 8/31/97 8/31/97 8/31/97 8/31/94
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ... $ 10.48 $ 10.60 $ 10.62 $ 10.08 $ 10.00 $ 11.33 $ 11.41 $ 11.27 $ 12.11
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income ................. 0.635 0.671 0.739 0.701 0.053 0.465 0.469 0.485 0.419
Net Gains or (Losses) in Securities
(both realized and unrealized) ...... 0.762 (0.100) 0.045 0.590 0.027 0.430 (0.086) 0.162 (0.543)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment Operations ...... 1.40 0.571 0.784 1.291 0.080 0.895 0.383 0.647 (0.124)
Less Distributions:
Dividends from Net Investment Income .. 0.635 0.672 0.741 0.751 0.000 0.442 0.463 0.507 0.433
Distributions from Capital Gains ...... 0.000 0.020 0.063 0.000 0.000 0.023 -- -- 0.283
------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions ................... 0.635 0.692 0.804 0.751 0.000 0.465 0.463 0.507 0.716
------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period ......... $ 11.25 $ 10.48 $ 10.60 $ 10.62 $ 10.08 $ 11.76 $ 11.33 $ 11.41 $ 11.27
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return(1) ........................ 13.68% 5.56% 7.69% 13.24% 5.41% 8.03% 3.46% 5.99% (1.11%)
Ratios/Supplemental Data Net Assets,
End of Period (000 omitted) ........... $24,062 20,413 $17,545 $ 5,557 $ 101 $13,501 $13,657 $10,633 $ 7,234
Ratio of Expenses to Average
Net Assets# .........s................. 0.76% 0.71% 0.20% 0.00% 0.00% 1.64% 1.65% 1.61% 1.51%
Ratio of Net Investment Income
to Average# .......................... 5.85% 6.34% 6.90% 7.16% 7.49% 4.03% 4.01% 4.35% 4.28%
Net Assets Ratio of Expenses without
waivers and assumption of expenses
to Average Net Assets# ............... 1.71% 1.68% 2.30% 1.50% 1.50% 1.68% 1.76% 1.87% 1.76%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net Assets# ... 4.90% 5.38% 4.81% 5.66% 5.99% 3.99% 3.90% 4.09% 4.03%
Portfolio Turnover Rate ................ 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.
6 & 7
<PAGE>
FUND OBJECTIVES
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.
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.
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.
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.
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.
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.
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
9
<PAGE>
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. 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
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.
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
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.
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
securities 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.
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.
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
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.
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.
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
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
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 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 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
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 Chase
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
Chase 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 Chase 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 Chase
Vista Service Center. Call the Chase Vista Service
16
<PAGE>
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 Chase Vista Service Center receives your
order in proper form. In most cases, in order to receive that day's public
offering price, the Chase 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.
If you are considering redeeming or exchanging shares or transferring shares to
another person shortly after purchase, you should pay for those shares with a
certified check to avoid any delay in redemption, exchange or transfer.
Otherwise the Fund may delay payment until the purchase price of those shares
has been collected or, if you redeem by telephone, until 15 calendar days after
the purchase date. To eliminate the need for safekeeping, the Fund will not
issue certificates for your Class A shares unless you request them. Due to the
conversion feature of Class B shares, certificates for Class B shares will not
be issued and all Class B shares will be held in book entry form.
Class A Shares
The public offering price of Class A shares is the net asset value plus a sales
charge that varies depending on the size of your purchase. The Fund receives
the net asset value. The sales charge is allocated between your broker-dealer
and the Fund's distributor as shown in the following table, except when the
Fund's distributor, in its discretion, allocates the entire amount to your
broker-dealer.
<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.
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.
17
<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 the purchase price of shares being redeemed.
Year 1 2 3 4 5 6 7 8+
- ------ ---- ---- ---- ---- ---- ---- ---- ---
CDSC 5% 4% 3% 3% 2% 1% 0% 0%
In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during
the CDSC period. When a share that has appreciated in value is redeemed during
the CDSC period, a CDSC is assessed only on its initial purchase price. For
information on how sales charges are calculated if you exchange your shares,
see "How to Exchange Your Shares." The Fund's distributor pays broker-dealers a
commission of 4.00% of the offering price on sales of Class B shares, and the
distributor receives the entire amount of any CDSC you pay.
GENERAL
You may be eligible to buy Class A shares at reduced sales charges. Consult
your investment representative or the Chase Vista Service Center for details
about Chase 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 Funds' Class A shares made from January 1, 1998
through April 30, 1998, no initial sales charge will be assessed if you are
opening or adding to a Vista prototype IRA by transferring or rolling over
$5,000 or more of assets from a qualified plan, consisting of redemption
proceeds from non-Chase Vista mutual funds on which you paid a front-end or
deferred sales load. In connection with such purchases of Class A shares, the
Funds' distributor will pay broker-dealers a 1% commission. If you open or add
to a Vista prototype IRA, from January 1, 1998 through April 30, 1998, by
investing $5,000 or more, the annual IRA maintenance fee payable to the IRA
sponsor will be waived for the life of the account. In addition, sales charges
are waived if you are using redemption proceeds received within the prior
ninety days from non-Chase 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 Chase Vista and non-Chase Vista mutual funds. With
Board of Trustee approval, the money that is invested in Chase 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
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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 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 Chase Vista Fund shares), financial institution trust
departments investing an aggregate of $1 million or more in the Chase Vista
Funds and clients of certain administrators of tax-qualified plans when
proceeds from repayments of loans to participants are invested (or reinvested)
in the Chase Vista 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 or other qualified plan 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 Chase Vista 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.
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, the Fund's distributor or the Chase Vista
Service Center.
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Shareholders of record of any Chase Vista fund as of November 30, 1990 and
certain immediate family members may purchase the Fund's Class A shares with no
initial sales charge for as long as they continue to own Class A shares of any
Chase Vista fund, provided there is no change in account registration.
The Fund may sell Class A shares at net asset value without an initial sales
charge in connection with the acquisition by the Fund of assets of an
investment company or personal holding company. The CDSC will be waived on
redemption of Class B shares arising out of death or disability or in
connection with certain withdrawals from IRA or other retirement plans. Up to
12% of the value of Class B shares subject to a systematic withdrawal plan may
also be redeemed each year without a CDSC, provided that the Class B account
had a minimum balance of $20,000 with respect to the applicable Fund at the
time the systematic withdrawal plan was established. The SAI contains
additional information about purchasing the Fund's shares at reduced sales
charges.
The Fund reserves the right to change any of these policies on purchases
without an initial sales charge at any time and may reject any such purchase
request.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase 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 Chase Vista Funds.
Shareholders of other Chase 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
Chase 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 Chase
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
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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 Chase 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 Chase 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 Chase Vista's Telephone Redemption Privilege
to redeem shares from your account unless you have notified the Chase 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase 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 Chase Vista Service Center at 1-800-34-VISTA for
complete instructions.
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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 Chase 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
Chase Vista funds at net asset value beginning 15 days after purchase. Not all
Chase Vista funds offer all classes of shares. The prospectus of the other
Chase 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 Chase
Vista money market funds (other than the Class B shares of the 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 Chase
Vista non-money market fund may be exchanged into the Class B shares of the
Prime Money Market Fund in order to continue the aging of the initial purchase
of such shares.
For federal income tax purposes, an exchange is treated as a sale of shares and
generally results in a capital gain or loss.
EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Chase 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 Chase Vista Service Center for prospectuses of other
Chase Vista Funds. Shares of certain Chase Vista Funds are not available to
residents of all states.
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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 Chase 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 Chase 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
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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 Chase 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 Chase 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 Chase Vista Service Center
does not receive your election, the distribution will be reinvested in the
Fund. Similarly, if the Fund or the Chase 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.
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
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to you by the Fund for the preceding year.
The above is only a summary of certain federal income tax consequences of
investing in the Fund. You should consult your tax adviser to determine the
precise effect of an investment in the Fund on your particular tax situation
(including possible liability for 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 Chase Vista 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 Chase Vista funds.
VFD may provide promotional incentives to broker-dealers that meet specified
targets for one or more Chase 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 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
Chase 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
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from the Fund or other sources available to it.
SHAREHOLDER
SERVICING AGENTS
The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase) under which the shareholder
servicing agents have agreed to provide certain support services to their
customers who beneficially own Class A or Class B shares of the Fund. These
services include 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.
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 shareholers, since
it will be paid by Chase and/or VFD.
Chase and its affiliates and the Chase Vista 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.
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ADMINISTRATOR
AND SUB-ADMINISTRATOR
Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.10% of the Fund's
average daily net assets.
VFD provides certain sub-administrative services to the Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay
for certain expenses incurred in connection with organizing new series of the
Trust and certain other ongoing expenses of the Trust. VFD is located at 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 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
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entitled to one vote for each whole share held, and each fractional share shall
be entitled to a proportionate fractional vote, except that Trust shares held
in the treasury of the Trust shall not be voted. Shares of each class of the
Fund generally vote together except when required under federal securities laws
to vote separately on matters that only affect a particular class, such as the
approval of distribution plans for a particular class.
The Fund issues multiple classes of shares. This Prospectus relates to Class A
and Class B shares of the Fund. The Fund may offer other classes of shares in
addition to these classes and may determine not to offer certain classes of
shares. The categories of investors that are eligible to purchase shares and
minimum investment requirements may differ for each class of the Fund's shares.
In addition, other classes of Fund shares may be subject to differences in
sales charge arrangements, ongoing distribution and service fee levels, and
levels of certain other expenses, which would affect the relative performance
of the different classes. Investors may call 1-800-34-VISTA to obtain
additional information about other classes of shares of the Fund that are
offered. Any person entitled to receive compensation for selling or servicing
shares of the Fund may receive different levels of compensation with respect to
one class of shares over another.
The business and affairs of the Trust are managed under the general direction
and supervision of 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.
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
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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 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.
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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 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 CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista Fund shareholder.
[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.
[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B accounts) monthly, quarterly or
semiannually. A minimum account balance of $5,000 is required to
establish a systematic withdrawal plan for Class A accounts.
[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Chase
Vista account to another on a regular, prearranged basis. There is no
additional charge for this service.
[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Chase Vista Funds in
the same class of shares without charge. The exchange privilege allows
you to adjust your investments as your objectives change.
Investors may not maintain, within the same fund, simultaneous plans
for systematic investment or exchange and systematic withdrawal or
exchange.
[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time
privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar
days of the redemption, accompanied by payment for the shares (not in
excess of the redemption).
Class B shareholders who have redeemed their shares and paid a CDSC with such
redemption may purchase Class A shares with no initial sales charge (in an
amount not in excess of their redemption proceeds) if the purchase occurs within
90 days of the redemption of the Class B shares.
For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
31
<PAGE>
CHASE 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 FUNDS LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VNYT-1-398X
<PAGE>
CHASE 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 FUNDS LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VNYT-1-398
<PAGE>
[CHASE VISTA FUNDS LOGO]
PROSPECTUS
CALIFORNIA INTERMEDIATE
TAX FREE INCOME FUND
---------------------------
INVESTMENT STRATEGY: INCOME
---------------------------
December 29, 1997, As revised March 13, 1998
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 Chase 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Investments in the Fund are not bank deposits or obligations of, or guaranteed
or endorsed by, The Chase Manhattan Bank or any of its affiliates and are not
insured by the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.
<PAGE>
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 Chase Vista Privileges ................................ 26
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%
======
EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return: 1 Year 3 Years 5 Years 10 Years
-------- --------- --------- ---------
Shares+ ....................... $51 $63 $77 $117
* 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.
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."
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.
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
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.
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.
WHO MAY WANT TO INVEST
The Fund may be most appropriate for investors who...
o Are seeking monthly income exempt from federal and state income tax
o Are investing for mid- to long-term investment goals
6
<PAGE>
o Own or plan to own other types of investments for diversification purposes
o 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.
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.
7
<PAGE>
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. 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.
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
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.
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
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 Chase
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
Chase 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,
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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 Chase 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 Chase
Vista Service Center. Call the Chase 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 Chase Vista Service Center receives your
order in proper form. In most cases, in order to receive that day's public
offering price, the Chase 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.
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.
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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
- --------------------------- -------- ---------- ----------------------------
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
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 Chase 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 Funds' Class A shares made from January 1, 1998 through April
30, 1998, no initial sales charge will be assessed if you are opening or adding
to a Vista prototype IRA by transferring or rolling over $5,000 or more of
assets from a qualified plan, consisting of redemption proceeds from non-Chase
Vista mutual funds on which you paid a front-end or deferred sales load. In
connection with such purchases of Class A shares, the Funds' distributor will
pay broker-dealers a 1% commission. If you open or add to a Vista prototype
IRA, from January 1, 1998 through April 30, 1998, by investing $5,000 or more,
the annual IRA maintenance fee payable to the IRA sponsor will be waived for
the life of the account. In addition, sales charges are waived if you are using
redemption proceeds received within the prior ninety days from non-Chase 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 Chase Vista and non-Chase Vista mutual funds. With
Board of Trustee approval, the money that is invested in Chase 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
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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 Chase Vista Fund shares), financial institution trust
departments investing an aggregate of $1 million or more in the Chase Vista
Funds and clients of certain administrators of tax-qualified plans when
proceeds from repayments of loans to participants are invested (or reinvested)
in the Chase Vista 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 or other qualified plan 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
Chase Vista 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 Chase Vista Service
Center.
Shareholders of record of any Chase 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 Chase
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
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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.
The Fund reserves the right to change any of these policies on purchases
without an initial sales charge at any time and may reject any such purchase
request.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase 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 Chase Vista Funds.
Shareholders of other Chase 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
Chase 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 Chase 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 Chase 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.
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TELEPHONE REDEMPTIONS. You may use Chase Vista's Telephone Redemption
Privilege to redeem shares from your account unless you have notified the Chase
Vista Service 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase 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 Chase 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 Chase 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.
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HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other
Chase Vista funds at net asset value beginning 15 days after purchase. Not all
Chase Vista funds offer all classes of shares. The prospectus of the other
Chase 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 Chase 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 Chase Vista Service Center for prospectuses of other
Chase Vista Funds. Shares of certain Chase 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 Chase 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 Chase 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.
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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 lease
annually. 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
Chase 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 Chase 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 Chase Vista Fund. If the Chase Vista Service
Center does not receive your election, the distribution will be reinvested in
the Fund. Similarly, if the Fund or the Chase 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
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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.
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 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 Chase
Vista Funds, and activities intended to promote the Fund's shares may also
benefit the Fund's other shares and other Chase 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
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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 Chase 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 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.
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.
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Chase and its affiliates and the Chase Vista Funds, affiliates, agents and
subagents may exchange among themselves and others certain information about
shareholders and their accounts, including information used to offer investment
products and insurance products to them, unless otherwise contractually
prohibited.
ADMINISTRATOR AND
SUB-ADMINISTRATOR
Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.10% of the Fund's
average daily net assets.
VFD provides certain sub-administrative services to the Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay
for certain expenses incurred in connection with organizing new series of the
Trust and certain other ongoing expenses of the Trust. VFD is located at 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. 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
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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.
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.
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
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
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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. 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 CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista Fund shareholder.
o 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.
o 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.
o SYSTEMATIC EXCHANGE--Transfer assets automatically from one Chase Vista
account to another on a regular, prearranged basis. There is no additional
charge for this service.
o FREE EXCHANGE PRIVILEGE--Exchange money between Chase 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.
o 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 Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
26
<PAGE>
Chase Vista Mutual Funds & Retirement Products
CHASE VISTA INTERNATIONAL EQUITY FUNDS
Latin American Equity Fund
Southeast Asian Fund
Japan Fund
European Fund
International Equity Fund
CHASE VISTA U.S. EQUITY FUNDS
Small Cap Opportunities Fund
Small Cap Equity Fund (closed to new investors)
The Growth Fund of Washington
Capital Growth Fund
Growth and Income Fund
Large Cap Equity Fund
Equity Income Fund
Balanced Fund
CHASE VISTA FIXED INCOME FUNDS
Bond Fund
U.S. Government Securities Fund
U.S. Treasury Income Fund
Short-Term Bond Fund
CHASE VISTA TAX-FREE FUNDS(1)
New York Tax Free Income Fund
California Intermediate Tax Free Fund
Tax Free Income Fund
CHASE VISTA TAX-FREE MONEY MARKET FUNDS(1,2)
New York Tax Free Money Market Fund
Connecticut Daily Tax Free Income Fund Select Shares(3)
New Jersey Daily Municipal Income Fund Select Shares(3)
Tax Free Money Market Fund
California Tax Free Money Market Fund
CHASE VISTA TAXABLE MONEY MARKET FUNDS(2)
Cash Management Money Market Fund
Federal Money Market Fund
100% U.S. Treasury Securities Money Market Fund
U.S. Government Money Market Fund
Treasury Plus Money Market Fund
CHASE VISTA RETIREMENT PRODUCTS
Vista Capital Advantage Variable Annuity(4)
Vista 401(k) Advantage
For complete information on the Chase Vista Mutual Funds or Retirement
Products, including information about fees and expenses, call your investment
professional or 1-800-34-VISTA for a prospectus. Please read it carefully
before you invest or send money.
(1) Some income may be subject to certain state and local taxes. A portion of
the income may be subject to the federal alternative minimum tax for some
investors.
(2) An investment in a Money Market Fund is neither insured nor guaranteed by
the U.S. Government. Yields will fluctuate, and there can be no assurance that
the Fund will be able to maintain a stable net asset value of $1.00 per share.
(3) Vista Select Shares of these funds are not a part of, or affiliated with,
the Chase Vista Mutual Funds. Reich & Tang Distributors L.P. and New England
Investment Companies L.P., which are unaffiliated with Chase, are the funds'
distributor and investment adviser, respectively.
(4) The variable annuity contract is issued by First SunAmerica Life Insurance
Company in New York; in other states, but not necessarily all states, it is
issued by Anchor National Life Insurance Company.
27
<PAGE>
CHASE 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 FUNDS LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VCI-1-398X
<PAGE>
CHASE 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 FUNDS LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392
VCI-1-398
<PAGE>
[Chase Vista Funds Logo]
PREMIER(SM) SHARES
PROSPECTUS
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 FUND
PRIME MONEY MARKET FUND
TAX FREE MONEY MARKET FUND
---------------------------------------
INVESTMENT STRATEGY: CURRENT INCOME
---------------------------------------
December 29, 1997, As revised March 13, 1998.
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 Chase 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
<TABLE>
<S> <C>
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
100% U.S. Treasury Securities Money Market Fund ............................ 18
Treasury Plus Money Market Fund ............................................ 18
Federal Money Market Fund .................................................. 18
U.S. Government Money Market Fund .......................................... 19
Cash Management Fund ....................................................... 19
Prime Money Market Fund .................................................... 19
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
</TABLE>
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>
100%
U.S. Treasury
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>
U.S.
Federal Government
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 0.05%**#
Shareholder Servicing Fee
(after estimated waiver of fee, where indicated) ........................ 0.24%** 0.15%**#
Other Expenses (after estimated waiver of fee,
where indicated) ........................................................ 0.16% 0.15%
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>
Cash Prime Tax Free
Management Money Market Money Market
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 n/a n/a
Shareholder Servicing Fee
(after estimated waiver of fee, where indicated) ........................ 0.18%**# 0.18%** 0.25%
Other Expenses (after estimated waiver of fee,
where indicated) ........................................................ 0.17% 0.17% 0.18%
Total Fund Operating Expenses
(after waivers of fees, where indicated) ................................ 0.45%**# 0.45%** 0.53%
EXAMPLES
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 year ................................................................... $ 5 $ 5 $ 5
3 years .................................................................. 14 14 17
5 years .................................................................. 25 25 30
10 years ................................................................. 57 57 66
</TABLE>
* Long-term shareholders in mutual funds with 12b-1 fees, such as
holders of Premier Shares of 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 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 100% U.S. Treasury
Securities Money Market Fund and Treasury Plus Money Market Fund,
respectively, and Total Fund Operating Expenses for 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
Fund and 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.
4 & 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.
100% U.S. TREASURY SECURITIES MONEY MARKET FUND
Year 6/3/96*
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 .................................. 0.048 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%
* 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.
TREASURY PLUS MONEY MARKET FUND
<TABLE>
<CAPTION>
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
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.
FEDERAL MONEY MARKET FUND
<TABLE>
<CAPTION>
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.
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>
10 & 11
<PAGE>
U.S. GOVERNMENT MONEY MARKET FUND(1)
<TABLE>
<CAPTION>
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 portfolio 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.
12 & 13
<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.
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
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.
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.
15
<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.
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 ........................... 0.032 0.031 0.032 0.018
-------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income 0.032 0.031 0.032 0.018
-------- -------- -------- --------
Net Asset Value, End of Period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
TOTAL RETURN 3.19% 3.12% 3.29% 1.79%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) .......... $104,759 $145,221 $148,436 $229,306
Ratio of Expenses to Average Net Assets# ......... 0.53% 0.58% 0.56% 0.55%
Ratio of Net Investment Income to
Average Net Assets# ............................. 3.13% 3.08% 3.21% 2.11%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ..................................... 0.53% 0.73% 0.84% 0.78%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ............................. 3.13 2.92% 2.93% 1.89%
<CAPTION>
Year Ended 7/18/90*
-------------------------------------- through
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 .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- --------- ---------- ----------
Income from Investment Operations:
Net Investment Income ........................... 0.022 0.031 0.046 0.002
---------- --------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income 0.022 0.031 0.046 0.002
---------- --------- ---------- ----------
Net Asset Value, End of Period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========= ========== ==========
TOTAL RETURN 2.21% 3.09% 4.68% 6.82%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) .......... $ 225,791 $ 87,027 $ 19,174 $ 11,320
Ratio of Expenses to Average Net Assets# ......... 0.55% 0.55% 0.55% 0.55%
Ratio of Net Investment Income to
Average Net Assets# ............................. 2.16% 2.92% 4.39% 6.82%
Ratio of Expenses without waivers and
assumption of expenses to Average
Net Assets# ..................................... 0.79% 0.76% 0.82% 0.71%
Ratio of Net Investment Income without
waivers and assumption of expenses to
Average Net Assets# ............................. 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.
16 & 17
<PAGE>
FUND OBJECTIVES AND
INVESTMENT APPROACH
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.
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.
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>
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.
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.
PRIME 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 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
19
<PAGE>
instrumentalities; and (v) repurchase agreements. The dollar weighted average
maturity of the Fund will be 60 days or less.
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 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.
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 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 100% U.S. Treasury Securities Money Market
Fund and 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.
REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. Each Fund other than 100% U.S. Treasury Securities Money Market
Fund and 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 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
21
<PAGE>
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 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". Cash
Management Fund, Prime Money Market Fund and 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.
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 Tax Free Money Market Fund, Cash
Management Fund and Prime Money Market Fund may invest include participation
certificates and, in the case of Cash Management Fund and Prime Money Market
Fund, certificates of indebtedness or safekeeping. Participation
22
<PAGE>
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 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
Cash Management Fund and 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 motor
vehicle receivables or credit card receivables.
23
<PAGE>
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 Tax Free Money Market Fund. 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).
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,
24
<PAGE>
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.
LIMITING INVESTMENT RISKS
Specific regulations and investment restrictions help the Funds limit
investment risks for their
25
<PAGE>
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 Cash Management Fund and Prime Money Market
Fund" and "Additional Investment Policies of Tax Free Money Market Fund."
CASH MANAGEMENT FUND AND 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 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
26
<PAGE>
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.
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 Cash Management
Fund and 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.
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.
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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 Cash Management Fund and the
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 Cash Management Fund and the 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 Cash Management Fund and the 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 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
Chase Vista Funds. Third party checks, credit cards and cash
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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 Chase Vista
Service Center. Call the Chase 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 Chase 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 Chase Vista Service Center or your investment
representative or shareholder servicing agent must generally receive your order
in proper form prior to a Fund's Cut-off Time. The Funds' Cut-off Times
(Eastern time) are as follows:
100% U.S. Treasury Securities
Money Market Fund ................... Noon
Tax Free Money Market Fund .............. Noon
Federal Money Market Fund ............... 2:00 p.m.
U.S. Government Money Market
Fund ................................ 2:00 p.m.
Cash Management Fund .................... 2:00 p.m.
Prime Money Market Fund ................. 2:00 p.m.
Treasury Plus Money Market Fund ......... 4:00 p.m.
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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 Chase 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
Chase 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 additional documentation for the sale of shares
by a corporation, partnership, agent or fiduciary, or a surviving joint owner.
Contact the Chase 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 Chase Vista Service Center prior to the Fund's
Cut-off Time, and assuming the
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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 Chase 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase 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 Chase 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 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 Chase Vista
money market funds at net asset value and for certain classes of shares of the
Chase Vista non-money market funds at net asset
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value plus any applicable sales charge, subject to any minimum investment
requirement. Not all Chase Vista funds offer all classes of shares. The
prospectus of the other Chase 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 Chase Vista Service Center for procedures for telephone transactions.
Ask your investment representative or the Chase Vista Service Center for
prospectuses of other Chase Vista funds. Please read the prospectus carefully
before investing and keep it for future reference. Shares of certain Chase
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 Chase 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 Chase 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.
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
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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 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.
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
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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. 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 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 U.S. Government Money Market Fund
will be conducted generally by the Chase Vista Funds, and activities intended
to promote the Fund's Premier Shares may also benefit the Fund's other shares
and other Chase Vista funds.
VFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Chase 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 Premier Shares of
each Fund held by investors for whom the shareholder servicing agent maintains
a servicing relationship. Shareholder
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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
Chase 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 Chase 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 Chase Vista 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 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
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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.
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
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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 slightly higher than the "yield" due to
the compounding effect of this assumed reinvestment.
The 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 Tax Free Money Market Fund can then be compared to the
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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.
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MAKE THE MOST OF YOUR CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista mutual fund
shareholder.
[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.
[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B and Class C 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 Chase
Vista account to another on a regular, prearranged basis. There is no
additional charge for this service.
[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Chase Vista funds in
the same class of shares without charge. The exchange privilege allows
you to adjust your investments as your objectives change. Investors
may not maintain, within the same fund, simultaneous plans for
systematic investment or exchange and systematic withdrawal or
exchange.
[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time
privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar
days of the redemption, accompanied by payment for the shares (not in
excess of the redemption).
Class B and Class C 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 and Class C shares.
For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
39
<PAGE>
CHASE 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 Funds Logo]
P.O. Box 419392
Kansas City, MO 64141-6392
VPMM-1-398X
<PAGE>
CHASE 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 Funds Logo]
P.O. Box 419392
Kansas City, MO 64141-6392
VPMM-1-398
<PAGE>
[CHASE VISTA FUNDS LOGO]
VISTA(SM) SHARES
PROSPECTUS
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 FUND
TAX FREE MONEY MARKET FUND
NEW YORK TAX FREE MONEY MARKET FUND
CALIFORNIA TAX FREE MONEY MARKET FUND
-----------------------------------
INVESTMENT STRATEGY: CURRENT INCOME
-----------------------------------
December 29, 1997, As revised March 13, 1998
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 Chase 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.
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.
- --------------------------------------------------------------------------------
THE 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
100% U.S. Treasury Securities Money Market Fund ............................ 20
Treasury Plus Money Market Fund ............................................ 20
Federal Money Market Fund .................................................. 20
U.S. Government Money Market Fund .......................................... 21
Cash Management Fund ....................................................... 21
Tax Free Money Market Fund ................................................. 21
New York Tax Free Money Market Fund ........................................ 22
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
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 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>
100% U.S.
Treasury Treasury U.S. New York California
Securities Plus Federal Government Tax Free Tax Free Tax Free
Money Money Money Money Cash Money Money Money
Market Market Market Market Management Market Market Market
Fund Fund Fund Fund Fund Fund Fund Fund
---------- --------- ------- --------- ---------- -------- --------- ----------
Vista Vista Vista Vista Vista Vista Vista Vista
Shares Shares Shares Shares Shares Shares Shares Shares
---------- --------- ------- --------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <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% 0.10% 0.10% 0.10% 0.10% 0.00%*#
12b-1 Fee ** (after estimated waiver
of fee, where indicated) .................. 0.08%*# 0.10% 0.10% 0.10% n/a 0.10% 0.10% 0.05%*#
Shareholder Servicing Fee (after estimated
waiver of fee, where indicated) .......... 0.30%*# 0.28%*# 0.20%* 0.23%* 0.33%* 0.22%* 0.26%* 0.10%*
Other Expenses (after estimated
waiver of fee, where indicated) ........... 0.11%*# 0.11%*# 0.30% 0.16% 0.16% 0.17% 0.13%*# 0.40%#
Total Fund Operating Expenses (after
waivers of fees, where indicated) ........ 0.59%* 0.59%* 0.70%* 0.59%* 0.59%* 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 $ 7 $ 6 $ 6 $ 6 $ 6 $ 6
3 years ..................................... 19 19 22 19 19 19 19 18
5 years ..................................... 33 33 39 33 33 33 33 31
10 years .................................... 74 74 87 74 74 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 100% U.S. Treasury Securities Money
Market Fund, Treasury Plus Money Market Fund and New York Tax Free Money
Market Fund, respectively, and Total Fund Operating Expenses for 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
Fund, Tax Free Money Market Fund, New York Tax Free Money Market Fund and
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 Treasury Plus Money Market Fund, U.S. Government
Money Market Fund, Cash Management Fund, Tax Free Money Market Fund and 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 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.
4 & 5
<PAGE>
FINANCIAL HIGHLIGHTS
On May 3, 1996, the Hanover 100% U.S Treasury Securities Money Market Fund
("Hanover 100% Treasury Fund") merged into 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 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.
100% U.S. TREASURY SECURITIES
MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
------------------------------------------------
Year 12/01/95 7/1/91*
Ended through through
8/31/97 8/31/96** 11/30/95 11/30/94 11/30/93 11/30/92 11/30/91
---------- ---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ... $ 1.00 $ 1.00 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ---------- -------- -------- --------
Income from Investment Operations:
Net Investment Income ................ 0.048 0.035 0.050 0.033 0.026 0.033 0.021
---------- ---------- ---------- ---------- -------- -------- --------
Less Distributions:
Dividends from Net Investment
Income ................................ 0.048 0.035 0.050 0.033 0.026 0.033 0.021
---------- ---------- ---------- ---------- -------- -------- --------
Net Asset Value, End of Period ......... $ 1.00 $ 1.00 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== ========== ========== ========== ======== ======== ========
TOTAL RETURN ........................... 4.87% 3.50% 5.15% 3.32% 2.62% 3.33% 2.58%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) $2,376,214 $1,671,603 $1,337,549 $1,024,125 $873,631 $383,688 $141,875
Ratio of Expenses to Average Net
Assets# .............................. 0.59% 0.60% 0.58% 0.59% 0.58% 0.55% 0.45%
Ratio of Net Investment Income to
Average Net Assets# .................. 4.74% 4.58% 4.99% 3.26% 2.58% 3.28% 5.02%
Ratio of Expenses without waivers and
assumption of expenses to
Average Net Assets# .................. 0.71% 0.68% 0.61% 0.62% 0.61% 0.67% 0.74%
Ratio of Net Investment Income
without waivers and assumption of
expenses to Average Net Assets # ..... 4.62% 4.50% 4.96% 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.
6 & 7
<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.
TREASURY PLUS MONEY MARKET FUND
Year 5/6/96*
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 .............................. 0.048 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%
* 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.
FEDERAL MONEY MARKET FUND
Year Year Year 5/9/94*
ended ended ended through
8/31/97 8/31/96 8/31/95 8/31/94
-------- -------- -------- --------
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%
* 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
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.
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 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 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.
CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
------------------------
Year 12/1/95
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 11/30/90
--------- --------- --------- -------- --------
<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.
12 & 13
<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.
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 ................................ 0.031 0.029 0.029 0.015
-------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ................. 0.031 0.029 0.029 0.015
-------- -------- -------- --------
Net Asset Value, End of Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
TOTAL RETURN ........................................... 3.12% 2.92% 2.99% 1.54%
Ratios/Supplemental Data:
Net Assets, End of Period
(000 omitted) ....................................... $565,625 $574,115 $166,915 $121,710
Ratio of Expenses to Average
Net Assets# ......................................... 0.59% 0.69% 0.86% 0.85%
Ratio of Net Investment Income
to Average Net Assets# .............................. 3.08% 2.89% 2.96% 1.82%
Ratio of Expenses without
waivers and assumption of
expenses to Average Net Assets# ..................... 0.73% 0.80% 0.94% 0.85%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net Assets# .................. 2.94% 2.78% 2.87% 1.82%
<CAPTION>
Year Ended 9/4/87*
-------------------------------------------------------------------- through
10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87
-------- -------- -------- -------- -------- -------- --------
<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 ........................ 0.019 0.028 0.043 0.054 0.056 0.045 0.007
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ......... 0.019 0.028 0.043 0.054 0.056 0.045 0.007
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ========
TOTAL RETURN ................................... 1.90% 2.79% 4.37% 5.47% 5.76% 4.61% 4.50%
Ratios/Supplemental Data:
Net Assets, End of Period
(000 omitted) ............................... $160,497 $145,241 $115,770 $112,770 $107,534 $116,260 $133,177
Ratio of Expenses to Average
Net Assets# ................................. 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Net Investment
Income to Average Net Assets# ............... 1.88% 2.70% 4.27% 5.33% 5.59% 4.47% 4.47%
Ratio of Expenses without
waivers and assumption of
expenses to Average Net Assets# ............. 0.91% 0.98% 0.99% 0.97% 1.01% 1.02% 1.18%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net Assets# .......... 1.83% 2.57% 4.13% 5.21% 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.
14 & 15
<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.
NEW YORK 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 .................................. 0.030 0.028 0.028 0.015
-------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ................. 0.030 0.028 0.028 0.015
-------- -------- -------- --------
Net Asset Value, End of Period ......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
TOTAL RETURN ........................................... 3.02% 2.85% 2.88% 1.48%
Ratios/Supplemental Data:
Net Assets, End of Period
(000 omitted) ....................................... $956,766 $890,413 $378,400 $365,669
Ratio of Expenses to Average
Net Assets# ......................................... 0.59% 0.74% 0.86% 0.85%
Ratio of Net Investment Income to
Average Net Assets# .................................. 2.97% 2.79% 2.84% 1.77%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# .................................. 0.73% 0.83% 0.95% 0.85%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net Assets# ................... 2.83% 2.70% 2.75% 1.77%
<CAPTION>
Year Ended
Year Ended 9/4/87*
-------------------------------------------------------------------- through
10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87
-------- -------- -------- -------- -------- -------- --------
<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 .......................... 0.017 0.025 0.038 0.050 0.051 0.043 0.009
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ......... 0.017 0.025 0.038 0.050 0.051 0.043 0.009
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ========
TOTAL RETURN ................................... 1.75% 2.53% 3.87% 5.02% 5.28% 4.50% 4.71%
Ratios/Supplemental Data:
Net Assets, End of Period
(000 omitted) ............................... $300,425 $285,889 $230,855 $251,897 $252,201 $230,639 $ 2,385
Ratio of Expenses to Average
Net Assets# ................................. 0.85% 0.85% 0.85% 0.83% 0.81% 0.78% 0.25%
Ratio of Net Investment Income to
Average Net Assets# ......................... 1.72% 2.48% 3.83% 4.91% 5.15% 4.26% 4.71%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ......................... 0.89% 0.92% 0.92% 0.91% 0.95% 1.10% 1.50%
Ratio of Net Investment Income
without waivers and assumption
of expenses to Average Net Assets# .......... 1.68% 2.41% 3.76% 4.83% 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.
16 & 17
<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.
CALIFORNIA TAX FREE MONEY MARKET FUND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year Year 11/1/93 Year 3/4/92*
ended ended ended through ended 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 ....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net Investment Income .................................... 0.300 0.030 0.033 0.018 0.023 0.019
------ ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income ..................... 0.300 0.030 0.033 0.018 0.023 0.019
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
TOTAL RETURN ............................................... 3.02% 3.06% 3.32% 1.82% 2.30% 2.89%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ................... $45,509 $42,819 $58,315 $64,423 $45,346 $44,643
Ratio of Expenses to Average Net Assets# .................. 0.56% 0.56% 0.48% 0.46% 0.42% 0.06%
Ratio of Net Investment Income to Average Net Assets# ..... 2.99% 3.03% 3.25% 2.17% 2.26% 2.86%
Ratio of Expenses without waivers and assumption of
expenses to Average Net Assets# .......................... 0.86% 1.02% 1.07% 0.94% 1.02% 1.23%
Ratio of Net Investment Income without waivers and
assumption of expenses to Average Net Assets# ............ 2.69% 2.57% 2.66% 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.
18 & 19
<PAGE>
FUND OBJECTIVES AND
INVESTMENT APPROACH
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.
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.
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."
20
<PAGE>
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.
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.
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.
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.
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.
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 (the
two highest short-term rating categories in the case of New York Tax Free Money
Market Fund and 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.
Tax Free Money Market Fund, New York Tax Free Money Market Fund and 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.
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.
23
<PAGE>
U.S. GOVERNMENT OBLIGATIONS. Each Fund may invest in direct obligations of the
U.S. Treasury. Each Fund other than 100% U.S. Treasury Securities Money Market
Fund and 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.
REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY COMMITMENTS.
Each Fund other than 100% U.S. Treasury Securities Money Market Fund and 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. 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
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 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". 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 Cash Management
Fund may invest include participation certificates and, in the case of 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.
OTHER MONEY MARKET FUNDS. Each Fund other than 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.
25
<PAGE>
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 CASH MANAGEMENT FUND
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.
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 motor
vehicle receivables or credit card receivables.
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.
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
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.
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
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.
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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 Cash Management Fund"
and "Additional Investment Policies of the Tax Free Funds."
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.
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.
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 Cash
Management Fund. Changes in the credit quality of banks or other financial
institutions backing these Funds' Municipal Obligations
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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 New York
Tax Free Money Market Fund and 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.
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 Tax Free Funds.
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
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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 Cash Management Fund and the
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 Cash Management Fund and the 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 Cash Management Fund and the 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
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 or shareholder servicing agent, through the Funds'
distributor by calling the Chase 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
Chase 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
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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 Chase 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 Chase Vista
Service Center.
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 Chase Vista
Service Center. Call the Chase Vista Service Center at 1-800-34-VISTA for
complete instructions.
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.
Shares are purchased without a sales load at the net asset value next
determined after the Chase 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 Chase Vista Service Center or your investment
representative or shareholder servicing agent must generally receive your order
in proper form prior to a Fund's Cut-off Time. The Funds' Cut-off Times
(Eastern time) are as follows:
100% U.S. Treasury Securities
Money Market Fund ............. Noon
Tax Free Funds .................... Noon
Federal Money Market Fund ......... 2:00 p.m.
U.S. Government Money Market
Fund .......................... 2:00 p.m.
Cash Management Fund .............. 2:00 p.m.
Treasury Plus Money Market Fund 4:00 p.m.
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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.
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
Chase Vista Service Center. The price you receive is the next net asset value
calculated after the Fund receives your request in proper form.
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 Chase 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 Chase 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 Chase Vista's Telephone Redemption Privilege
to redeem shares from your account unless you have notified the Chase 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
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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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase 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.
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 Chase 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 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 Chase Vista Service Center, and
may charge you for its services.
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 Chase Vista
money market funds at net asset value and for certain classes of shares of the
Chase Vista non-money market funds at net asset value plus any applicable sales
charge, subject to any minimum investment requirement. Not all Chase Vista
funds offer all classes of shares. The prospectus of the other Chase Vista fund
into which shares are being exchanged should be read carefully and retained for
future reference.
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EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Chase Vista Service Center for procedures for telephone transactions.
Ask your investment representative or the Chase Vista Service Center for
prospectuses of other Chase Vista funds. Please read the prospectus carefully
before investing and keep it for future reference. Shares of certain Chase
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 Chase 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 Chase 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.
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
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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 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.
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
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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 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 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 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 Chase Vista Funds, and activities intended
to promote a Fund's Vista Shares may also benefit the Fund's other shares and
other Chase Vista funds.
VFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Chase 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
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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.
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
Chase 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 Chase 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 Chase Vista 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 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.
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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 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.
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.
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
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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.
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 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.
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.
41
<PAGE>
MAKE THE MOST OF YOUR CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista mutual fund
shareholder.
o 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.
o SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more ($100 or
more for Class B and Class C accounts) monthly, quarterly or semiannually. A
minimum account balance of $5,000 is required to establish a systematic
withdrawal plan for Class A accounts.
o SYSTEMATIC EXCHANGE--Transfer assets automatically from one Chase Vista
account to another on a regular, prearranged basis. There is no additional
charge for this service.
o FREE EXCHANGE PRIVILEGE--Exchange money between Chase 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.
o 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 and Class C 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 and Class C
shares.
For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
42
<PAGE>
Chase Vista Mutual Funds & Retirement Products
CHASE VISTA INTERNATIONAL EQUITY FUNDS
Latin American Equity Fund
Southeast Asian Fund
Japan Fund
European Fund
International Equity Fund
CHASE VISTA U.S. EQUITY FUNDS
Small Cap Opportunities Fund
Small Cap Equity Fund (closed to new investors)
The Growth Fund of Washington
Capital Growth Fund
Growth and Income Fund
Large Cap Equity Fund
Equity Income Fund
Balanced Fund
CHASE VISTA FIXED INCOME FUNDS
Bond Fund
U.S. Government Securities Fund
U.S. Treasury Income Fund
Short-Term Bond Fund
CHASE VISTA TAX-FREE FUNDS(1)
New York Tax Free Income Fund
California Intermediate Tax Free Fund
Tax Free Income Fund
CHASE VISTA TAX-FREE MONEY MARKET FUNDS(1,2)
New York Tax Free Money Market Fund
Connecticut Daily Tax Free Income Fund Select Shares3
New Jersey Daily Municipal Income Fund Select Shares3
Tax Free Money Market Fund
California Tax Free Money Market Fund
CHASE VISTA TAXABLE MONEY MARKET FUNDS(2)
Cash Management Money Market Fund
Federal Money Market Fund
100% U.S. Treasury Securities Money Market Fund
U.S. Government Money Market Fund
Treasury Plus Money Market Fund
CHASE VISTA RETIREMENT PRODUCTS
Vista Capital Advantage Variable Annuity(4)
Vista 401(k) Advantage
For complete information on the Chase Vista Mutual Funds or Retirement
Products, including information about fees and expenses, call your investment
professional or 1-800-34-VISTA for a prospectus. Please read it carefully
before you invest or send money.
(1) Some income may be subject to certain state and local taxes. A portion of
the income may be subject to the federal alternative minimum tax for some
investors.
(2) An investment in a Money Market Fund is neither insured nor guaranteed by
the U.S. Government. Yields will fluctuate, and there can be no assurance that
the Fund will be able to maintain a stable net asset value of $1.00 per share.
(3) Vista Select Shares of these funds are not a part of, or affiliated with,
the Chase Vista Mutual Funds. Reich & Tang Distributors L.P. and New England
Investment Companies L.P., which are unaffiliated with Chase, are the funds'
distributor and investment adviser, respectively.
(4) The variable annuity contract is issued by First SunAmerica Life Insurance
Company in New York; in other states, but not necessarily all states, it is
issued by Anchor National Life Insurance Company.
43
<PAGE>
CHASE 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 FUNDS]
P.O. Box 419392
Kansas City, MO 64141-6392
VMM-1-398C
<PAGE>
CHASE 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 FUNDS]
P.O. Box 419392
Kansas City, MO 64141-6392
VMM-1-398X
<PAGE>
CHASE 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 FUNDS]
P.O. Box 419392
Kansas City, MO 64141-6392
VMM-1-398
<PAGE>
[LOGO OF CHASE VISTA FUNDS]
CHASE VISTA FUNDS
PROSPECTUS
TAX FREE INCOME FUND
CLASS A AND B SHARES
INVESTMENT STRATEGY: INCOME
December 29, 1997, As revised March 13, 1998
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 Chase 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Investments in the Fund are not bank deposits or obligations of, or guaranteed
or endorsed by, The Chase Manhattan Bank or any of its affiliates and are not
insured by the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.
<PAGE>
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 Chase 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%
======== ========
<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>
* The maximum deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge generally
declines by 1% annually thereafter (except in the fourth year),
reaching zero after six years. See "How to Buy, Sell and Exchange
Shares."
** Reflects current 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.
*** 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.
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".
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
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 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.
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>
Class A
----------------------------------------------------------------------
Year 9/4/87*
ended to
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87
----------- -------- -------- -------- --------- --------
<S> <C> <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 $ 10.00
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income ............................ 0.731 0.727 0.723 0.756 0.738 0.059
Net Gains or Losses in Securities
(both realized and unrealized) ................... 0.556 0.693 (0.094) 0.006 0.603 0.021
------- ------- ------- ------- ------ -------
Total from Investment Operations .................. 1.287 1.420 0.629 0.762 1.341 0.080
------- ------- ------- ------- ------ -------
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 $ 10.08
======= ======= ======= ======= ======= =======
Total Return(1) ..................................... 11.99% 13.98% 6.18% 7.48% 13.83% 5.41%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............ $17,548 $ 5,425 $ 3,973 $ 3,196 $ 1,197 101%
Ratio of Expenses to Average Net Assets# ........... 0.00% 0.04% 0.12% 0.00% 0.00 $ 0.00%%
Ratio of Net Income to Average Net Assets# ......... 6.26% 6.71% 6.86% 7.06% 7.50 7.35%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ............................... 2.34% 4.04% 2.50% 2.50% 2.00 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 5.35%
Portfolio Turnover Rate ............................. 266% 211% 89% 257% 422% 94%%
<CAPTION>
Class B
-------------------------------------------------
Year Year Year 11/4/93**
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 ................ $ 11.76 $ 11.77 $ 11.65 $ 12.51
------- ------- -------- --------
Income from Investment Operations:
Net Investment Income ............................ 0.484 0.486 0.498 0.423
Net Gains or Losses in Securities
(both realized and unrealized) ................... 0.478 (0.006) 0.140 (0.707)
------- ------- -------- --------
Total from Investment Operations .................. 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 ...................... $ 12.25 $ 11.76 $ 11.77 11.65
------- ------- -------- --------
Total Return(1) ..................................... 8.30% 4.10% 5.70% (2.35%)
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted) ............ $13,610 $ 14,329 $ 14,265 $ 11,652
Ratio of Expenses to Average Net Assets# ........... 1.64% 1.65% 1.61% 1.47%
Ratio of Net Income to Average Net Assets# ......... 4.04% 4.08% 4.31% 3.95%
Ratio of Expenses without waivers
and assumption of expenses to
Average Net Assets# ............................... 1.79% 1.95% 1.97% 1.81%
Ratio of Net Investments Income without
waivers and assumption of expenses to
Average Net Assets# ............................... 3.89% 3.78% 3.95% 3.61%
Portfolio Turnover Rate ............................. 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.
6 & 7
<PAGE>
FUND OBJECTIVES
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.
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.
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.
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.
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.
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
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.
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 Fund is delayed or
prevented from
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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 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
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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 securities 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 exceed the original investment of
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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 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.
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 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
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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.
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.
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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 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
CHOOSING A SHARE CLASS
CLASS A SHARES. An investor who purchases Class A shares pays a sales charge at
the time of purchase. As a result, Class A shares are not subject to any sales
charges when they are redeemed. Certain purchases of Class A shares qualify for
reduced sales charges. Class A shares have lower combined 12b-1 and service fees
than Class B shares. See "How to Buy, Sell and Exchange Shares" and "Other
Information Concerning the Fund."
CLASS B SHARES. Class B shares are sold without an initial sales charge, but are
subject to a contingent deferred sales charge ("CDSC") if redeemed within a
specified period after purchase. Class B shares also have higher combined 12b-1
and service fees than Class A shares.
Class B shares automatically convert into Class A shares, based on relative net
asset value, at the beginning of the ninth year after purchase. For more
information about the conversion of Class B shares, see the SAI. This discussion
will include information about how shares acquired through reinvestment of
distributions are treated for conversion purposes. Class B shares
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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
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 Chase 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
Chase 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 Chase 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 Chase Vista Service
Center. Call the Chase Vista Service Center at 1-800-34-VISTA for complete
instructions.
Shares are purchased at the public offering price, which is based on the
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net asset value next determined after the Chase Vista Service Center receives
your order in proper form. In most cases, in order to receive that day's public
offering price, the Chase 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.
If you are considering redeeming or exchanging shares or transferring shares to
another person shortly after purchase, you should pay for those shares with a
certified check to avoid any delay in redemption, exchange or transfer.
Otherwise the Fund may delay payment until the purchase price of those shares
has been collected or, if you redeem by telephone, until 15 calendar days after
the purchase date. To eliminate the need for safekeeping, the Fund will not
issue certificates for your Class A shares unless you request them. Due to the
conversion feature of Class B shares, certificates for Class B shares will not
be issued and all Class B shares will be held in book entry form.
Class A Shares
The public offering price of Class A shares is the net asset value plus a sales
charge that varies depending on the size of your purchase. The Fund receives the
net asset value. The sales charge is allocated between your broker-dealer and
the Fund's distributor as shown in the following table, except when the Fund's
distributor, in its discretion, allocates the entire amount to your
broker-dealer.
Amount of
Sales charge as a sales charge
percentage of: reallowed to
----------------------------- dealers as a
mount of transaction at Offering Net amount percentage of
offering price ($) Price invested offering price
- --------------------------------------------------------------------------------
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
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.
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Class B Shares
Class B shares are sold without an initial sales charge, although a CDSC will be
imposed if you redeem shares within a specified period after purchase, as shown
in the table below. The following types of shares may be redeemed without charge
at any time: (i) shares acquired by reinvestment of distributions and (ii)
shares otherwise exempt from the CDSC, as described below. For other shares, the
amount of the charge is determined as a percentage of the lesser of the current
market value or the purchase price of shares being redeemed.
Year 1 2 3 4 5 6 7 8+
- ------ ---- ---- ---- ---- ---- ---- ---- ---
CDSC 5% 4% 3% 3% 2% 1% 0% 0%
In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during the
CDSC period. When a share that has appreciated in value is redeemed during the
CDSC period, a CDSC is assessed only on its initial purchase price. For
information on how sales charges are calculated if you exchange your shares, see
"How to Exchange Your Shares." The Fund's distributor pays broker-dealers a
commission of 4.00% of the offering price on sales of Class B shares, and the
distributor receives the entire amount of any CDSC you pay.
GENERAL
You may be eligible to buy Class A shares at reduced sales charges.
Consult your investment representative or the Chase Vista Service Center for
details about Chase 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 Funds' Class A shares made from January 1, 1998
through April 30, 1998, no initial sales charge will be assessed if you are
opening or adding to a Vista prototype IRA by transferring or rolling over
$5,000 or more of assets from a qualified plan, consisting of redemption
proceeds from non-Chase Vista mutual funds on which you paid a front-end or
deferred sales load. In connection with such purchases of Class A shares, the
Funds' distributor will pay broker-dealers a 1% commission. If you open or add
to a Vista prototype IRA, from January 1, 1998 through April 30, 1998, by
investing $5,000 or more, the annual IRA maintenance fee payable to the IRA
sponsor will be waived for the life of the account. In addition, sales charges
are waived if you are using redemption proceeds received within the prior ninety
days from non-Chase 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 Chase Vista and non-Chase Vista mutual funds. With
Board of Trustee approval, the money that is invested in Chase 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
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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 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 Chase Vista Fund shares), financial institution trust departments investing
an aggregate of $1 million or more in the Chase Vista Funds and clients of
certain administrators of tax-qualified plans when proceeds from repayments of
loans to participants are invested (or reinvested) in the Chase Vista 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 or other qualified plan 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 Chase Vista 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.
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
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Fund, the Fund's distributor or the Chase Vista Service Center.
Shareholders of record of any Chase Vista Fund as of November 30, 1990 and
certain immediate family members may purchase the Fund's Class A shares with no
initial sales charge for as long as they continue to own Class A shares of any
Chase Vista Fund, provided there is no change in account registration.
The Fund may sell Class A shares at net asset value without an initial sales
charge in connection with the acquisition by the Fund of assets of an investment
company or personal holding company. The CDSC will be waived on redemption of
Class B shares arising out of death or disability or in connection with certain
withdrawals from IRA or other retirement plans. Up to 12% of the value of Class
B shares subject to a systematic withdrawal plan may also be redeemed each year
without a CDSC, provided that the Class B account had a minimum balance of
$20,000 with respect to the applicable Fund at the time the systematic
withdrawal plan was established. The SAI contains additional information about
purchasing the Fund's shares at reduced sales charges.
The Fund reserves the right to change any of these policies on purchases without
an initial sales charge at any time and may reject any such purchase request.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase 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 Chase Vista Funds.
Shareholders of other Chase 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
Chase 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 Chase 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
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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 Chase 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 Chase 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 Chase 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase 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
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A accounts. Call the Chase 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 Chase 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 Chase Vista funds at net asset value beginning 15 days
after purchase. Not all Chase Vista funds offer all classes of shares. The
prospectus of the other Chase 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 Chase
Vista money market funds (other than the Class B shares of the 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 Chase
Vista non-money market fund may be exchanged into the Class B shares of the
Prime Money Market Fund in order to continue the aging of the initial purchase
of such shares.
For federal income tax purposes, an exchange is treated as a sale of shares and
generally results in a capital gain or loss.
EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available. Call
the Chase 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
Chase Vista Service Center for prospectuses of
22
<PAGE>
other Chase Vista Funds. Shares of certain Chase 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 Chase 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 Chase 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 from three distribution options: (1)
23
<PAGE>
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 Chase
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 Chase 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 Chase Vista Fund. If the Chase Vista Service
Center does not receive your election, the distribution will be reinvested in
the Fund. Similarly, if the Fund or the Chase 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. 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
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.
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
24
<PAGE>
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 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 Chase Vista 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 Chase Vista Funds.
VFD may provide promotional incentives to broker-dealers that meet specified
targets for one or more Chase 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
reimbursements for travel expenses, including loding 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 Chase 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.
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 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.
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 shareholers, since it will be
paid by Chase and/or VFD.
Chase and its affiliates and the Chase Vista 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 act as the Fund's administrator and is entitled to receive a fee computed
daily and paid monthly at an annual rate
26
<PAGE>
equal to 0.10% of the Fund's average daily net assets.
VFD provides certain sub-administrative services to the Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay for
certain expenses incurred in connection with organizing new series of the Trust
and certain other ongoing expenses of the Trust. VFD is located at 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 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
27
<PAGE>
generally vote together except when required under federal securities laws to
vote separately on matters that only affect a particular class, such as the
approval of distribution plans for a particular class.
The Fund issues multiple classes of shares. This Prospectus relates to Class A
and Class B shares of the Fund. The Fund may offer other classes of shares in
addition to these classes and may determine not to offer certain classes of
shares. The categories of investors that are eligible to purchase shares and
minimum investment requirements may differ for each class of the Fund's shares.
In addition, other classes of Fund shares may be subject to differences in sales
charge arrangements, ongoing distribution and service fee levels, and levels of
certain other expenses, which would affect the relative performance of the
different classes. Investors may call 1-800-34-VISTA to obtain additional
information about other classes of shares of the Fund that are offered. Any
person entitled to receive compensation for selling or servicing shares of the
Fund may receive different levels of compensation with respect to one class of
shares over another.
The business and affairs of the Trust are managed under the general direction
and supervision of 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.
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
28
<PAGE>
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 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, 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
29
<PAGE>
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 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 CHASE VISTA PRIVILEGES
The following services are available to you as a Chase Vista Fund shareholder.
[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.
[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B accounts) monthly, quarterly or semiannually.
A minimum account balance of $5,000 is required to establish a
systematic withdrawal plan for Class A accounts.
[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Chase Vista
account to another on a regular, prearranged basis. There is no
additional charge for this service.
[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Chase Vista Funds in
the same class of shares without charge. The exchange privilege allows
you to adjust your investments as your objectives change. Investors may
not maintain, within the same fund, simultaneous plans for systematic
investment or exchange and systematic withdrawal or exchange.
[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time privilege
of reinstating their investment in the Fund at net asset value next
determined subject to written request within 90 calendar days of the
redemption, accompanied by payment for the shares (not in excess of the
redemption).
Class B shareholders who have redeemed their shares and paid a CDSC with such
redemption may purchase Class A shares with no initial sales charge (in an
amount not in excess of their redemption proceeds) if the purchase occurs
within 90 days of the redemption of the Class B shares.
For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Chase Vista
Service Center at 1-800-34-VISTA. These privileges are subject to change or
termination.
31
<PAGE>
CHASE 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
[LOGO OF CHASE VISTA]
P.O. Box 419392
Kansas City, MO 64141-6392
VTFI-1-398X
<PAGE>
CHASE 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
[LOGO OF CHASE VISTA]
P.O. Box 419392
Kansas City, MO 64141-6392
VTFI-1-398
<PAGE>
LIPPER MUTUAL FUNDS
Mutual Fund Investments
offered through
Lipper & Company, L.P.
U.S. GOVERNMENT
MONEY MARKET FUND
VISTA SHARES
Prospectus Enclosed
For a new account application refer to
The Lipper Funds, Inc. Prospectus
<PAGE>
December 29, 1997, As revised March 13, 1998
PROSPECTUS
CHASE VISTA(SM) U.S. GOVERNMENT MONEY MARKET FUND
VistaSM 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
INVESTMENTS IN THE FUND ARE 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>
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.
<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 investment of $1,000 would incur the following expenses, assuming 5%
annual return:
<TABLE>
<S> <C>
1 year ........... $ 6
3 years .......... 19
5 years .......... 33
10 years ......... 74
</TABLE>
- -------------
* 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.
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.
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: 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.
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.
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.
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.
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.
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).
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 Chase Vista Funds, and activities intended to promote the
Fund's Vista Shares may also benefit the Fund's other shares and other Chase
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.
For shareholders that bank with Chase, Chase may aggregate investments in
the Chase 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
14
<PAGE>
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
Chase 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 Chase Vista 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.
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.
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.
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.
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.
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.
17
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
(This Page Intentionally Left Blank)
<PAGE>
Dealer and Shareholder Servicing Agent
Lipper & Company, L.P.
101 Park Avenue, 6th Floor
New York, NY 10178
212-883-6333
Shareholder Processing Agent
Chase Global Funds Services Company
73 Tremont Street, 9th Floor
Boston, MA 02108
1-800-LIPPER9
Investment Adviser
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Distributor
Vista Fund Distributors, Inc.
1 Chase Manhattan Plaza, 3rd Floor
New York, NY 10081
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information and,
if given or made, such information and representations must not be relied
upon as having been authorized by the Fund, The Lipper Funds, Inc., Lipper &
Company, L.P. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any state to any person to whom it is unlawful to make such
an offer in such state.
<PAGE>
[front cover]
Gintel
Federal Money Market Fund
Cash Management Fund
Chase Vista Funds Investments offered
through the Gintel Group
Prospectus Enclosed
Gintel & Co.
6 Greenwich Office Park
Greenwich, CT 06831
203-622-6400
Chase Global Funds Services Co.
P.O. Box 2798
Boston, MA 02208-2798
800-344-3092
<PAGE>
[logo]
CHASE VISTA FUNDS
PROSPECTUS
FEDERAL MONEY MARKET FUND
CASH MANAGEMENT FUND
VISTA(SM) SHARES
---------------------------------------
| INVESTMENT STRATEGY: CURRENT INCOME |
---------------------------------------
December 29, 1997, As revised March 13, 1998
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.
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>
TABLE OF CONTENTS
<TABLE>
<S> <C>
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
Federal Money Market Fund ........................................ 6
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
</TABLE>
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.
<TABLE>
Federal 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 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 Federal Money Market Fund
and 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 Cash Management Fund from exceeding 0.72%
of average net assets during such period.
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 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>
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 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 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
<TABLE>
<CAPTION>
Year 12/1/95
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 .................. 0.050 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%
<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
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 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."
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.
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.
6
<PAGE>
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 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.
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.
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 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. 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 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". 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.
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
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 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.
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 CASH MANAGEMENT FUND
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.
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 motor
vehicle receivables or credit card receivables.
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
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<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.
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.
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.
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
10
<PAGE>
a discussion of certain other risks associated with the Funds' additional
investment activities, see "Other Investment Practices" and "Additional
Investment Policies of Cash Management Fund."
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.
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.
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 the Federal Money
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<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 the Federal Money Market 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 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 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.
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<PAGE>
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: [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.
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<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 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.
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 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.
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:
<TABLE>
<S> <C>
Federal
Money Market Fund ......... 2:00 p.m.
Cash
Management Fund ........... 2:00 p.m.
</TABLE>
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
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<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 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. 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.
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
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<PAGE>
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 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 59-1/2 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.
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.
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.
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.
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. 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.
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<PAGE>
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 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 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 Chase Vista Funds, and activities intended to promote a Fund's
Vista Shares may also benefit the Fund's other shares and other Chase Vista
funds.
VFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Chase 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
servicingagents 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
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<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.
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
Chase 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 Chase 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 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.
Chase and its affiliates and the Chase Vista 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 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.
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<PAGE>
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 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.
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.
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.
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
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.
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 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 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.
23
<PAGE>
CHASE 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
[LOGO]
CHASE VISTA FUNDS
P.O. Box 419392
Kansas City, MO 64141-6392
<PAGE>
Federal Money Market Fund
Cash Management Fund
Investment Advisor
Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Dealer and Shareholder Servicing Agent
Gintel & Co.
Shareholder Processing Agent
Chase Global Funds Services Company
Mutual Fund offered through Gintel & Co.
Gintel Fund
(managed by Gintel Asset Management, Inc.)
Federal Money Market Fund
Cash Management Fund
U.S. Treasury Income Fund
Tax Free Income Fund
(portfolios of Chase Vista Funds)
<PAGE>
[Logo of Chase Vista Funds]
INSTITUTIONAL(SM) SHARES
PROSPECTUS
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 FUND
PRIME MONEY MARKET FUND
TAX FREE MONEY MARKET FUND
INVESTMENT STRATEGY: CURRENT INCOME
December 29, 1997, As revised March 13, 1998
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 Chase 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>
2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
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
100% U.S. Treasury Securities Money Market Fund ............................ 13
Treasury Plus Money Market Fund ............................................ 13
Federal Money Market Fund .................................................. 13
U.S. Government Money Market Fund .......................................... 14
Cash Management Fund ....................................................... 14
Prime Money Market Fund .................................................... 14
Tax Free Money Market Fund ................................................. 15
Common Investment Policies .................................................. 15
Management .................................................................. 22
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 ..................................................... 30
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 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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
100%
U.S. Treasury
Securities Treasury Plus
Money Money
Market Market
Fund Fund
-------------- -------------
Institutional Institutional
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 ........................................... n/a n/a
Shareholder Servicing Fee ........................... n/a n/a
Other Expenses (after estimated waiver of fees, where
indicated) ......................................... 0.11%*# 0.10%*#
Total Fund Operating Expenses (after waivers of fees,
where indicated) ................................... 0.21%*# 0.20%*#
EXAMPLES
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 year .............................................. $ 2 $ 2
3 years ............................................. 7 6
5 years ............................................. 12 11
10 years ............................................ 27 26
</TABLE>
<TABLE>
<CAPTION>
Federal Government Cash Prime Tax Free
Money Money Manage- Money Money
Market Market ment Market Market
Fund Fund Fund Fund Fund
------------- ------------- ------------- ------------- --------------
Institutional Institutional Institutional Institutional Institutional
Shares Shares Shares Shares Shares
------------- ------------- ------------- ------------- --------------
<S> <C> <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% 0.10%
12b-1 Fee ........................................... n/a n/a n/a n/a n/a
Shareholder Servicing Fee ........................... n/a n/a n/a n/a n/a
Other Expenses (after estimated waiver of fees, where
indicated) ......................................... 0.17% 0.14% 0.14% 0.15% 0.16%
Total Fund Operating Expenses (after waivers of fees,
where indicated) ................................... 0.27% 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 .............................................. $ 3 $ 2 $ 2 $ 3 $ 3
3 years ............................................. 9 8 8 8 8
5 years ............................................. 15 14 14 14 15
10 years ............................................ 34 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 100% U.S.
Treasury Securities Money Market Fund and Treasury Plus Money Market
Fund, respectively, and Total Fund Operating Expenses would be 0.26%
and 0.25% for 100% U.S. Treasury Securities Money Market Fund and
Treasury Plus Money Market Fund, respectively.
# Restated from most recent fiscal year to reflect current waiver
arrangements.
4 & 5
<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.
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.
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.
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.
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.
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.
PRIME MONEY MARKET FUND
<TABLE>
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.
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
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.
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.
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."
13
<PAGE>
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.
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.
PRIME 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 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
14
<PAGE>
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.
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 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.
Although each Fund seeks to be fully invested, at times it may hold
15
<PAGE>
uninvested cash reserves, which would adversely affect its yield.
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 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 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. Each Fund may invest in direct obligations of the
U.S. Treasury. Each Fund other than 100% U.S. Treasury Securities Money Market
Fund and 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.
REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. Each Fund other than 100% U.S. Treasury Securities Money Market
Fund and 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 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 consequently reduce the available
yield. Each of these transactions
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<PAGE>
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 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". Cash
Management Fund, Prime Money Market Fund and 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.
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 Tax Free Money Market Fund, Cash
Management Fund and Prime Money Market Fund may invest include participation
certificates and, in the case of Cash Management Fund and Prime Money Market
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
17
<PAGE>
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 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 CASH MANAGEMENT
FUND AND PRIME MONEY
MARKET FUND
Cash Management Fund and 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 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
18
<PAGE>
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 TAX FREE MONEY
MARKET FUND
The following provides additional information regarding the permitted
investments of Tax Free Money Market Fund. 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).
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
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.
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.
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 Money Market Fund or to U.S.
Government Obligations held by
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<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 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 Cash Management Fund and Prime Money Market
Fund" and "Additional Investment Policies of Tax Free Money Market Fund."
CASH MANAGEMENT FUND AND 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 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
21
<PAGE>
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.
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 Cash Management
Fund and 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.
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.
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.
MANAGEMENT
THE FUNDS' ADVISERS
The Chase Manhattan Bank ("Chase") acts as investment adviser to each of the
Funds under an Investment Advisory Agreement
22
<PAGE>
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 Cash Management Fund and the
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 Cash Management Fund and the 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 Cash Management Fund and the 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
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 exercises investment authority over such accounts.
Institutional Shares are sold without a sales load at the net asset value next
determined after the Chase Vista Service Center receives your order in proper
form on any Fund
23
<PAGE>
Business Day. To receive that day's dividend, the Chase 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:
<TABLE>
<S> <C>
100% U.S. Treasury Securities
Money Market Fund .............. Noon
Tax Free Money Market Fund ......... Noon
Federal Money Market Fund .......... 2:00 p.m.
U.S. Government Money Market
Fund ........................... 2:00 p.m.
Cash Management Fund ............... 2:00 p.m.
Prime Money Market Fund ............ 2:00 p.m.
Treasury Plus Money Market
Fund ........................... 4:00 p.m.
</TABLE>
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 Chase 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.
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
24
<PAGE>
the Chase Vista Service Center. A wire redemption may be requested by telephone
to the Chase Vista Service Center. For telephone redemptions, call the Chase
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 Chase Vista's Telephone Redemption Privilege
to redeem shares from your account unless you have notified the Chase 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 Chase 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 Chase Vista Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase Vista Service Center by telephone. In
this event, you may wish to submit a written 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
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responsible for furnishing all necessary documentation to the Chase 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 Chase Vista money market funds at net asset value and
for certain classes of shares of the Chase Vista non-money market funds at net
asset value plus any applicable sales charge, subject to any minimum investment
requirement. Not all Chase Vista funds offer all classes of shares. The
prospectus of the other Chase 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 Chase Vista Service Center for procedures for telephone transactions.
Ask your investment representative or the Chase Vista Service Center for
prospectuses of other Chase Vista Funds. Please read the prospectus carefully
before investing and keep it for future reference. Shares of certain Chase
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 Chase 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 Chase 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 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.
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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.
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 Tax Free Money Market Fund of
its tax-exempt interest income will not
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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.
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 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.
For shareholders that bank with Chase, Chase may aggregate investments in the
Chase 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 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 Chase Vista Funds.
Chase and/or VFD may from time to time, at their own expense out of
compensation retained by them
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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 Chase Vista 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.
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.
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
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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.
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
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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.
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 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.
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CHASE 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
[Logo of Chase Vista Funds]
P.O. Box 419392
Kansas City, MO 64141-6392
VINS-1-398X
<PAGE>
CHASE 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
[Logo of Chase Vista Funds]
P.O. Box 419392
Kansas City, MO 64141-6392
VINS-1-398
