Chase Manhattan Corp. has moved its overseas mutual fund operations to Europe to expand investment sales abroad.

Chase's Vista Capital Management unit shifted its offshore Chase Manhattan Vista Funds from the Bahamas to Luxembourg on Monday.

The move will allow Chase to register its 12 mutual fund portfolios in the European Union.

"In Europe you can't even have a brochure out on the table unless the fund is registered there," said William A. Semmes, the Chase vice president in charge of overseas funds, in a recent interview. "Now we'll be able to sell our funds directly to the public."

For Chase, Europe represents a largely untapped retail market for its array of mutual funds.

"One out of three households in the U.S. has some kind of mutual fund investment," Mr. Semmes said. "But in the United Kingdom that number is one in 10, and it increases even more the further out you go into Europe and Asia."

As of the end of September, Chase had nearly $1.2 billion in offshore mutual funds, the company said. The total includes more than $600 million in the Chase Vista Managed Dollar Fund, an institutional money fund that will remain in Dublin.

Offshore funds are by law not available to American investors because they do not follow this country's tax and operating laws.

Mr. Semmes said the funds will be sold primarily through its Chase bank branches overseas. But one official at the banking company said a grander plan to sell the funds worldwide through brokerage firms and other outlets is in the works.

Todd Mauerman, international sales manager for the Vista offshore funds, said Chase wants to copy the success it has had selling its domestic shares of the Vista Funds. Some industry insiders estimate is nearly 75% of all Vista sales in the United States come from outside the bank channel.

Mr. Mauerman would not discuss the details, but said that the company will be hiring more wholesale representatives to hawk the funds. Chase's Mr. Semmes said the company has five dedicated sales representatives, and there are plans to double that number next year.

Offshore funds continue to be popular with investors. As of the first quarter, nearly $382 billion was invested in them - more than 20% higher than yearend 1992, according to Lipper Analytical Services, Summit, N.J.

As of the end of June, the 24 U.S.-based fund companies actively in the business managed about $32 billion in overseas mutual funds, 12% higher than the same period a year ago, according to Lipper Analytical.

The American firm with the large offshore presence is Fidelity Investments, with net mutual fund assets of $6.9 billion. Quantum Capital Management is ranked second with $6.3 billion of assets. Merrill Lynch & Co. comes in a distant third with $3.9 billion in overseas mutual fund assets.

Chase ranked ninth on the list with $542.9 million of assets, before it launched the Dublin-based Managed Dollar Fund.

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