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MARCH 1, 2001 | PROSPECTUS
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J.P. MORGAN INTERNATIONAL EQUITY FUNDS
International Equity Fund
European Equity Fund
International Opportunities Fund
Emerging Markets Equity Fund
----------------------------------------
Seeking high total return primarily from
stocks outside the United States
This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.
As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense to state or suggest otherwise.
Distributed by Funds Distributor, Inc. JPMorgan
CONTENTS
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2 | J.P. MORGAN INTERNATIONAL EQUITY FUNDS
Each fund's goal, principal strategies,
principal risks, performance
and expenses
J.P. Morgan International Equity Fund .............................2
J.P. Morgan European Equity Fund ..................................4
J.P. Morgan International Opportunities Fund ......................6
J.P. Morgan Emerging Markets Equity Fund ..........................8
10 | INTERNATIONAL EQUITY MANAGEMENT APPROACH
Principles and techniques common
to the funds in this prospectus
J.P. Morgan ......................................................10
J.P. Morgan international equity funds ...........................10
The spectrum of international equity funds .......................10
Who may want to invest ...........................................10
International equity investment process ..........................11
12 | YOUR INVESTMENT
Investing in the J.P. Morgan
International Equity Funds
Investing through a financial professional .......................12
Investing through an employer-sponsored retirement plan ..........12
Investing through an IRA or rollover IRA .........................12
Investing directly ...............................................12
Opening your account .............................................12
Adding to your account ...........................................12
Selling shares ...................................................13
Account and transaction policies .................................13
Dividends and distributions ......................................14
Tax considerations ...............................................14
15 | FUND DETAILS
More about risk and the funds'
business operations
Master/Feeder structure ..........................................15
Management and administration ....................................15
Risk and reward elements .........................................16
Financial highlights .............................................18
FOR MORE INFORMATION .....................................back cover
J.P. MORGAN INTERNATIONAL
EQUITY FUND TICKER SYMBOL: PPIEX
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REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN INTERNATIONAL EQUITY FUND)
RISK/RETURN SUMMARY
[GRAPHIC] For a more detailed discussion of the fund's investments and their
main risks, as well as fund strategies, please see pages 16-17.
[GRAPHIC] GOAL
The fund's goal is to provide high total return from a portfolio of
foreign company equity securities. This goal can be changed without shareholder
approval.
INVESTMENT APPROACH
[GRAPHIC] Principal Strategies
The fund invests primarily in equity securities from developed countries
included in the Morgan Stanley Capital International Europe, Australasia, and
Far East Index (EAFE), which is the fund's benchmark. The fund typically does
not invest in U.S. companies.
The fund's industry weightings generally approximate those of the EAFE Index,
although it does not seek to mirror the index in its choice of individual
securities, and may overweight or underweight countries relative to the EAFE
Index. In choosing stocks, the fund emphasizes those that are ranked as
undervalued according to J.P. Morgan's proprietary research, while
underweighting or avoiding those that appear overvalued. The fund makes its
currency management decisions as described on pages 11 and 16.
Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in international stock markets and currency exchange rates. Fund performance
will also depend on the effectiveness of J.P. Morgan's research and the
management team's stock picking and currency management decisions.
In general, international investing involves higher risks than investing in U.S.
markets but offers attractive opportunities for diversification. Foreign markets
tend to be more volatile than those of the U.S., and changes in currency
exchange rates could reduce market performance. To the extent that the fund
hedges its currency exposure into the U.S. dollar, it may reduce the effects of
currency fluctuations. The fund may also hedge from one foreign currency to
another. Foreign stocks are generally riskier than their domestic counterparts.
You should be prepared to ride out periods of underperformance.
An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan Investment Management Inc., a
subsidiary of J.P. Morgan Chase & Co. J.P. Morgan Chase which currently manages
over $700 billion, including approximately $____ billion using similar
strategies as the fund.
The portfolio management team is led by Paul A. Quinsee, managing director, who
joined the team in April of 1993 and has been at J.P. Morgan since 1992, by
Nigel F. Emmett, vice president, who has been on the team since joining J.P.
Morgan in August of 1997, and by Jenny C. Sicat, vice president, who joined the
team in August 2000 and has been at J.P. Morgan since 1995. Previously, Mr.
Emmett was an assistant manager at Brown Brothers Harriman and Co. and a
portfolio manager at Gartmore Investment Management. Prior to joining the team,
Ms. Sicat was a portfolio manager in Emerging Markets focusing on currencies and
derivatives.
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Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goals.
o The fund does not represent a complete investment program.
2 | J.P. MORGAN INTERNATIONAL EQUITY FUND
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PERFORMANCE (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan International Equity Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 10 calendar years.
The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five years and ten years compare to those of the EAFE
Index. This is an unmanaged index used to track the average performance of over
900 securities listed on the stock exchanges of countries in Europe, Australasia
and the Far East.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
[The following table was depicted as a bar chart in the printed material.]
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Year-by-year total return (%) Shows changes in returns by calendar year(1)
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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
10.58 (10.77) 24.37 5.65 7.59 8.41 1.17 13.48 29.92 (18.05)
o J.P. Morgan International Equity Fund
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 20.23% (for the quarter ended 12/31/98); and
the lowest quarterly return was -18.05% (for the quarter ended 9/30/98).
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Shows performance over time, for periods ended
Average annual total return (%) December 31, 2000(2)
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Past 1 yr. Past 5 yrs. Past 10 yrs.
J.P. Morgan International Equity Fund (after expenses) -18.05 5.79 5.01
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EAFE Index (no expenses) -14.17 7.13 6.29
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INVESTOR EXPENSES
The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.
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Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
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Management fees 0.60
Distribution (Rule 12b-1) fees none
Other expenses 0.70
================================================================================
Total annual fund
operating expenses 1.30
================================================================================
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Expense example
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The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.
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1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 132 412 713 1,568
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(1) The fund's fiscal year end is 10/31.
(2) The fund commenced operations on 6/1/90 and performance is calculated as
of 6/30/90.
(3) The fund has a master/feeder structure as described on page 15. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year expressed as a percentage of the fund's average net
assets.
J.P. MORGAN INTERNATIONAL EQUITY FUND | 3
J.P. MORGAN EUROPEAN EQUITY FUND
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REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN EUROPEAN EQUITY FUND)
RISK/RETURN SUMMARY
[GRAPHIC] For a more detailed discussion of the fund's investments and their
main risks, as well as fund strategies, please see pages 16-17.
[GRAPHIC] GOAL
The fund's goal is to provide high total return from a portfolio of
European company equity securities. This goal can be changed without shareholder
approval.
INVESTMENT APPROACH
[GRAPHIC] Principal Strategies
The fund invests primarily in equity securities from the 14 countries included
in the Morgan Stanley Capital International (MSCI) Europe Index, which is the
fund's benchmark. The fund typically does not invest in U.S. companies.
The fund focuses on stock picking, emphasizing those stocks that are ranked as
undervalued according to J.P. Morgan's proprietary research, while
underweighting or avoiding those that appear overvalued. The fund generally
keeps its industry weightings similar to those of the MSCI Europe Index,
although it does not seek to mirror the index in its choice of individual
securities. The fund makes its country allocation and currency management
decisions as described on pages 11 and 16.
Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in European stock markets and currency exchange rates. Fund performance will
also depend on the effectiveness of J.P. Morgan's research and the management
team's stock picking and currency management decisions.
In general, international investing involves higher risks than investing in U.S.
markets but offers attractive opportunities for diversification. Foreign markets
tend to be more volatile than those of the U.S., and changes in currency
exchange rates could reduce market performance. To the extent that the fund
hedges its currency exposure into the U.S. dollar, it may reduce the effects of
currency fluctuations. The fund may also hedge from one foreign currency to
another. Foreign stocks are generally riskier than their domestic counterparts.
You should be prepared to ride out periods of underperformance.
An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan Investment Management Inc., a
subsidiary of J.P. Morgan Chase & Co. J.P. Morgan Chase currently manages
approximately $700 billion, including more than $____ billion using similar
strategies as the fund.
The portfolio management team is led by Paul A. Quinsee, managing director, who
has been at J.P. Morgan since 1992, by Nigel F. Emmett, vice president, who has
been on the team since August of 1997, and by Jenny C. Sicat, vice president,
who joined the team in August 2000 and has been at J.P. Morgan since 1995.
Previously, Mr. Emmett was an assistant manager at Brown Brothers Harriman and
Co. and a portfolio manager at Gartmore Investment Management. Prior to joining
the team, Ms. Sicat was a portfolio manager in Emerging Markets focusing on
currencies and derivatives.
- --------------------------------------------------------------------------------
Before you invest
Investors considering the fund should understand that:
O There is no assurance that the fund will meet its investment goals.
O The fund does not represent a complete investment program.
4 | J.P. MORGAN EUROPEAN EQUITY FUND
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PERFORMANCE (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan European Equity Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 4 calendar years.
The table indicates some of the risks by showing how the fund's average annual
returns for the past one year and life of the fund compare to those of the MSCI
Europe Index. This is an unmanaged index comprised of more than 600 companies in
14 European countries.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
- -----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year(1)
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1997 1998 1999 2000
22.10 19.70 20.27 (15.96)
o J.P. Morgan European Equity Fund
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 18.61% (for the quarter ended 12/31/99); and
the lowest quarterly return was -18.16% (for the quarter ended 9/30/98).
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Shows performance over time, for periods ended
Average annual total return (%) December 31, 2000(2)
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Past 1 yr. Life of fund
J.P. Morgan European Equity Fund (after expenses) -15.96 12.12
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MSCI Europe Index (no expenses) -8.39 15.37
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INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.
- --------------------------------------------------------------------------------
Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees 0.65
Distribution (Rule 12b-1) fees none
Other expenses 1.48
================================================================================
Total operating expenses 2.13
Fee waiver and expense
reimbursement(4) 0.63
================================================================================
Net expenses(4) 1.50
================================================================================
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Expense example(4)
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The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
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1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 153 606 1,086 2,412
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(1) The fund's fiscal year end is 11/30. Prior to 1998, the fund's fiscal year
end was 12/31.
(2) The fund commenced operations on 5/13/96. For the period 2/29/96 through
5/31/96 returns reflect performance of J.P. Morgan Institutional European
Equity Fund (a separate feeder fund investing in the same master
portfolio) which commenced operations on 2/29/96. These returns reflect
lower operating expenses than those of the fund. Therefore, these returns
may be higher than the fund's would have been had it existed during the
same period.
(3) The fund has a master/feeder structure as described on page 15. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year expressed as a percentage of the fund's average net
assets.
(4) Reflects an agreement dated 3/1/01 by Morgan Guaranty Trust Company of New
York ("Morgan Guaranty"), an affiliate of J.P. Morgan, to reimburse the
fund to the extent total operating expenses exceed 1.50% (excluding
interest, taxes and extraordinary expenses) of the fund's average daily
net assets through 2/28/02.
J.P. MORGAN EUROPEAN EQUITY FUND | 5
J.P. MORGAN INTERNATIONAL
OPPORTUNITIES FUND TICKER SYMBOL: PPIOX
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REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND)
RISK/RETURN SUMMARY
[GRAPHIC] For a more detailed discussion of the fund's investments and their
main risks, as well as fund strategies, please see pages 16-17.
[GRAPHIC] GOAL
The fund's goal is to provide high total return from a portfolio of
equity securities of foreign companies in developed and, to a lesser extent,
emerging markets. This goal can be changed without shareholder approval.
INVESTMENT APPROACH
[GRAPHIC] Principal Strategies
The fund's assets are invested primarily in companies from developed markets
other than the U.S. The fund's assets may also be invested to a limited extent
in companies from emerging markets. Developed countries include Australia,
Canada, Japan, New Zealand, the United Kingdom, and most of the countries of
western Europe; emerging markets include most other countries in the world.
The fund focuses on stock picking, emphasizing those stocks that are ranked as
undervalued according to J.P. Morgan's proprietary research, while
underweighting or avoiding those that appear overvalued. While the fund
generally follows the process described on page 11, its country allocations and
sector weightings may differ significantly from those of the MSCI All Country
World Index Free (ex-U.S.), the fund's benchmark. The fund makes its currency
management decisions as described on pages 11 and 16.
Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in international stock markets and currency exchange rates. Fund performance
will also depend on the effectiveness of J.P. Morgan's research and the
management team's stock picking and currency management decisions.
In general, international investing involves higher risks than investing in U.S.
markets but offers attractive opportunities for diversification. Foreign markets
tend to be more volatile than those of the U.S., and changes in currency
exchange rates could reduce market performance. These risks are higher in
emerging markets. To the extent that the fund hedges its currency exposure into
the U.S. dollar, it may reduce the effects of currency fluctuations. The fund
may also hedge from one foreign currency to another. However, the fund does not
typically use this strategy for its emerging markets currency exposure. Foreign
stocks are generally riskier than their domestic counterparts. You should be
prepared to ride out periods of under-performance.
An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan Investment Management Inc., a
subsidiary of J.P. Morgan Chase & Co. J.P. Morgan Chase currently manages
approximately $700 billion, including approximately $___ billion using similar
strategies as the fund.
The portfolio management team is led by Paul A. Quinsee, managing director, who
joined the team in April 1993 and has been at J.P. Morgan since 1992, by Andrew
C. Cormie, managing director, who has been an international equity portfolio
manager since 1997 and employed by J.P. Morgan since 1984, by Nigel F. Emmett,
vice president, who has been on the team since joining J.P. Morgan in August
1997, and by Jenny C. Sicat, vice president, who joined the team in August 2000
and has been at J.P. Morgan since 1995. Previously, Mr. Emmett was an assistant
manager at Brown Brothers Harriman Company and a portfolio manager at Gartmore
Investment Management. Prior to joining the team, Ms. Sicat was a portfolio
manager in Emerging Markets focusing on currencies and derivatives.
- --------------------------------------------------------------------------------
Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goals.
o The fund does not represent a complete investment program.
6 | J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
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PERFORMANCE (UNAUDITED)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan International Opportunities Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 3 calendar years.
The table indicates some of the risks by showing how the fund's average annual
return for the past one year and life of the fund compare to that of the MSCI
All Country World Index Free (ex.-U.S.). This is an unmanaged index that
measures developed and emerging foreign stock market performance.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
- ----------------
Total return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
1998 1999 2000
3.47 40.05 (16.40)
o J.P. Morgan International Opportunities Fund
For the period covered by this total return chart, the fund's highest
quarterly return was 21.81% (for the quarter ended 12/31/98); and the
lowest quarterly return was -21.38% (for the quarter ended 9/30/98).
- -------------------------------
Shows performance over time, for periods ended
Average annual total return (%) December 31, 2000(2)
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund
J.P. Morgan International Opportunities Fund (after expenses) -16.40 5.64
- -------------------------------------------------------------------------------------------------
MSCI All Country World Index Free (ex-U.S.) (no expenses) -15.09 6.85
- -------------------------------------------------------------------------------------------------
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INVESTOR EXPENSES
The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.
- --------------------------------------------------------------------------------
Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees 0.60
Distribution (Rule 12b-1) fees none
Other expenses 0.61
================================================================================
Total annual fund
operating expenses 1.21
================================================================================
- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 123 384 665 1,466
- --------------------------------------------------------------------------------
(1) The fund's fiscal year end is 11/30.
(2) The fund commenced operations on 2/26/97 and performance is calculated as
of 2/28/97.
(3) The fund has a master/feeder structure as described on page 15. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year expressed as a percentage of the fund's average net
assets
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND | 7
J.P. MORGAN EMERGING
MARKETS EQUITY FUND TICKER SYMBOL: PPEEX
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REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN EMERGING MARKETS EQUITY FUND)
RISK/RETURN SUMMARY
[GRAPHIC] For a more detailed discussion of the fund's investments and their
main risks, as well as fund strategies, please see pages 16-17.
[GRAPHIC] GOAL
The fund's goal is to provide high total return from a portfolio of
equity securities from emerging markets issuers. This goal can be changed
without shareholder approval.
INVESTMENT APPROACH
[GRAPHIC] Principal Strategies
The fund invests primarily in equity securities from countries whose economies
or stock markets are less developed. The fund may also invest to a lesser extent
in debt securities of these countries. This designation currently includes most
countries in the world except Australia, Canada, Japan, New Zealand, the United
Kingdom, the U.S., and most of the countries of western Europe.
The fund makes its country allocation decisions as described on page 11 and may
overweight or underweight countries relative to its benchmark, the Morgan
Stanley Capital International (MSCI) Emerging Markets Free Index. The fund
emphasizes stocks that are ranked as undervalued, while underweighting or
avoiding stocks that appear overvalued. The fund typically maintains full
currency exposure to those markets in which it invests. However, the fund may
from time to time hedge a portion of its foreign currency exposure into the U.S.
dollar.
Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in international stock and bond markets, interest rates and currency exchange
rates. Fund performance will also depend on the effectiveness of J.P. Morgan's
research and the management team's country allocation and stock picking
decisions.
In general, international investing involves higher risks than investing in U.S.
markets but offers attractive opportunities for diversification. Because
emerging markets carry higher risks than developed markets, the fund's
performance is likely to be more volatile than that of many other international
equity funds. To the extent that the fund hedges its currency exposure into the
U.S. dollar, it may reduce the effects of currency fluctuations. Foreign
securities are generally riskier than their domestic counterparts. You should be
prepared to ride out periods of underperformance.
By emphasizing undervalued stocks, the fund has the potential to produce returns
that exceed those of the fund's benchmark. At the same time, the fund seeks to
limit its volatility to that of the benchmark.
An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan Investment Management Inc., a
subsidiary of J.P. Morgan Chase & Co. J.P. Morgan Chase currently manages
approximately $700 billion, including more than $___ billion using similar
strategies as the fund.
The management team is led by Satyen Mehta, managing director, who has been at
J.P. Morgan since 1984, and Peter Clark, vice president, who has been at J.P.
Morgan since 1968. Mr. Mehta has been on the team since the fund's inception.
Mr. Clark joined the team in 1999.
- --------------------------------------------------------------------------------
Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goals.
o The fund does not represent a complete investment program.
8 | J.P. MORGAN EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Emerging Markets Equity Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 7 calendar years.
The table indicates some of the risks by showing how the fund's average annual
returns for the past one and five years and life of the fund compare to those of
the MSCI Emerging Markets Free Index. This is a widely recognized, unmanaged
index of emerging markets stocks used as a measure of overall emerging market
equity performance.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
- -----------------------
Year-by-year return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999 2000
(7.58) (10.03) 8.50 (7.63) (30.79) 59.10 (30.36)
o J.P. Morgan Emerging Markets Equity Fund
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 25.83% (for the quarter ended 12/31/99); and
the lowest quarterly return was -23.69% (for the quarter ended 6/30/98).
- -------------------------------
Shows performance over time, for periods ended
Average annual total return (%) December 31, 2000(2)
- --------------------------------------------------------------------------------
Past 1 yr. Past 5 yrs. Life of fund
J.P. Morgan Emerging Markets Equity Fund (after expenses) -30.36 -5.13 -4.26
- ------------------------------------------------------------------------------------------------------------
MSCI Emerging Markets Equity Free (no expenses) -30.61 -4.17 -2.64
- ------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.
- --------------------------------------------------------------------------------
Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees 1.00
Distribution (Rule 12b-1) fees none
Other expenses 0.96
Total operating expenses 1.96
Fee waiver and expense
reimbursement(4) 0.21
Net expenses(4) 1.75
- --------------------------------------------------------------------------------
Expense example(4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 178 595 1,038 2,268
- --------------------------------------------------------------------------------
(1) The fund's fiscal year end is 10/31.
(2) The fund commenced operations on 11/15/93 and performance calculated as of
11/30/93.
(3) The fund has a master/feeder structure as described on page 15. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year expressed as a percentage of the fund's average net
assets.
(4) Reflects an agreement dated 3/1/01 by Morgan Guaranty Trust Company of New
York ("Morgan Guaranty"), an affiliate of J.P. Morgan, to reimburse the
fund to the extent total operating expenses exceed 1.75% (excluding
interest, taxes and extraordinary expenses) of the fund's average daily
net assets through 2/28/02.
J.P. MORGAN EMERGING MARKETS EQUITY FUND | 9
INTERNATIONAL EQUITY MANAGEMENT APPROACH
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J.P. MORGAN
Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan Chase is the asset management choice for many of the
world's most respected corporations, financial institutions, governments, and
individuals. J.P. Morgan Chase employs over ___ analysts and portfolio managers
around the world and has more than $700 billion in assets under management.
J.P. MORGAN INTERNATIONAL EQUITY FUNDS
These funds invest primarily in stocks and other equity securities of companies
outside the U.S. through a master portfolio (another fund with the same goal).
As a shareholder, you should anticipate risks and rewards beyond those of a
typical U.S. stock fund.
THE SPECTRUM OF INTERNATIONAL EQUITY FUNDS
The funds described in this prospectus pursue a range of goals and offer varying
degrees of risk and potential reward. Differences between these funds include:
o the parts of the world in which they invest
o how closely they follow the weightings of their benchmarks
o how many securities they typically maintain in their portfolios
o the relative weighting of stocks in developed vs. emerging markets
The table below shows degrees of the relative risk and return that these funds
potentially offer. These and other distinguishing features of each international
equity fund were described on the preceding pages.
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Potential risk and return
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The positions of the funds in this graph reflect
long-term performance goals only and are
relative, not absolute.
[Potential risk and return graph omitted.]
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Who May Want to Invest
The funds are designed for investors who:
o are pursuing a long-term goal
o want to add a non-U.S. investment with growth potential to further
diversify a portfolio
o want funds that seek to consistently outperform the markets in which they
invest
The funds are not designed for investors who:
o are uncomfortable with the risks of international investing
o are looking for a less aggressive stock investment
o require regular income or stability of principal
o are pursuing a short-term goal or investing emergency reserves
10 | INTERNATIONAL EQUITY MANAGEMENT APPROACH
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INTERNATIONAL EQUITY INVESTMENT PROCESS
While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor, focuses
on allocating assets by country, selecting stocks and managing currency
exposure. The funds largely avoid using sector or market-timing strategies.
Through its extensive global equity research and analytical systems, J.P. Morgan
seeks to generate an information advantage. Using fundamental analysis as well
as macro-economic models, J.P. Morgan develops proprietary research on
countries, companies, and currencies. In these processes, the analysts focus on
a relatively long period rather than on near-term expectations alone. The team
of analysts dedicated to international equities includes more than 90 members
around the world, with an average of nearly ten years of experience.
In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process that combines country allocation, fundamental research for
identifying portfolio securities, and currency management decisions:
[GRAPHIC]
J.P. Morgan uses top-down analysis
in determining which countries
to emphasize
Country allocation J.P. Morgan takes an in-depth look at the relative valuations
and economic prospects of different countries, ranking the attractiveness of
their markets. Using these rankings, a team of strategists establishes a country
allocation for each fund. Country allocation may vary either significantly or
moderately from the benchmark, depending on the fund. J.P. Morgan considers the
developed countries of Europe, excluding the U.K., as a whole while monitoring
the fund's exposure to any one country.
[GRAPHIC]
Stocks in each industry are ranked
with the help of models, then selected
for investment
Stock selection Various models are used to quantify J.P. Morgan's fundamental
stock research, producing a ranking of companies in each industry group
according to their relative value. Each fund's management team then buys and
sells stocks, using the research and valuation rankings as well as its
assessment of other factors, including:
o catalysts that could trigger a change in a stock's price
o potential reward compared to potential risk
o temporary mispricings caused by market overreactions
[GRAPHIC]
In some funds, J.P. Morgan may adjust
currency exposure to seek to manage
risks and enhance returns
Currency management The funds have access to J.P. Morgan's currency specialists
in determining the extent and nature of each fund's exposure to various foreign
currencies. (The Emerging Markets Equity fund typically maintains full currency
exposure to those markets in which it invests.)
INTERNATIONAL EQUITY MANAGEMENT APPROACH | 11
YOUR INVESTMENT
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For your convenience, the J.P. Morgan Funds offer several ways to start and add
to fund investments.
INVESTING THROUGH A FINANCIAL PROFESSIONAL
If you work with a financial professional, either at J.P. Morgan or elsewhere,
he or she is prepared to handle your planning and transaction needs. Your
financial professional will be able to assist you in establishing your fund
account, executing transactions, and monitoring your investment. If your fund
investment is not held in the name of your financial professional and you prefer
to place a transaction order yourself, please use the instructions for investing
directly.
INVESTING THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN
Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.
INVESTING THROUGH AN IRA OR ROLLOVER IRA
Please contact a J.P. Morgan Retirement Services Specialist at 1-800-521-5411
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.
INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:
o Choose a fund (or funds) and determine the amount you are investing. The
minimum amount for initial investments in a fund is $2,500 and for
additional investments $500, although these minimums may be less for some
investors. For more information on minimum investments, call
1-800-521-5411.
o Complete the application, indicating how much of your investment you want
to allocate to which fund(s). Please apply now for any account privileges
you may want to use in the future, in order to avoid the delays associated
with adding them later on.
o Mail in your application, making your initial investment as shown at
right.
For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.
OPENING YOUR ACCOUNT
By wire
o Mail your completed application to the Shareholder Services Agent.
o Call the Shareholder Services Agent to obtain an account number and to
place a purchase order. Funds that are wired without a purchase order will
be returned uninvested.
o After placing your purchase order, instruct your bank to wire the amount
of your investment to:
State Street Bank & Trust Company
Routing number: 031-100-238
Credit: J.P. Morgan Funds
Account number: 0073836
FFC: your account number, name of registered owner(s) and fund name
By check
o Make out a check for the investment amount payable to J.P. Morgan Funds.
o Mail the check with your completed application to the Transfer Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
ADDING TO YOUR ACCOUNT
By wire
o Call the Shareholder Services Agent to place a purchase order. Funds that
are wired without a purchase order will be returned uninvested.
o Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.
By check
o Make out a check for the investment amount payable to J.P. Morgan Funds.
o Mail the check with a completed investment slip to the Transfer Agent. If
you do not have an investment slip, attach a note indicating your account
number and how much you wish to invest in which fund(s).
By exchange
o Call the Shareholder Services Agent to effect an exchange.
12 | YOUR INVESTMENT
SELLING SHARES
By phone -- wire payment
o Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can
help you add it.
o Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your
fund account.
By phone -- check payment
o Call the Shareholder Services Agent and place your request. Once your
request has been verified, a check for the net amount, payable to the
registered owner(s), will be mailed to the address of record. For checks
payable to any other party or mailed to any other address, please make
your request in writing (see below).
In writing
o Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the
fund name; the amount you want to sell; and the recipients name and
address or wire information, if different from those of the account
registration.
o Indicate whether you want the proceeds sent by check or by wire.
o Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.
o Mail the letter to the Shareholder Services Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
Redemption in kind
o Each fund reserves the right to make redemptions of over $250,000 in
securities rather than in cash.
ACCOUNT AND TRANSACTION POLICIES
Telephone orders The funds accept telephone orders from all shareholders. The
funds require that telephone orders be placed by pre-authorized individuals
only. The funds will tape record telephone orders or take other reasonable
precautions. However, if a fund does take such steps to ensure the authenticity
of an order, you may bear any loss if the order later proves fraudulent.
Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that, for tax purposes, an
exchange is considered a sale.
A fund may alter, limit, or suspend its exchange policy at any time.
Business hours and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE (normally 4:00 p.m. eastern time). The fund's
securities are typically priced using market quotes or pricing services. When
these methods are not available or do not represent a security's value at the
time of pricing (e.g., when an event occurs on a foreign exchange after the
close of trading on that exchange that would materially impact a security's
value at the time the fund calculates its NAV), the security is valued in
accordance with the fund's fair valuation procedures.
Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares as
permitted by law and to postpone payment of proceeds for up to seven days.
Transfer Agent
State Street Bank and Trust Company
P.O. Box 8411
Boston, MA 02266-8411
Attention: J.P. Morgan Funds Services
Shareholder Services Agent
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
1-800-521-5411
Representatives are available 8:00 a.m. to 6:00 p.m. eastern time on fund
business days.
YOUR INVESTMENT | 13
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Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions. In-kind redemptions
(described on page 13) will be available as promptly as is feasible.
When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.
Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months, each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.
Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), the fund reserves the right to request that you buy more shares or
close your account. If your account balance is still below the minimum 60 days
after notification, the fund reserves the right to close out your account and
send the proceeds to the address of record.
DIVIDENDS AND DISTRIBUTIONS
Each fund typically pays income dividends and makes capital gains distributions,
if any, once a year. A fund may declare an additional income dividend in a given
year, depending on its tax situation. However, a fund may also make fewer
payments in a given year, depending on its investment results. Dividends and
distributions consist of substantially all of the fund's net investment income
and realized capital gains.
Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Fund.
TAX CONSIDERATIONS
In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. These transactions
typically create the following tax liabilities for taxable accounts:
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Transaction Tax status
Income dividends Ordinary income
Short-term capital gains Ordinary income
distributions
Long-term capital gains Capital gains
distributions
Sales or exchanges of shares Capital gains or losses
owned for more than one year
Sales or exchanges of shares Gains are treated as ordinary
owned for one year or less income; losses are subject
to special rules
Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution.
Every January, each fund issues tax information on its distributions for the
previous year.
Any investor for whom a fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.
The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.
Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.
14 | YOUR INVESTMENT
FUND DETAILS
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MASTER/FEEDER STRUCTURE
As noted earlier, each fund is a series of J.P. Morgan Funds, a Massachusetts
business trust, and is a "feeder" fund that invests in a master portfolio.
(Except where indicated, this prospectus uses the term "the fund" to mean the
feeder fund and its master portfolio taken together.)
Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses, and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-521-5411. Generally, when a master
portfolio seeks a vote, its feeder fund will hold a shareholder meeting and cast
its vote proportionately, as instructed by its shareholders. Fund shareholders
are entitled to one full or fractional vote for each dollar or fraction of a
dollar invested.
Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether the feeder fund should hire its own investment
adviser, invest in a different master portfolio, or take other action.
MANAGEMENT AND ADMINISTRATION
The feeder funds described in this prospectus, their corresponding master
portfolios and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers.
J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:
Advisory services Percentage of the master
portfolio's average net assets
International Equity 0.60%
European Equity 0.65%
International Opportunities 0.60%
Emerging Markets Equity 1.00%
Administrative services Master portfolio's and fund's
(fee shared with Funds pro-rata portions of 0.09% of
Distributor, Inc.) the first $7 billion of average net
assets in J.P. Morgan-advised
portfolios, plus 0.04% of aver-
age net assets over $7 billion
Shareholder services 0.25% of the fund's average
net assets
J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.
FUND DETAILS | 15
RISK AND REWARD ELEMENTS
This table identifies the main elements that make up each fund's overall risk
and reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.
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Policies to balance risk
Potential risks Potential rewards and reward
- --------------------------------------------------------------------------------
Foreign and other
market conditions
o Each fund's share o Stocks have o Under normal
price and generally circumstances the funds
performance will outperformed more plan to remain fully
fluctuate in stable investments invested, with at least
response to stock (such as bonds and 65% in stocks; stock
and bond market cash equivalents) investments may include
movements over the long term convertible securities,
preferred stocks,
o The value of most o Foreign investments, depository receipts
bonds will fall when which represent a (such as ADRs and EDRs),
interest rates rise; major portion of the trust or partnership
the longer a bond's world's securities, interests, warrants,
maturity and the offer attractive rights, and investment
lower its credit potential company securities
quality, the more performance and
its value typically opportunities for o The funds seek to limit
falls diversification risk and enhance
performance through
o A fund could lose o Most bonds will rise active management,
money because of in value when country allocation and
foreign government interest rates fall diversification
actions, political
instability, or lack o Foreign bonds, which o During severe market
of adequate and/or represent a major downturns, the funds
accurate information portion of the have the option of
world's fixed income investing up to 100% of
o Investment risks securities, offer assets in
tend to be higher in attractive potential investment-grade
emerging markets. performance and short-term securities
These markets also opportunities for
present higher diversification o The Emerging Markets
liquidity and Equity Fund will invest
valuation risks o Emerging markets can up to 20% of assets in
offer higher returns debt securities when
o Adverse market J.P. Morgan believes the
conditions may from potential total return
time to time cause exceeds potential total
the fund to take return in emerging
temporary defensive markets equity
positions that are securities
inconsistent with
its principal
investment
strategies and may
hinder the fund from
achieving its
investment objective
Management choices
o A fund could o A fund could o J.P. Morgan focuses its
underperform its outperform its active management on
benchmark due to its benchmark due to securities selection,
securities choices these same choices the area where it
and other management believes its commitment
decisions to research can most
enhance returns
Foreign currencies
o Currency exchange o Favorable exchange o Except as noted earlier
rate movements could rate movements could in this prospectus, each
reduce gains or generate gains or fund manages the
create losses reduce losses currency exposure of its
foreign investments
o Currency risks tend relative to its
to be higher in benchmark and may hedge
emerging markets a portion of its foreign
currency exposure into
the U.S. dollar from
time to time (see also
"Derivatives")
When-issued and delayed
delivery securities
o When a fund buys o A fund can take o Each fund uses
securities before advantage of segregated accounts to
issue or for delayed attractive offset leverage risk
delivery, it could transaction
be exposed to opportunities
leverage risk if it
does not use
segregated accounts
16 | FUND DETAILS
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Policies to balance risk
Potential risks Potential rewards and reward
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Derivatives
o Derivatives such as o Hedges that o The funds use
futures, options, correlate well with derivatives, such as
swaps, and forward underlying positions futures, options, swaps,
foreign currency can reduce or and forward foreign
contracts(1) that eliminate losses at currency contracts, for
are used for hedging low cost hedging and for risk
the portfolio or management (i.e., to
specific securities o A fund could make establish or adjust
may not fully offset money and protect exposure to particular
the underlying against losses if securities, markets or
positions and this the investment currencies); risk
could result in analysis proves management may include
losses to the fund correct management of a fund's
that would not have exposure relative to its
otherwise occurred o Derivatives that benchmark
involve leverage
o Derivatives used for could generate o The funds only establish
risk management may substantial gains at hedges that they expect
not have the low cost will be highly
intended effects and correlated with
may result in losses underlying positions
or missed
opportunities o While the funds may use
derivatives that
o The counterparty to incidentally involve
a derivatives leverage, they do not
contract could use them for the
default specific purposes of
leveraging their
o Derivatives that portfolios
involve leverage
could magnify losses
o Certain types of
derivatives involve
costs to a fund
which can reduce
returns
Securities lending
o When a fund lends a o A fund may enhance o J.P. Morgan maintains a
security, there is a income through the list of approved
risk that the loaned investment of the borrowers
securities may not collateral received
be returned if the from the borrower o The fund receives
borrower defaults collateral equal to at
least 100% of the
o The collateral will current value of
be subject to the securities loaned
risks of the
securities in which o The lending agents
it is invested indemnify a fund against
borrower default
o J.P. Morgan's collateral
investment guidelines
limit the quality and
duration of collateral
investment to minimize
losses
o Upon recall, the
borrower must return the
securities loaned within
the normal settlement
period
Illiquid holdings
o A fund could have o These holdings may o No fund may invest more
difficulty valuing offer more than 15% of net assets
these holdings attractive yields or in illiquid holdings
precisely potential growth
than comparable o To maintain adequate
o A fund could be widely traded liquidity, each fund may
unable to sell these securities hold investment-grade
holdings at the time short-term securities
or price it desired (including repurchase
agreements and reverse
repurchase agreements)
and, for temporary or
extraordinary purposes,
may borrow from banks up
to 331/3% of the value
of its total assets
Short-term trading
o Increased trading o A fund could realize o The funds generally
could raise a fund's gains in a short avoid short-term
brokerage and period of time trading, except to take
related costs advantage of attractive
o A fund could protect or unexpected
o Increased short-term against losses if a opportunities or to meet
capital gains stock is overvalued demands generated by
distributions could and its value later shareholder activity.
raise shareholders' falls The turnover rate for
income tax liability each portfolio for its
most recent fiscal year
Policies to balance risk and reward is as follows:
International Equity
(80%); European Equity
(86%); International
Opportunities (86%); and
Emerging Markets Equity
(65%).
(1) A futures contract is an agreement to buy or sell a set quantity of an
underlying instrument at a future date, or to make or receive a cash
payment based on changes in the value of a securities index. An option is
the right to buy or sell a set quantity of an underlying instrument at a
predetermined price. A swap is a privately negotiated agreement to
exchange one stream of payments for another. A forward foreign currency
contract is an obligation to buy or sell a given currency on a future date
and at a set price.
FUND DETAILS | 17
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FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand each fund's
financial performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose reports, along with each fund's financial
statements, are included in the representative fund's annual report, which are
available upon request.
J.P. MORGAN INTERNATIONAL EQUITY FUND
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Per-share data For fiscal years ended October 31
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1996 1997 1998 1999 2000
Net asset value, beginning of year ($) 10.68 11.38 10.97 10.56 12.41
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Income from investment operations:
Net investment income ($) 0.12 0.15 0.34 0.16 0.18
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions and translations ($) 1.16 0.23 0.14 2.30 (0.71)
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Total from investment operations ($) 1.28 0.38 0.48 2.46 (0.53)
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Less distributions to shareholders from:
Net investment income ($) (0.24) (0.25) (0.42) (0.31) (0.16)
Net realized gain ($) (0.34) (0.54) (0.47) (0.30) (1.05)
- ----------------------------------------------------------------------------------------------
Total distributions to shareholders ($) (0.58) (0.79) (0.89) (0.61) (1.21)
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Net asset value, end of year ($) 11.38 10.97 10.56 12.41 10.67
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- ----------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------
Total return (%) 12.31 3.46 4.87 24.41 (5.49)
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Net assets, end of year ($ thousands) 200,720 146,659 76,472 64,860 55,445
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Ratio to average net assets:
Net expenses (%) 1.14 1.12 1.17 1.21 1.30
-------------------------------------------------------------------------------------------
Net investment income (%) 1.00 1.11 0.73 0.55 0.15
-------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 1.14 1.12 1.17 1.21 1.30
-------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.01 -- --
-------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(1) 57 67 74 70 80
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(1) Represents the turnover of The International Equity Portfolio.
18 | J.P. MORGAN INTERNATIONAL EQUITY FUNDS
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J.P MORGAN EUROPEAN EQUITY FUND
- --------------
Per-share data For fiscal periods ended
- ----------------------------------------------------------------------------------------------------------
12/31/96(1) 12/31/97 For the eleven months 11/30/99 11/30/00
ended 11/30/98
Net asset value, beginning of period ($) 10.00 11.61 13.35 15.42 17.06
- ----------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) ($) 0.01 0.10 0.12 0.17 (0.09)
Net realized and unrealized gain (loss)
on investment and foreign currency
transactions ($) 1.60 2.45 1.95 1.74 (2.08)
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Total from investment operations ($) 1.61 2.55 2.07 1.91 (2.17)
- ----------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) -- (0.07) -- (0.20) (0.10)
Net realized gain ($) 0.00(2) (0.74) -- (0.01) (0.11)
In excess of realized gain ($) -- -- -- (0.06) --
- ----------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($) 0.00(2) (0.81) -- (0.27) (0.21)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 11.61 13.35 15.42 17.06 14.68
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- ----------------------------
Ratios and supplemental data
- ----------------------------------------------------------------------------------------------------------
Total return (%) 16.10(3) 22.10 15.51(3) 12.61 (12.75)
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 2,072 4,832 14,902 13,262 10,267
- ----------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 1.42(4) 1.42 1.42(4) 1.48 1.50
-------------------------------------------------------------------------------------------------------
Net investment income (%) 0.29(4) 0.91 0.91(4) 0.57 0.22
-------------------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 2.50 3.78 2.03(4) 2.38 2.13
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(5) 57 65 99 68 86
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(1) The fund commenced operations on 5/13/96.
(2) Less than 0.01.
(3) Not annualized.
(4) Annualized.
(5) Represents the turnover of The European Equity Portfolio.
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J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
- --------------
Per-share data For fiscal periods ended November 30
- ----------------------------------------------------------------------------------------------------
1997(1) 1998 1999 2000
Net asset value, beginning of period ($) 10.00 9.92 10.04 12.88
- ----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.06 0.23 0.21 0.13
Net realized and unrealized gain (loss)
on investment and foreign currency transactions ($) (0.14) (0.01) 2.93 (1.51)
- ----------------------------------------------------------------------------------------------------
Total from investment operations ($) (0.08) 0.22 3.14 (1.38)
- ----------------------------------------------------------------------------------------------------
Less distributions to shareholders from
Net investment income ($) -- (0.10) (0.30) (0.15)
Net realized gain ($) -- (0.00)(4) -- --
- ----------------------------------------------------------------------------------------------------
Total distributions to shareholders ($) -- (0.10) (0.30) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 9.92 10.04 12.88 11.35
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- ----------------------------
Ratios and supplemental data
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Total return (%) (0.80)(2) 2.30 32.13 (10.87)
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Net assets, end of period ($ thousands) 62,939 55,050 67,543 79,408
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Ratio to average net assets:
Net expenses (%) 1.20(3) 1.20 1.18 1.21
-------------------------------------------------------------------------------------------------
Net investment income (%) 1.08(3) 0.96 0.47 0.55
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Expenses without
reimbursement and including interest expense (%) 1.51(3) 1.24 1.24 1.21
-------------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.01 --
-------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(5) 72 143 80 86
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(1) The fund commenced operations on 2/26/97.
(2) Not annualized.
(3) Annualized.
(4) Less than 0.01.
(5) Represent the turnover of The International Opportunities Portfolio.
J.P. MORGAN INTERNATIONAL EQUITY FUNDS | 19
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J.P. MORGAN EMERGING MARKETS EQUITY FUND
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Per-share data For fiscal years ended October 31
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1996 1997 1998 1999 2000
Net asset value, beginning of year ($) 9.65 10.18 9.78 6.25 7.74
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Income from investment operations:
Net investment income ($) 0.08 0.08 0.12(1) 0.08 0.02
Net realized and unrealized gain (loss)
on investment and foreign currency transactions ($) 0.53 (0.42) (3.57)(1) 1.84 (0.57)
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Total from investment operations ($) 0.61 (0.34) (3.45) 1.92 (0.55)
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Less distributions to shareholders from:
Net investment income ($) (0.08) (0.06) (0.08) (0.31) (0.01)
Net realized gain ($) -- -- -- -- --
In excess of net investment income ($) -- -- -- (0.12) (0.03)
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Total distributions to shareholders ($) (0.08) (0.06) (0.08) (0.43) (0.04)
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Net asset value, end of year ($) 10.18 9.78 6.25 7.74 7.15
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- ----------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------
Total return (%) 6.31 (3.34) (35.54) 33.00 (7.12)
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Net assets, end of year ($ thousands) 59,107 45,444 23,387 35,786 34,204
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Ratio to average net assets:
Expenses (%) 1.69 1.65 1.76 1.75 1.75
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Net investment income (%) 0.68 0.62 1.24 0.73 0.15
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Expenses without
reimbursement (%) 1.69 1.65 1.82 1.87 1.96
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Portfolio turnover rate (%)(2) 31 55 44 87 65
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(1) Based on amounts prior to Statement of Position 93-2 adjustments.
(2) Represents the turnover of The Emerging Markets Equity Portfolio.
20 | J.P. MORGAN INTERNATIONAL EQUITY FUNDS
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(THIS PAGE IS INTENTIONALLY LEFT BLANK)
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FOR MORE INFORMATION
- --------------------------------------------------------------------------------
For investors who want more information on these funds, the following documents
are available free upon request:
Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.
Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.
Copies of the current versions of these documents, along with other information
about these funds, may be obtained by contacting:
J.P. Morgan Funds
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
Telephone: 1-800-521-5411
Hearing impaired: 1-888-468-4015
Email: JPM_Mutual_Funds@JPMorgan.com
Text-only versions of these documents and this prospectus are available, upon
payment of a duplicating fee, from the Public Reference Room of the Securities
and Exchange Commission in Washington, D.C. (1-202-942-8090)
(publicinfo@sec.gov), or by writing the Public Reference Section of the SEC;
Washington, DC 20549-0102, and may be viewed on-screen or downloaded from the
SEC's Internet site at http://www.sec.gov. The funds' investment company and
1933 Act registration numbers are:
J.P. Morgan International Equity Fund ...................811-07340 and 033-54632
J.P. Morgan European Equity Fund ........................811-07340 and 033-54632
J.P. Morgan International Opportunities Fund ............811-07340 and 033-54632
J.P. Morgan Emerging Markets Equity Fund ................811-07340 and 033-54632
J.P. MORGAN FUNDS AND THE MORGAN TRADITION
The J.P. Morgan Funds combine a heritage of integrity and financial leadership
with comprehensive, sophisticated analysis and management techniques. Drawing on
J.P. Morgan's extensive experience and depth as an investment manager, the J.P.
Morgan Funds offer a broad array of distinctive opportunities for mutual fund
investors.
JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Funds
Advisor
J.P. Morgan Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
1-800-521-5411
Distributor
Funds Distributor, Inc.
60 State Street
Boston, MA 02109
1-800-221-7930