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MARCH 1, 2001 | PROSPECTUS
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J.P. MORGAN INSTITUTIONAL
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 INSTITUTIONAL INTERNATIONAL EQUITY FUNDS
Each fund's goal, principal strategies,
principal risks, performance
and expenses
J.P. Morgan Institutional International Equity Fund.......................2
J.P. Morgan Institutional European Equity Fund............................4
J.P. Morgan Institutional International Opportunities Fund................6
J.P. Morgan Institutional 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
Institutional 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 INSTITUTIONAL
INTERNATIONAL EQUITY FUND | TICKER SYMBOL: JNUSX
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL
INTERNATIONAL EQUITY FUND)
[GRAPHIC] RISK/RETURN SUMMARY
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.
[GRAPHIC] INVESTMENT APPROACH
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 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, and 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 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 INSTITUTIONAL 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 Institutional 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 and five years and life of the fund 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.
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Year-by-year total return (%) Shows changes in returns by calendar year(1),(2)
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[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
International
Equity Fund(1)
--------------
1991 10.58
1992 (10.77)
1993 24.52
1994 6.00
1995 7.96
1996 8.48
1997 1.46
1998 13.62
1999 30.22
2000 (17.75)
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 30.22% (for the quarter ended 12/31/99); and the
lowest quarterly return was -17.75% (for the quarter ended 12/31/00).
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Average annual total return (%) Shows performance over time,
for periods ended December 31, 2000(2)
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Past 1 yr. Past 5 yrs. Life of fund
J.P. Morgan Institutional International
Equity Fund (after expenses) -17.75 6.02 5.19
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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 0.35
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Total annual fund
operating expenses 0.95
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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:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.
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1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 97 303 525 1,166
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(1) The fund commenced operations on 10/4/93, and returns reflect the
performance of the fund from 11/1/93 forward. For the period 6/30/90 to
10/31/93, returns reflect the performance of the J.P. Morgan International
Equity Fund, a separate feeder fund investing in the same master
portfolio.
(2) The fund's fiscal year end is 10/31.
(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 INSTITUTIONAL INTERNATIONAL EQUITY FUND | 3
J.P. MORGAN INSTITUTIONAL
EUROPEAN EQUITY FUND
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL EUROPEAN EQUITY FUND)
[GRAPHIC] RISK/RETURN SUMMARY
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.
[GRAPHIC] INVESTMENT APPROACH
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
joined the team in April 1993 and has been at J.P. Morgan since 1992, and 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 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 INSTITUTIONAL 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 Institutional 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)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
European
Equity Fund
-------------
1997 22.27
1998 21.48
1999 20.44
2000 (15.41)
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 19.67% (for the quarter ended 12/31/98); and the
lowest quarterly return was -18.48% (for the quarter ended 9/30/98).
- -------------------------------
Average annual total return (%) Shows performance over time, for
periods ended December 31, 2000(2)
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Past 1 yr. Life of fund
J.P. Morgan Institutional European
Equity Fund (after expenses) -15.41 12.68
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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 1.39
- ----------------------------------------
Total operating expenses 2.04
Fee waiver and expense
reimbursement(4) 1.04
- ----------------------------------------
Net expenses(4) 1.00
- ----------------------------------------
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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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 102 539 1,002 2,286
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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 2/29/96.
(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 1.00% (excluding
interest, taxes and extraordinary expenses) of the fund's average daily
net assets through 2/28/02.
J.P. MORGAN INSTITUTIONAL EUROPEAN EQUITY FUND | 5
J.P. MORGAN INSTITUTIONAL
INTERNATIONAL OPPORTUNITIES FUND | TICKER SYMBOL: JPIOX
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL INTERNATIONAL
OPPORTUNITIES FUND)
[GRAPHIC] RISK/RETURN SUMMARY
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.
[GRAPHIC] INVESTMENT APPROACH
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 12, 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
has been on the team since the fund's inception and at J.P. Morgan since 1992,
Andrew C. Cormie, managing director, who has been an international equity
portfolio manager since 1997 and employed by J.P. Morgan since 1984, and 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 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.
6 | J.P. MORGAN INSTITUTIONAL 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 Institutional 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 fund compare to those 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.
- -----------------------------
Rotal return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
International
Opportunities
Fund
-------------
1998 3.83
1999 39.90
2000 (16.21)
For the period covered by this total return chart, the fund's highest quarterly
return was 22.09% (for the quarter ended 12/31/98); and the lowest quarterly
return was -21.34% (for the quarter ended 9/30/98).
- -------------------------------
Average annual total return (%) Shows performance over time, for
periods ended December 31, 2000(2)
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund
J.P. Morgan Institutional International
Opportunities Fund (after expenses) -16.21 7.67
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MSCI All Country World Index Free
(ex-U.S.) (no expenses) -15.09 7.06
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 0.31
- ----------------------------------------
Total annual fund
operating expenses 0.91
- ----------------------------------------
- --------------------------------------------------------------------------------
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:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 93 290 504 1,120
- --------------------------------------------------------------------------------
(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 INSTITUTIONAL INTERNATIONAL OPPORTUNITIES FUND | 7
J.P. MORGAN INSTITUTIONAL EMERGING
MARKETS EQUITY FUND | TICKER SYMBOL: JMIEX
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL EMERGING
MARKETS EQUITY FUND)
[GRAPHIC] RISK/RETURN SUMMARY
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.
[GRAPHIC] INVESTMENT APPROACH
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 security selection
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 INSTITUTIONAL 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 Institutional 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 total return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
Emerging Markets
Equity Fund
----------------
1994 (7.19)
1995 (9.68)
1996 (8.84)
1997 (7.71)
1998 (30.33)
1999 59.40
2000 (30.23)
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 25.88% (for the quarter ended 12/31/99); and the
lowest quarterly return was 23.56% (for the quarter ended 6/30/98).
- -------------------------------
Average annual total return (%) Shows performance over time, for
periods ended December 31, 2000(2)
- --------------------------------------------------------------------------------
Past 1 yr. Past 5 yrs. Life of fund
J.P. Morgan Institutional Emerging
Markets Equity (after expenses) -30.23 -8.20 -3.98
- --------------------------------------------------------------------------------
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 0.55
- ----------------------------------------
Total operating expenses 1.55
Fee waiver and expense
reimbursement(4) 0.10
- ----------------------------------------
Net expenses(4) 1.45
- ----------------------------------------
- --------------------------------------------------------------------------------
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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 148 480 835 1,837
- --------------------------------------------------------------------------------
(1) The fund's fiscal year end is 10/31.
(2) The fund commenced operations on 11/15/93 and performance is 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 1.45% (excluding
interest, taxes and extraordinary expenses) of the fund's average daily
net assets through 2/28/02.
J.P. MORGAN INSTITUTIONAL EMERGING MARKETS EQUITY FUND | 9
INTERNATIONAL EQUITY MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
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.
[POTENTIAL RISK AND RETURN GRAPH OMITTED]
The positions of the funds in this graph reflect long-term performance goals
only and are relative, not absolute.
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
For your convenience, the J.P. Morgan Institutional 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 1-800-766-7722
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 the Emerging Markets Equity fund
is $500,000 and in the International Equity, International Opportunities
and European Equity funds is $1,000,000. The minimum for additional
investments is $25,000, although these minimums may be less for some
investors. For more information on minimum investments, call
1-800-766-7722.
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 1-800-766-7722.
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:
Morgan Guaranty Trust Company of New York-Delaware
Routing number: 031-100-238
Credit: J.P. Morgan Institutional Funds
Account number: 001-57-689
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
Institutional Funds.
o Mail the check with your completed application to the Shareholder Services
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
Institutional Funds.
o Mail the check with a completed investment slip to the Shareholder
Services 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 recipient's 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 funds'
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.
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.
- --------------------------------------------------------------------------------
Shareholder Services Agent
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
1-800-766-7722
Representatives are available 8:00 a.m. to 6:00 p.m. eastern time on fund
business days.
YOUR INVESTMENT | 13
- --------------------------------------------------------------------------------
Redemption orders for each fund received by the cut-off times will be paid in
immediately available funds, normally on the same day, according to instructions
on file. 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 Institutional 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:
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
MASTER/FEEDER STRUCTURE
As noted earlier, each fund is a series of J.P. Morgan Institutional 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 1-800-766-7722. 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 average net assets
over $7 billion
Shareholder services 0.10% 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 each fund's policies
toward various investments, including fund's overall risk and reward
characteristics. It also outlines those that are designed to help certain funds
manage risk.
- --------------------------------------------------------------------------------
Potential risks Potential rewards Policies to balance
risk and reward
- --------------------------------------------------------------------------------
Foreign and other market
conditions
o Each fund's share o Stocks have o Under normal circumstances
price and generally the funds plan to remain
performance will outperformed more fully invested, with at
fluctuate in stable investments least 65% in stocks; stock
response to stock (such as bonds and investments may include
and bond market cash equivalents) convertible securities,
movements over the long term preferred stocks, depository
receipts (such as ADRs and
o The value of most o Foreign investments, EDRs), trust or partnership
bonds will fall when which represent a interests, warrants, rights,
interest rates rise; major portion of the and investment company
the longer a bond's world's securities, securities
maturity and the offer attractive
lower its credit potential o The funds seek to limit risk
quality, the more performance and and enhance performance
its value typically opportunities for through active management,
falls diversification country allocation and
diversification
o A fund could lose o Most bonds will rise
money because of in value when o During severe market
foreign government interest rates fall downturns, the funds have
actions, political the option of investing up
instability, or lack o Foreign bonds, which to 100% of assets in
of adequate and/or represent a major investment-grade short-term
accurate information portion of the securities
world's fixed income
o Investment risks securities, offer o The Emerging Markets Equity
tend to be higher in attractive potential Fund will invest up to 20%
emerging markets. performance and of assets in debt securities
These markets also opportunities for when J.P. Morgan believes
present higher diversification the potential total return
liquidity and exceeds potential total
valuation risks o Emerging markets can return in emerging markets
offer higher returns equity securities
o Adverse market
conditions may from
time to time cause
the fund to take
temporary defensive
positions that are
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, the
securities choices these same choices area where it believes its
and other management commitment to research can
decisions most enhance returns
Foreign currencies
o Currency exchange o Favorable exchange o Except as noted earlier in
rate movements could rate movements could this prospectus, each fund
reduce gains or generate gains or manages the currency
create losses reduce losses exposure of its foreign
investments relative to its
o Currency risks tend benchmark and may hedge a
to be higher in portion of its foreign
emerging markets 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 segregated
securities before advantage of accounts to offset leverage
issue or for delayed attractive risk
delivery, it could transaction
be exposed to opportunities
leverage risk if it
does not use
segregated accounts
16 | FUND DETAILS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Potential risks Potential rewards Policies to balance
risk and reward
- --------------------------------------------------------------------------------
Derivatives
o Derivatives such as o Hedges that o The funds use derivatives,
futures, options, correlate well with such as futures, options,
swaps, and forward underlying positions swaps, and forward foreign
foreign currency can reduce or currency contracts, for
contracts(1) that are eliminate losses at hedging and for risk
used for hedging the low cost management (i.e., to
portfolio or establish or adjust exposure
specific securities o A fund could make to particular securities,
may not fully offset money and protect markets or currencies); risk
the underlying against losses if management may include
positions and this the investment management of a fund's
could result in analysis proves exposure relative to its
losses to the fund correct benchmark
that would not have
otherwise occurred o Derivatives that o The funds only establish
involve leverage hedges that they expect will
o Derivatives used for could generate be highly correlated with
risk management may substantial gains at underlying positions
not have the low cost
intended effects and o While the funds may use
may result in losses derivatives that
or missed incidentally involve
opportunities leverage, they do not use
them for the specific
o The counterparty to purpose of leveraging their
a derivatives portfolios
contract could
default
o Derivatives that
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 list
security, there is a income through the of approved borrowers
risk that the loaned investment of the
securities may not collateral received o The fund receives collateral
be returned if the from the borrower equal to at least 100% of
borrower defaults the current value of
securities loaned
o The collateral will
be subject to the o The lending agents indemnify
risks of the a fund against borrower
securities in which default
it is invested
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 than
difficulty valuing offer more 15% of net assets in
these holdings attractive yields or 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
33 1/3% of the value of its
total assets
Short-term trading
o Increased trading o A fund could realize o The funds generally avoid
could raise a fund's gains in a short short-term trading, except
brokerage and period of time to take advantage of
related costs attractive or unexpected
o A fund could protect opportunities or to meet
o Increased short-term against losses if a demands generated by
capital gains stock is overvalued shareholder activity. The
distributions could and its value later turnover rate for each fund
raise shareholders' falls for its most recent fiscal
income tax liability year end 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
- --------------------------------------------------------------------------------
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 INSTITUTIONAL INTERNATIONAL EQUITY FUND
- ------------------------
Per-share data For fiscal years ended October 31
- ---------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000
Net asset value, beginning of year ($) 10.44 11.43 11.39 11.21 13.56
- ---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.12 0.17 0.32 0.19 0.05
Net realized and unrealized gain (loss)
on investment and foreign currency ($) 1.17 0.24 0.20 2.51 (0.66)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 1.29 0.41 0.52 2.70 (0.61)
- ---------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.24) (0.25) (0.35) (0.35) (0.16)
Net realized gain ($) (0.06) (0.20) (0.35) -- (0.51)
- ---------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($) (0.30) (0.45) (0.70) (0.35) (0.67)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 11.43 11.39 11.21 13.56 12.28
- ---------------------------------------------------------------------------------------------------------------------
- ----------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------
Total return (%) 12.54 3.71 4.95 24.70 (5.16)
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands) 726,864 614,659 366,991 471,195 432,785
- ---------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.95 0.93 0.97 0.95 0.95
-------------------------------------------------------------------------------------------------------------------
Net investment income (%) 1.24 1.32 0.92 0.81 0.50
-------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement and including interest expense (%) 0.96 0.93 0.97 0.95 0.95
-------------------------------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.01 -- --
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(1) 57 67 74 70 80
- ---------------------------------------------------------------------------------------------------------------------
(1) Represents the turnover of The International Equity Portfolio.
18 | J.P. MORGAN INSTITUTIONAL INTERNATIONAL EQUITY FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL EUROPEAN EQUITY FUND
- ------------------------------
Per-share data For fiscal periods ended
- -----------------------------------------------------------------------------------------------------------------------------
For the
eleven months
12/31/96 12/31/97 ended 11/30/98 11/30/99 11/30/00
Net asset value, beginning of period ($) 10.00 11.56 12.56 14.73 15.92
- -----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.12 0.21 0.20 0.25 0.04
Net realized and unrealized gain
on investment and foreign currency ($) 1.59 2.34 1.97 1.55 (1.96)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 1.71 2.55 2.17 1.80 (1.92)
- -----------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.10) (0.17) -- (0.23) (0.22)
Net realized gain ($) (0.05) (1.38) -- (0.14) --
In excess of realized gain ($) -- -- (0.24) (0.06)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($) (0.15) (1.55) -- (0.61) (0.28)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 11.56 12.56 14.73 15.92 13.72
- -----------------------------------------------------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) 17.10(2) 22.27 17.28(2) 12.72 (12.20)
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 6,532 10,174 12,439 11,695 7,856
- -----------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 1.00(3) 1.00 1.00(3) 0.99 1.00
---------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 1.68(3) 1.57 1.32(3) 1.10 0.70
---------------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement and including interest expense (%) 2.50(4) 2.08 1.77(3) 2.17 2.04
---------------------------------------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.05(3) 0.02 --
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(5) 57 65 99 68 86
- -----------------------------------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 2/29/96.
(2) Not annualized.
(3) Annualized.
(4) After consideration of then applicable state limitations.
(5) Represents the turnover of The European Equity Portfolio.
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL INTERNATIONAL OPPORTUNITIES FUND
- -----------------
Per-share data For fiscal periods ended November 30
- ------------------------------------------------------------------------------------------------------------
1997(1) 1998 1999 2000
Net asset value, beginning of period ($) 10.00 9.94 10.11 12.92
- ------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.07 0.22 0.25 0.08
Net realized and unrealized gain (loss)
on investment and foreign currency ($) (0.13) 0.05 2.88 (1.42)
- ------------------------------------------------------------------------------------------------------------
Total from investment operations ($) (0.06) 0.27 3.13 (1.34)
- ------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) -- (0.10) (0.32) (0.19)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 9.94 10.11 12.92 11.39
- ------------------------------------------------------------------------------------------------------------
- ----------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------
Total return (%) (0.60)(2) 2.69 31.87 (10.55)
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 211,229 323,918 370,268 461,016
- ------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.99(3) 0.99 0.94 0.91
----------------------------------------------------------------------------------------------------------
Net investment income (%) 1.35(3) 1.13 0.76 0.84
----------------------------------------------------------------------------------------------------------
Expenses without
reimbursement and including interest expense (%) 1.17(3) 1.02 0.95 0.91
----------------------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.01 --
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(4) 72 143 80 86
- ------------------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 2/26/97.
(2) Not annualized.
(3) Annualized.
(4) Represents the turnover of The International Opportunities Portfolio.
J.P. MORGAN INSTITUTIONAL INTERNATIONAL EQUITY FUNDS | 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL EMERGING MARKETS EQUITY FUND
- ----------------
Per-share data For fiscal years ended October 31
- --------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000
Net asset value, beginning of year ($) 9.71 10.27 9.86 5.91 7.22
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) ($) 0.08 0.11 0.14(1) 0.14 0.02
Net realized and unrealized gain (loss)
on investment and foreign currency ($) 0.56 (0.43) (3.44)(1) 1.68 (0.50)
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.64 (0.32) (3.30)(1) 1.82 (0.48)
- --------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.08) (0.09) (0.13) (0.40) (0.04)
Net realized gain ($) -- -- (0.52) -- (0.02)
In excess of net investment income ($) -- -- -- (0.11) --
- --------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($) (0.08) (0.09) (0.65) (0.51) (0.06)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 10.27 9.86 5.91 7.22 6.68
- --------------------------------------------------------------------------------------------------------------------
- ----------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------
Total return (%) 6.64 (3.15) (35.50) 33.76 (6.88)
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands) 293,594 306,381 120,402 131,046 110,711
- --------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 1.41 1.37 1.46 1.42 1.45
------------------------------------------------------------------------------------------------------------------
Net investment income (%) 0.96 0.95 1.43 0.99 0.46
------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement including interest expense (%) 1.41 1.37 1.54 1.52 1.55
------------------------------------------------------------------------------------------------------------------
Interest expense (%) -- -- 0.04 0.02 0.00(2)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%)(3) 31 55 44 87 65
- --------------------------------------------------------------------------------------------------------------------
(1) Based on amounts prior to Statement of Position 93-2 adjustments.
(2) Amount is less than 0.005%.
(3) Represents the turnover of the Emerging Markets Equity Fund.
20 | J.P. MORGAN INSTITUTIONAL INTERNATIONAL EQUITY FUNDS
- --------------------------------------------------------------------------------
(THIS PAGE IS INTENTIONALLY LEFT BLANK)
- --------------------------------------------------------------------------------
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 Institutional Funds
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
Telephone: 1-800-766-7722
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 Institutional International Equity Fund .....811-07342 and 033-54642
J.P. Morgan Institutional European Equity Fund ..........811-07342 and 033-54642
J.P. Morgan Institutional International
Opportunities Fund ....................................811-07342 and 033-54642
J.P. Morgan Institutional Emerging Markets Equity Fund ..811-07342 and 033-54642
J.P. MORGAN INSTITUTIONAL FUNDS AND THE MORGAN TRADITION
The J.P. Morgan Institutional 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 Institutional Funds offer a broad array of
distinctive opportunities for mutual fund investors.
JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds
Advisor Distributor
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-766-7722 1-800-221-7930
- --------------------------------------------------------------------------------
MARCH 1, 2001 | PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN INTERNATIONAL
EQUITY FUNDS - ADVISOR SERIES
International Equity Fund - Advisor Series
International Opportunities Fund - Advisor Series
----------------------------------------
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
- --------------------------------------------------------------------------------
2 | J.P. MORGAN INTERNATIONAL EQUITY FUNDS ADVISOR SERIES
Each fund's goal, principal strategies,
principal risks, performance
and expenses
J.P. Morgan International Equity Fund - Advisor Series ...... 2
J.P. Morgan International Opportunities Fund - Advisor Series 4
6 | INTERNATIONAL EQUITY MANAGEMENT APPROACH
Principles and techniques common
to the funds in this prospectus
J.P. Morgan ................................................. 6
J.P. Morgan International Equity Funds ...................... 6
The spectrum of international equity funds .................. 6
Who may want to invest ...................................... 6
International equity investment process ..................... 7
8 | YOUR INVESTMENT
Investing in the
J.P. Morgan International
Equity Funds Advisor Series
Investing through a service organization .................... 8
Account and transaction policies ............................ 8
Dividends and distributions ................................. 8
Tax considerations .......................................... 9
10 | FUND DETAILS
More about risk and the funds'
business operations
Business structure .......................................... 10
Management and administration ............................... 10
Risk and reward elements .................................... 12
Financial highlights ........................................ 14
FOR MORE INFORMATION ...................................back cover
J.P. MORGAN INTERNATIONAL
EQUITY FUND - ADVISOR SERIES
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INTERNATIONAL EQUITY FUND - ADVISOR SERIES)
[GRAPHIC]
RISK/RETURN SUMMARY
For a more detailed discussion of the fund's investments and their main
risks, as well as fund strategies, please see pages 12-13.
[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.
[GRAPHIC]
INVESTMENT APPROACH
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 7 and 12.
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
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 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.
- --------------------------------------------------------------------------------
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 - ADVISOR SERIES
- --------------------------------------------------------------------------------
PERFORMANCE OF A RELATED FUND (unaudited)
The funds commenced operations on September 15, 2000. Accordingly, the bar chart
and table shown below provide some indication of the risks of investing in the
fund because returns reflect performance of the J.P. Morgan International Equity
Fund, a related fund investing in the same master portfolio.
The bar chart indicates some of the risks by showing changes in the performance
of the J.P. Morgan International Equity 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 J.P. Morgan
International Equity 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 J.P. Morgan International Equity Fund's past performance does not
necessarily indicate how the J.P. Morgan International Equity Fund - Advisor
Series will perform in the future.
- ----------------------
Year-by-year total (%) Shows changes in returns by calendar year (1), (2)
- --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
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 J.P. Morgan
International Equity Fund's highest quarterly return was 20.23% (for the quarter
ended 12/31/99); and the lowest quarterly return was -18.05% (for the quarter
ended 9/30/98).
- -------------------------------
Average annual total return (%)
Shows performance over time, for periods ended December 31, 2000(1)
- --------------------------------------------------------------------------------
Past 1 yr. Past 5 yrs. Past 10 yrs.
J.P. Morgan International Equity
Fund (after expenses) -18.05 5.79 5.01
- --------------------------------------------------------------------------------
EAFE Index (no expenses) -14.17 7.13 6.29
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The estimated expenses of the fund before and after reimbursement are shown at
right. The fund has no redemption, distribution, 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 0.60
Distribution (Rule 12b-1) fees(4) 0.25
Service fees(5) 0.25
Other expenses 0.40
- ---------------------------------------------
Total operating expenses 1.50
Fee waiver and
expense reimbursement(6) (0.05)
- ---------------------------------------------
Net expenses(6) 1.45
- ---------------------------------------------
- ---------------------------------------------
Expense example(6)
- ---------------------------------------------
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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- ---------------------------------------------
1 yr. 3 yrs.
- ---------------------------------------------
Your cost($) 148 469
- ---------------------------------------------
(1) The funds commenced operations on 9/15/00 and returns reflect the
performance of the J.P. Morgan International Equity Fund which commenced
operations on 6/1/90 and performance is calculated as of 6/30/90. These
returns reflect lower operating expenses than those of the fund.
Therefore, the fund's returns would have been lower had it existed during
the same period.
(2) The fund's fiscal year end is 10/31.
(3) The fund has a master/feeder structure as described on page 10. This table
shows the fund's estimated expenses and its estimated share of master
portfolio expenses for the current fiscal year expressed as a percentage
of the fund's estimated average net assets.
(4) The plan under Rule 12b-1 (described on page 10) allows such fees to be
paid out of the fund's assets on an ongoing basis. Over time, these fees
will increase the cost or your investment and may cost you more than
paying other types of sales charges.
(5) Service organizations (described on page 8) may charge other fees to their
customers who are the beneficial owners of shares in connection with their
customers' accounts. Such fees, if any, may affect the return such
customers realize with respect to their investments.
(6) Reflects an agreement dated 3/1/01 by Morgan Guaranty Trust Company of New
York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
total operating expenses (which exclude interest, taxes and extraordinary
expenses) exceed 1.45% of the fund's average daily net assets through
2/28/02.
J.P. MORGAN INTERNATIONAL EQUITY FUND - ADVISOR SERIES | 3
J.P. MORGAN INTERNATIONAL
OPPORTUNITIES FUND - ADVISOR SERIES
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND - ADVISOR SERIES)
[GRAPHIC]
RISK/RETURN SUMMARY
For a more detailed discussion of the fund's investments and their main
risks, as well as fund strategies, please see pages 12-13.
[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.
[GRAPHIC]
INVESTMENT APPROACH
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 7, 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 7 and 12.
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
has been on the team since the fund's inception and at J.P. Morgan since 1992,
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 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 INTERNATIONAL OPPORTUNITIES FUND - ADVISOR SERIES
- --------------------------------------------------------------------------------
PERFORMANCE OF A RELATED FUND (unaudited)
The fund commenced operations on September 15, 2000. Accordingly, the bar chart
and table shown below provide some indication of the risks of investing in the
fund because returns reflect performance of the J.P. Morgan International
Opportunities Fund, a related fund investing in the same master portfolio.
The bar chart indicates some of the risks by showing changes in the performance
of the J.P. Morgan International Opportunities 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 J.P. Morgan
International Opportunities Fund's average annual return for the past one year
and life of 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 J.P. Morgan International Opportunities 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), (2)
- --------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A BAR CHART IN THE PRINTED MATERIAL]
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 J.P. Morgan International
Opportunities Fund's highest quarterly return was 21.81% (for the quarter ended
12/31/98); and the lowest quarterly return was -6.88% (for the quarter ended
12/31/00).
- -------------------------------
Average annual total return (%)
Shows performance over time, for periods ended December 31, 2000(1)
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund
J.P. Morgan International
Opportunities Fund (after expenses) -16.40 5.65
- --------------------------------------------------------------------------------
MSCI All Country World Index
Free (ex-U.S.) (no expenses) -15.09 7.06
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The estimated expenses of the fund before and after reimbursement are shown at
right. The fund has no redemption, distribution, 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 0.60
Distribution (Rule 12b-1) fees(4) 0.25
Service fees(5) 0.25
Other expenses 0.36
- ---------------------------------------------
Total operating expenses 1.46
Fee waiver and
expense reimbursement(6) (0.01)
- ---------------------------------------------
Net expenses(6) 1.45
- ---------------------------------------------
- --------------------------------------------------------------------------------
Expense example(6)
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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- ---------------------------------------------
1 yr. 3 yrs.
Your cost($) 148 461
- ---------------------------------------------
(1) The fund commenced operations on 9/15/00 and returns reflect the
performance of the J.P. Morgan International Opportunities Fund which
commenced operations on 2/26/97 and performance is calculated as of
2/28/97. These returns reflect lower operating expenses than those of the
fund. Therefore, the fund's returns would have been lower had it existed
during the same period.
(2) The fund's fiscal year end is 11/30.
(3) The fund has a master/feeder structure as described on page 10. This table
shows the fund's estimated expenses and its estimated share of master
portfolio expenses for the past fiscal year expressed as a percentage of
the fund's estimated average net assets.
(4) The plan under Rule 12b-1 (described on page 10) allows such fees to be
paid out of the fund's assets on an ongoing basis. Over time, these fees
will increase the cost or your investment and may cost you more than
paying other types of sales charges.
(5) Service organizations (described on page 8) may charge other fees to their
customers who are the beneficial owners of shares in connection with their
customers' accounts. Such fees, if any, may affect the return such
customers realize with respect to their investments.
(6) Reflects an agreement dated 3/1/01 by Morgan Guaranty Trust Company of New
York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
total operating expenses (which exclude interest, taxes and extraordinary
expenses) exceed 1.45% of the fund's average daily net assets through
2/28/02.
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND - ADVISOR SERIES | 5
INTERNATIONAL EQUITY MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
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 approximately ____ analysts and portfolio
managers around the world and has approximately $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
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.
- --------------------------------------------------------------------------------
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
- -------------------------
Potential risk and return
- -------------------------
[GRAPH]
The positions of the funds in this graph reflect long-term performance goals
only and are relative, not absolute.
6 | INTERNATIONAL EQUITY MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
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 approximately 90
members around the world, with an average of approximately 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:
J.P. Morgan uses top-down analysis
in determining which countries
to emphasize
[GRAPHIC]
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.
Stocks in each industry are ranked
with the help of models, then selected
for investment
[GRAPHIC]
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
J.P. Morgan may adjust currency
exposure to seek to manage
risks and enhance returns
[GRAPHIC]
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.
INTERNATIONAL EQUITY MANAGEMENT APPROACH | 7
YOUR INVESTMENT
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INVESTING THROUGH A SERVICE ORGANIZATION
Investors may only purchase, exchange and redeem shares of a fund with the
assistance of a service organization. Your service organization is paid by the
fund to assist you in establishing your fund account, executing transactions,
and monitoring your investment. The minimum amount for initial investments in
each fund is $2,500 and for additional investments $500, although these minimums
may be less for some investors. Service organizations may provide the following
services in connection with their customers' investments in a fund:
o Acting, directly or through an agent, as the sole shareholder of record
o Maintaining account records for customers
o Processing orders to purchase, redeem or exchange shares for customers
o Responding to inquiries from shareholders
o Assisting customers with investment procedures
ACCOUNT AND TRANSACTION POLICIES
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 funds'
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 each 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.
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.
When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds may not be available until your check
clears. This may take up to 15 days.
Redemption in kind Each fund reserves the right to make redemption of over
$250,000 in securities rather than in cash.
Statements and reports You will receive from your service organization account
statements and confirmation of each purchase or sale of shares. 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), each 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, each 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 service organization to have them sent to
you by check, credited to a separate account, or invested in another J.P. Morgan
Advisor Fund.
8 | YOUR INVESTMENT
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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:
Transaction Tax status
Income dividends Ordinary income
Short-term capital gains distributions Ordinary income
Long-term capital gains distributions Capital gains
Sales or exchanges of shares owned for Capital gains or losses
more than one year
Sales or exchanges of shares owned for Gains are treated as ordinary income;
one year or less 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.
Shareholder Services Agent
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
1-800-766-7722
Representatives are available 8:00 a.m. to 6:00 p.m. eastern time on fund
business days.
YOUR INVESTMENT | 9
FUND DETAILS
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BUSINESS STRUCTURE
As noted earlier, each fund is a series of J.P. Morgan Institutional 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 1-800-766-7722. 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 and their corresponding master
portfolios 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%
International Opportunities 0.60%
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 average
net assets over $7 billion
Shareholder services 0.05% of the fund's average
net assets
Each fund has a service plan which allows it to pay service organizations up to
0.25% of the average net assets of the shares held in the name of the service
organization.
Each fund has adopted a plan under Rule 12b-1 that allows the fund to pay
distribution fees up to 0.25% of the fund's average net assets for the sale and
distribution of its shares. Because these fees are paid out of the fund's assets
on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
J.P. Morgan may pay fees to certain firms and professionals for providing record
keeping or other services in connection with investments in a fund.
10 | FUND DETAILS
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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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Potential risks Potential rewards Policies to balance risk and
reward
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Foreign and other
market conditions
o Each fund's share o Stocks have o Under normal
price and generally circumstances the
performance will outperformed more funds plan to remain
fluctuate in stable investments fully invested, with
response to stock (such as bonds and at least 65% in
and bond market cash equivalents) stocks; stock
movements over the long term investments may
include convertible
o The value of most o Foreign investments, securities,
bonds will fall when which represent a preferred stocks,
interest rates rise; major portion of the depository receipts
the longer a bond's world's securities, (such as ADRs and
maturity and the offer attractive EDRs), trust or
lower its credit potential partnership
quality, the more performance and interests, warrants,
its value typically opportunities for rights, and
falls diversification investment company
securities
o A fund could lose o Most bonds will rise
money because of in value when o The funds seek to
foreign government interest rates fall limit risk and
actions, political enhance performance
instability, or lack o Foreign bonds, which through active
of adequate and/or represent a major management, country
accurate information portion of the allocation and
world's fixed income diversification
o Investment risks securities, offer
tend to be higher in attractive potential o During severe market
emerging markets. performance and downturns, the funds
These markets also opportunities for have the option of
present higher diversification investing up to 100%
liquidity and of assets in
valuation risks o Emerging markets can investment-grade
offer higher returns short-term
o Adverse market securities
conditions may from
time to time cause
the fund to take
temporary defensive
positions that are
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
underperform its outperform its its active
benchmark due to its benchmark due to management on
securities choices these same choices securities
and other management selection, the area
decisions where it believes
its commitment 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
issue or for delayed attractive to offset leverage
delivery, it could transaction risk
be exposed to opportunities
leverage risk if it
does not use
segregated accounts
12 | FUND DETAILS
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Potential risks Potential rewards Policies to balance risk 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,
foreign currency can reduce or swaps, and forward
contracts1 that are eliminate losses at foreign currency
used for hedging the low cost contracts, for
portfolio or hedging and for risk
specific securities o A fund could make management (i.e., to
may not fully offset money and protect establish or adjust
the underlying against losses if exposure to
positions and this the investment particular
could result in analysis proves securities, markets
losses to the fund correct or currencies); risk
that would not have management may
otherwise occurred o Derivatives that include management
involve leverage of a fund's exposure
o Derivatives used for could generate relative to its
risk management may substantial gains at benchmark
not have the low cost
intended effects and o The funds only
may result in losses establish hedges
or missed that they expect
opportunities will be highly
correlated with
o The counterparty to underlying positions
a derivatives
contract could o While the funds may
default use derivatives that
incidentally involve
o Derivatives that leverage, they do
involve leverage not use them for the
could magnify losses specific purposes of
leveraging their
o Certain types of portfolios
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
security, there is a income through the maintains a list of
risk that the loaned investment of the approved 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
difficulty valuing offer more more than 15% of net
these holdings attractive yields or assets in illiquid
precisely potential growth holdings
than comparable
o A fund could be widely traded o To maintain adequate
unable to sell these securities liquidity, each fund
holdings at the time may hold
or price it desired investment-grade
short-term
securities
(including
repurchase
agreements and
reverse repurchase
agreements) and, for
temporary or
extraordinary
purposes, may borrow
from banks up to
33 1/3% 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
related costs take advantage of
o A fund could protect attractive or
o Increased short-term against losses if a unexpected
capital gains stock is overvalued opportunities or to
distributions could and its value later meet demands
raise shareholders' falls generated by
income tax liability shareholder
activity. The
portfolio turnover
rates for the
portfolio in which
each fund invests
for its most recent
fiscal year end
were: The
International Equity
Portfolio at
10/31/00 (80%) and
The International
Opportunities
Portfolio at
11/30/00 (86%)
(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 | 13
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the period indicated. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statement, is included in the fund's annual report, which is available
upon request.
J.P. MORGAN INTERNATIONAL EQUITY FUND -- ADVISOR SERIES
For the period
September 15, 2000
(commencement of
- -------------- operations) through
Per share data October 31, 2000
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Net asset value, beginning of period ($) 10.00
Income from investment operations:
Net investment loss ($) (0.03)(1)
Net realized and unrealized gain (loss) on investment ($) (0.52)
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Total from investment operations ($) (0.55)
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Net asset value, end of period ($) 9.45
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Ratios and supplemental data
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Total return (%) (5.50)(2)
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Net assets, end of period ($ thousands) 508
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Ratio to average net assets:
Net expenses (%) 1.45(3)
-----------------------------------------------------------------------------
Net investment income (%) (1.40)(3)
-----------------------------------------------------------------------------
Expenses without reimbursement (%) 1.50(3),(4)
-----------------------------------------------------------------------------
(1) Based on the average number of shares outstanding throughout the period.
(2) Not annualized.
(3) Annualized.
(4) Reflects the ratio of expenses without reimbursement to average net assets
for the current period adjusted for the effects of rounding due to a
relatively low level of assets from inception. The actual ratio of
expenses without reimbursement to average net assets for the current
period was 268.67%.
14 |
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the period indicated. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the fund's
financial statement, is included in the fund's annual report, which is available
upon request.
- --------------------------------------------------------------------------------
J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND -- ADVISOR SERIES
For the period
September 15, 2000
(commencement of
- -------------- operations) through
Per share data November 30, 2000
- --------------------------------------------------------------------------------
Net asset value, beginning of period ($) 10.00
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.01
Net realized and unrealized loss on investments ($) (1.19)
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Total from investment operations ($) (1.18)
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Net asset value, end of period ($) 8.82
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- ----------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------
Total return (%) (11.80)(1)
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Net assets, end of period ($ thousands) 480
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Ratio to average net assets:
- --------------------------------------------------------------------------------
Net expenses (%) 1.45(2)
-----------------------------------------------------------------------------
Net investment loss (%) (0.75)(2)
-----------------------------------------------------------------------------
Expenses without reimbursement (%) 1.46(2), (3)
-----------------------------------------------------------------------------
(1) Not annualized.
(2) Annualized.
(3) Reflects the ratio of expenses without reimbursement to average net assets
for the current period adjusted for the effects of rounding due to a
relatively low level of assets from inception. The actual ratio of
expenses without reimbursement to average net assets for the current
period was 46.50%.
| 15
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FOR MORE INFORMATION
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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 Institutional Funds
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
Telephone: 1-800-766-7722
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
- - Advisor Series ........................................811-07342 and 033-54642
J.P. Morgan International Opportunities Fund
- - Advisor Series ........................................811-07342 and 033-54642
J.P. MORGAN INSTITUTIONAL FUNDS AND THE MORGAN TRADITION
The J.P. Morgan Institutional 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 Institutional Funds offer a broad array of
distinctive opportunities for mutual fund investors.
JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds
Advisor Distributor
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-766-7722 1-800-221-7930