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MARCH 1, 2001 | PROSPECTUS
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J.P. MORGAN INSTITUTIONAL
SERVICE MONEY MARKET FUNDS
Prime Money Market Fund
Treasury Money Market Fund
Federal Money Market Fund
Tax Exempt Money Market Fund
--------------------------------------
Seeking to provide high current income
consistent with the preservation of
capital and same-day liquidity
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 SERVICE MONEY MARKET FUNDS
Each fund's goal, principal strategies,
principal risks, performance and
expenses
J.P. Morgan Institutional Service Prime Money Market Fund ............ 2
J.P. Morgan Institutional Service Treasury Money Market Fund ......... 4
J.P. Morgan Institutional Service Federal Money Market Fund .......... 6
J.P. Morgan Institutional Service Tax Exempt Money Market Fund ....... 8
10 | MONEY MARKET MANAGEMENT APPROACH
Principles and techniques common
to the funds in this prospectus
J.P. Morgan .......................................................... 10
J.P. Morgan Institutional Service Money Market Funds ................. 10
The spectrum of money market funds ................................... 10
Who may want to invest ............................................... 10
Money market investment process ...................................... 11
12 | YOUR INVESTMENT
Investing in the J.P. Morgan Institutional
Service Money Market Funds
Investing through a service organization ............................. 12
Account and transaction policies ..................................... 12
Dividends and distributions .......................................... 12
Tax considerations ................................................... 13
14 | FUND DETAILS
More about the funds'
business operations
Master/feeder structure .............................................. 14
Management and administration ........................................ 14
Financial highlights ................................................. 16
FOR MORE INFORMATION ............................................back cover
J.P. MORGAN INSTITUTIONAL SERVICE
PRIME MONEY MARKET FUND
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND)
[GRAPHIC] GOAL
The fund's goal is to maximize current income consistent with the
preservation of capital and same-day liquidity. This goal can be changed only
with shareholder approval.
[GRAPHIC] INVESTMENT APPROACH
Principal Strategies
The fund looks for investments across a broad spectrum of U.S.
dollar-denominated money market securities, typically emphasizing different
types of securities at different times in order to take advantage of changing
yield differentials. The fund's investments may include obligations issued by
the U.S. Treasury, government agencies, domestic and foreign banks and
corporations, foreign governments, repurchase agreements, as well as
asset-backed securities, taxable municipal obligations, and other money market
instruments. Some of these investments may be illiquid or purchased on a
when-issued or delayed delivery basis.
The fund's yield will vary in response to changes in interest rates. How well
the fund's yield compares to the yields of similar money market funds will
depend on the success of the investment process described on page 11.
Principal Risks
As with all money market funds, the fund's investments are subject to various
risks, which, while generally considered to be minimal, could cause its share
price to fall below $1. For example, the issuer or guarantor of a portfolio
security or the counterparty to a contract could default on its obligation. An
unexpected rise in interest rates could also lead to a loss in share price if
the fund is near the maximum allowable dollar weighted average maturity
(currently not to exceed 90 days) at the time. To the extent that the fund
invests in foreign securities, the fund could lose money because of foreign
government actions, political instability, or lack of adequate and accurate
information. Also, the fund may have difficulty valuing its illiquid holdings
and may be unable to sell them at the time or price it desires. While these
possibilities exist, the fund's investment process and management policies are
designed to minimize the likelihood and impact of these risks. To date, through
this process, the fund's share price has never deviated from $1.
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. Although the fund seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in the fund.
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
more than $700 billion, including more than $____ billion using similar
strategies as the fund.
The advisor uses a team of portfolio managers and traders to manage the fund.
The portfolio management team is led by John Donohue, vice president, who has
been on the team since joining J.P. Morgan in June of 1997 from Goldman Sachs &
Co., where he was an Institutional Money Market Portfolio Manager; and Mark
Settles, vice president, who has been on the team since November 1999 and has
been at J.P. Morgan since 1994. Prior to managing this fund, Mr. Settles was a
fixed income trader on J.P. Morgan's New York and London trading desks. The
traders on the team are Donald Clemmenson, vice president, who has been on the
team since its inception; Gunter Heiland, vice president, who has been on the
team since joining J.P. Morgan in June of 1997 from Salomon Brothers, where he
was a sales assistant; and Kimberly Weil, who has been on the team since its
inception.
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Before you invest
Investors considering these funds should understand that:
o There is no assurance that these funds will meet their investment goals
o These funds do not represent complete investment programs
2 | J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND
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PERFORMANCE(1) (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Service Prime Money Market Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's(1) shares from year to year for each of the last ten calendar
years.
The table indicates some of the risks by showing the fund's average annual
returns for the past one year, five years and ten years.
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),(2)
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[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
Service Prime
Money Market Fund(1)
--------------------
1991 6.07
1992 3.67
1993 2.83
1994 3.95
1995 5.79
1996 5.21
1997 5.41
1998 5.30
1999 4.94
2000 6.17
o J.P. Morgan Institutional Service Prime Money Market Fund(1)
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 1.72% (for the quarter ended 3/31/91); and the
lowest quarterly return was 0.69% (for the quarter ended 6/30/93).
PERFORMANCE (unaudited)
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Average annual total return (%) Shows performance over time, for
periods ended December 31, 2000(1)
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Past 1 yr. Past 5 yrs. Past 10 yrs.
J.P. Morgan Institutional Service Prime
Money Market Fund (after expenses) 6.17 5.40 4.93
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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 0.11
Distribution (Rule 12b-1) fees None
Service fees(4) 0.25
Other expenses 0.13
- ---------------------------------------------
Total operating expenses 0.49
Fee waiver and
expense reimbursement(5) 0.04
=============================================
Net expenses(5) 0.45
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Expense example(5)
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The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 46 153 270 612
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(1) The fund commenced operations on 10/23/97, and returns reflect the
performance of the fund from 11/1/97 forward. For the period from 8/1/93
through 10/31/97, returns reflect the performance of the J.P. Morgan Prime
Money Market Fund, a separate feeder fund investing in the same master
portfolio. For the period from 1/1/91 through 7/31/93, returns reflect the
performance of The Pierpont Money Market Fund, the predecessor to the J.P.
Morgan Prime Money Market Fund. The returns of these predecessor funds
reflect lower operating expenses than those of the fund. Therefore, these
returns may be higher than the fund's would have been had it existed
during the same period.
(2) The fund's fiscal year end is 11/30.
(3) The fund has a master/feeder structure as described on page 14. 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) Service Organizations (described on page 12) 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.
(5) Reflects an agreement 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 0.45% (excluding interest,
taxes and extraordinary expenses) of the fund's average daily net assets
through 2/28/02.
J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND | 3
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY
MARKET FUND | TICKER SYMBOL: JPMXX
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY
MARKET FUND)
[GRAPHIC] GOAL
The fund's goal is to provide high current income consistent with the
preservation of capital and same-day liquidity. This goal can be changed without
shareholder approval.
[GRAPHIC] INVESTMENT APPROACH
Principal Strategies
The fund purchases securities that offer the highest credit quality and provide
regular income. It invests primarily in U.S. Treasury obligations and repurchase
agreements collateralized by these obligations. Some of these investments may be
purchased on a when-issued or delayed delivery basis. The fund may also invest
in certain bank obligations when Treasury obligations or repurchase agreements
are temporarily unavailable to the fund.
The fund's yield will vary in response to changes in interest rates. How well
the fund's yield compares to the yields of similar money market funds will
depend on the success of the investment process described on page 11.
The portion of the fund's income derived from direct investments in U.S.
Treasury obligations may be exempt from state and local personal income taxes.
Principal Risks
While the fund's U.S. Treasury obligations are backed by the full faith and
credit of the federal government, investors should bear in mind that any
repurchase agreements the fund may hold do not have this guarantee (even though
they are fully collateralized by Treasuries), and that in any case, government
guarantees do not extend to shares of the fund itself.
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. Although the fund seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in the fund.
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
more than $700 billion, including more than $____ billion using similar
strategies as the fund.
The advisor uses a team of portfolio managers and traders to manage the fund.
The portfolio management team is led by John Donohue, vice president, who has
been on the team since its inception, after joining J.P. Morgan in June of 1997
from Goldman Sachs & Co., where he was an Institutional Money Market Portfolio
Manager; and Mark Settles, vice president, who has been on the team since
November 1999 and has been at J.P. Morgan since 1994. Prior to managing this
fund, Mr. Settles was a fixed income trader on J.P. Morgan's New York and London
trading desks. The traders on the team are Donald Clemmenson, vice president,
Gunter Heiland, vice president, and Kimberly Weil, each of whom has been on the
team since its inception. Prior to joining J.P. Morgan, Mr. Heiland was a sales
assistant at Salomon Brothers.
- --------------------------------------------------------------------------------
Before you invest
Investors considering these funds should understand that:
o There is no assurance that these funds will meet their investment goals
o These funds do not represent complete investment programs
4 | J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET 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 Service Treasury Money Market 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 three calendar
years.
The table indicates some of the risks by showing the fund's average annual
returns for the past one year and life of the fund.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
- ----------------
Total return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
Service Treasury
Money Market Fund
-----------------
1998 5.14
1999 4.64
2000 5.91
For the period covered by this total return chart, the fund's highest quarterly
return was 1.53% (for the quarter ended 12/31/00); and the lowest quarterly
return was 1.08% (for the quarter ended 3/31/99).
PERFORMANCE (unaudited)
- -------------------------------
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 Service Treasury
Money Market Fund (after expenses) 5.91 5.26
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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 0.19
Distribution (Rule 12b-1) fees None
Service fees(4) 0.25
Other expenses 0.16
- ---------------------------------------------
Total operating expenses 0.60
Fee waiver and
expense reimbursement(5) (0.15)
=============================================
Net expenses(5) 0.45
- ---------------------------------------------
- --------------------------------------------------------------------------------
Expense example(5)
- --------------------------------------------------------------------------------
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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 46 177 320 736
- --------------------------------------------------------------------------------
(1) The fund's fiscal year end is 10/31.
(2) The fund commenced operations on 7/7/97 and performance is calculated as
of 7/31/97.
(3) The fund has a master/feeder structure as described on page 14. 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) Service Organizations (described on page 12) 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.
(5) Reflects an agreement 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 0.45% (excluding interest,
taxes and extraordinary expenses) of the fund's average daily net assets
through 2/28/02.
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND | 5
J.P. MORGAN INSTITUTIONAL SERVICE
FEDERAL MONEY MARKET FUND
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REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL SERVICE FEDERAL MONEY MARKET FUND)
[GRAPHIC] GOAL
The fund's goal is to provide high current income consistent with the
preservation of capital and same-day liquidity. This goal can be changed only
with shareholder approval.
[GRAPHIC] INVESTMENT APPROACH
Principal Strategies
The fund purchases securities that offer very high credit quality and pay
regular income that is generally free from state and local income taxes. It
invests exclusively in U.S. government agency obligations such as the Federal
Farm Credit Bank, the Tennessee Valley Authority, the Federal Home Loan Bank,
the Student Loan Marketing Association, and in obligations of the U.S. Treasury.
Some of these investments may be purchased on a when-issued or delayed delivery
basis.
The fund's yield will vary in response to changes in interest rates. How well
the fund's yield compares to the yields of similar money market funds will
depend on the success of the investment process described on page 11.
Principal Risks
While the fund's U.S. Treasury obligations are backed by the full faith and
credit of the Government, investors should bear in mind that any agency
obligations the fund may hold do not have this guarantee, and that in any case
government guarantees do not extend to shares of the fund itself.
Most of the fund's income is generally exempt from state and local personal
income taxes and from some corporate income taxes (although not federal income
taxes). Because of this beneficial tax status, the fund's yields are generally
lower than those of taxable money market funds when compared on a pre-tax basis.
As with all money market funds, the fund's investments are subject to various
risks, which, while generally considered to be minimal, could cause its share
price to fall below $1. For example, the issuer or guarantor of a portfolio
security could default on its obligation. An unexpected rise in interest rates
could also lead to a loss in share price if the fund is near the maximum
allowable dollar weighted average maturity (currently not to exceed 90 days) at
the time. However, the fund's investment process and management policies are
designed to minimize the likelihood and impact of these risks. To date, through
this process, the fund's share price has never deviated from $1.
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. Although the fund seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in the fund.
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
more than $700 billion, including more than $____ billion using similar
strategies as the fund.
The advisor uses a team of portfolio managers and traders to manage the fund.
The portfolio management team is led by John Donohue, vice president, who has
been on the team since joining J.P. Morgan in June of 1997 from Goldman Sachs &
Co., where he was an Institutional Money Market Portfolio Manager; and Mark
Settles, vice president, who has been on the team since November 1999 and has
been at J.P. Morgan since 1994. Prior to managing this fund, Mr. Settles was a
fixed income trader on J.P. Morgan's New York and London trading desks. The
traders on the team are Donald Clemmenson, vice president, who has been on the
team since its inception; Gunter Heiland, vice president, who has been on the
team since joining J.P. Morgan in June of 1997 from Salomon Brothers, where he
was a sales assistant; and Kimberly Weil, who has been on the team since joining
J.P. Morgan in April of 1993.
- --------------------------------------------------------------------------------
Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goal.
o The fund does not represent a complete investment program.
6 | J.P. MORGAN INSTITUTIONAL SERVICE FEDERAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Service Federal Money Market Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's(1) shares from year to year for each of the last seven calendar
years.
The table indicates some of the risks by showing the fund's average annual
returns for the past one year, five years and life of the fund.
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),(2)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
Service Federal
Money Market Fund(1)
--------------------
1994 3.78
1995 5.59
1996 4.99
1997 5.18
1998 5.21
1999 4.79
2000 6.01
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 1.55% (for the quarter ended 9/30/00); and the
lowest quarterly return was 0.67% (for the quarter ended 3/31/94).
PERFORMANCE (unaudited)
- -------------------------------
Average annual total return (%) Shows performance over time, for
periods ended December 31, 2000(1)
- --------------------------------------------------------------------------------
Past 1 yr. Past 5 yrs. Life of fund
J.P. Morgan Institutional Service Federal
Money Market Fund 6.01 5.23 4.78
- --------------------------------------------------------------------------------
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 0.13
Distribution (Rule 12b-1) fees None
Service fees(4) 0.25
Other expenses 0.22
- ---------------------------------------------
Total operating expenses 0.60
Fee waiver and
expense reimbursement(5) 0.15
=============================================
Net expenses(5) 0.45
- ---------------------------------------------
- --------------------------------------------------------------------------------
Expense example(5)
- --------------------------------------------------------------------------------
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:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 46 177 320 736
- --------------------------------------------------------------------------------
(1) The fund commenced operations on 11/6/97, and returns reflect the
performance of the fund from 12/1/97 forward. For the period 1/31/93 to
11/30/97, returns reflect the performance of J.P. Morgan Federal Money
Market Fund, a separate feeder fund investing in the same master
portfolio, with lower operating expenses than those of the fund.
Therefore, these returns may be higher than the fund's would have been had
it existed during the same period.
(2) The fund's fiscal year end is 10/31.
(3) The fund has a master/feeder structure as described on page 14. 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) Service Organizations (described on page 12) 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 investment.
(5) Reflects an agreement 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 0.45% (excluding interest,
taxes and extraordinary expenses) of the fund's average daily net assets
through 2/28/02.
J.P. MORGAN INSTITUTIONAL SERVICE FEDERAL MONEY MARKET FUND | 7
J.P. MORGAN INSTITUTIONAL SERVICE
TAX EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL SERVICE TAX EXEMPT MONEY
MARKET FUND)
[GRAPHIC] GOAL
The fund's goal is to maximize current income that is exempt from federal
income tax consistent with the preservation of capital and same-day liquidity.
This goal can be changed only with shareholder approval.
[GRAPHIC] INVESTMENT APPROACH
Principal Strategies
The fund invests primarily in high quality municipal obligations whose
income is exempt from federal income taxes. The fund's municipal obligations
must fall into the highest short-term rating category (top two highest
categories for New York State obligations) or be of equivalent quality. The fund
may also invest in certain structured municipal obligations, and in certain
municipal or other obligations whose income is subject to tax, including the
alternative minimum tax. Although the fund is permitted to hold these other
obligations or cash, it aims to be fully invested in municipal obligations. In
order to maintain liquidity, the fund may buy securities with puts that allow
the fund to liquidate the securities on short notice. Some of the fund's
securities may be purchased on a when-issued or delayed delivery basis.
The fund's yield will vary in response to changes in interest rates. How well
the fund's yield compares to the yields of similar money market funds will
depend on the success of the investment process described on page 11.
The fund's income is generally exempt from federal income taxes. A small portion
may be exempt from state or local income taxes.
Principal Risks
As with all money market funds, the fund's investments are subject to various
risks, which, while generally considered to be minimal, could cause its share
price to fall below $1. For example, the issuer or guarantor of a portfolio
security or the counterparty to a contract could default on its obligation. An
unexpected rise in interest rates could also lead to a loss in share price if
the fund is near the maximum allowable dollar weighted average maturity
(currently not to exceed 90 days) at the time. However, the fund's investment
process and management policies are designed to minimize the likelihood and
impact of these risks. To date, through this process, the fund's share price has
never deviated from $1.
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. Although the fund seeks to preserve the value of your investment at $1
per share, it is possible to lose money by investing in the fund.
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
more than $700 billion, including more than $____ billion using similar
strategies as the fund.
The advisor uses a team of portfolio managers and traders to manage the fund.
The portfolio team is composed of John Donohue, vice president, who has been on
the team since joining J.P. Morgan in June of 1997 from Goldman Sachs & Co.,
where he was an Institutional Money Market Portfolio Manage; Abigail J. Feder,
vice president, who joined J.P. Morgan in April of 2000 from Morgan Stanley Dean
Witter Investment Management, where she managed short term fixed income
portfolios; Benjamin Thompson, vice president, who joined J.P. Morgan in June of
1999 from Goldman Sachs, where he was a senior fixed income portfolio manager;
Gunter Heiland, vice president, who has been on the team since joining J.P.
Morgan in June of 1997 from Salomon Brothers, where he was a sales assistant;
James Ahn, associate, who joined J.P. Morgan in June of 1996 from
PricewaterhouseCoopers, LLP and has been on the team since June of 2000; and
Kimberly Weil, associate, who has been on the team since its inception.
- --------------------------------------------------------------------------------
Before you invest
Investors considering the fund should understand that:
o There is no assurance that the fund will meet its investment goal.
o The fund does not represent a complete investment program.
8 | J.P. MORGAN INSTITUTIONAL SERVICE TAX EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
PERFORMANCE(1) (unaudited)
The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Service Tax Exempt Money Market Fund.
The bar chart indicates some of the risks by showing changes in the performance
of the fund's(1) shares from year to year for each of the last ten calendar
years.
The table indicates some of the risks by showing the fund's average annual
returns for the past one year, five years and ten years.
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),(2)
- --------------------------------------------------------------------------------
[The following table was depicted as a bar chart in the printed material.]
J.P. Morgan
Institutional
Service Tax Exempt
Money Market Fund(1)
--------------------
1991 4.16
1992 2.71
1993 2.04
1994 2.50
1995 3.52
1996 3.12
1997 3.26
1998 3.49
1999 2.89
2000 3.71
For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 1.17% (for the quarter ended 3/31/98); and the
lowest quarterly return was 0.47% (for the quarter ended 3/31/94).
PERFORMANCE (unaudited)
- -------------------------------
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 Institutional Service Tax
Exempt Money Market Fund 3.71 3.29 3.14
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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 0.14
Distribution (Rule 12b-1) fees None
Service fees(4) 0.25
Other expenses 0.31
- ---------------------------------------------
Total operating expenses 0.70
Fee waiver and
expense reimbursement(5) 0.25
=============================================
Net expenses(5) 0.45
- ---------------------------------------------
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Expense example(5)
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The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/01 through 2/28/02 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.
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1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 46 199 365 847
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(1) The fund commenced operations on 11/4/97, and returns reflect the
performance of the fund from 12/1/97 forward. For the period 8/1/93 to
11/30/97, returns reflect the performance of J.P. Morgan Tax Exempt Money
Market Fund, a separate feeder fund investing in the same master
portfolio. For the period 1/1/91 to 7/31/93 returns reflect performance of
The Pierpont Tax Exempt Money Market Fund, the predecessor of the J.P.
Morgan Tax Exempt Money Market Fund. The returns of these predecessor
funds reflect lower operating expenses than those of the fund. Therefore,
these returns may be higher than the fund's would have been had it existed
during the same period.
(2) The fund's fiscal year end is 11/30. Prior to 1999, the fund's fiscal year
end was 8/31.
(3) The fund has a master/feeder structure as described on page 14. 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) Service Organizations (described on page 12) 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.
(5) Reflects an agreement 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 0.45% (excluding interest,
taxes and extraordinary expenses) of the fund's average daily net assets
through 2/28/02.
J.P. MORGAN INSTITUTIONAL SERVICE TAX EXEMPT MONEY MARKET FUND | 9
MONEY MARKET MANAGEMENT APPROACH
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J.P. MORGAN
Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan Chase is the asset management choice for many of the
world's most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan Chase employs approximately ___ research
analysts, capital market researchers, portfolio managers and traders around the
world and has more than $700 billion in assets under management, including
assets managed by the fund's advisor, J.P. Morgan Investment Management Inc.
J.P. MORGAN INSTITUTIONAL SERVICE MONEY MARKET FUNDS
Each of these funds invests in high-quality short-term debt securities by
investing through a master portfolio (another fund with the same goal). Each
fund accrues dividends daily, pays them to shareholders monthly, and seeks to
maintain a stable $1 share price.
THE SPECTRUM OF MONEY MARKET FUNDS
The funds described in this prospectus differ primarily in the types of
securities they hold and in the tax status of the income they offer. The table
below provides an overview of the main types of securities in which each fund
may invest. The distinguishing features of each money market fund are described
in more detail on the preceding pages.
- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST
The funds are designed for investors who:
o want an investment that strives to preserve capital
o want regular income from a high quality portfolio
o want a highly liquid investment
o are looking for an interim investment
o are pursuing a short-term goal
o are seeking income that is generally exempt from state and local income
taxes (in the case of Federal Money Market Fund) or exempt from federal
income tax (in the case of Tax Exempt Money Market Fund)
The funds are not designed for investors who:
o are investing for long-term growth
o are investing for high income
o require the added security of the FDIC insurance
o in the case of Tax Exempt Money Market Fund, are investing through an IRA
or other tax-advantaged retirement plan
MONEY MARKET FUNDS AND STABILITY
Money market funds are subject to a range of federal regulations designed to
promote stability. For example, money market funds must maintain a weighted
average maturity of no more than 90 days, and generally may not invest in any
securities with a remaining maturity of more than 13 months. Keeping the
weighted average maturity this short helps funds in their pursuit of a stable $1
share price.
- --------------------------------------------------------------------------------
Primary investments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Service Service Service Service
Prime Treasury Federal Tax Exempt
Money Market Money Market Money Market Money Market
- --------------------------------------------------------------------------------
U.S. Treasuries* o o o
- --------------------------------------------------------------------------------
U.S. government
agency
instruments o o*
- --------------------------------------------------------------------------------
Domestic &
foreign bank
obligations o
- --------------------------------------------------------------------------------
Domestic &
foreign
short-term
corporate
obligations o
- --------------------------------------------------------------------------------
Foreign
governments o
- --------------------------------------------------------------------------------
Illiquid holdings o
- --------------------------------------------------------------------------------
Repurchase
agreements and
reverse repurchase
agreements o o
- --------------------------------------------------------------------------------
Tax-exempt
municipal
obligations** o
* Income is generally exempt from state and local income taxes
** Income is generally exempt from federal income taxes
10 | MONEY MARKET MANAGEMENT APPROACH
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MONEY MARKET 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,
emphasizes investment quality through in-depth research of short-term securities
and their issuers. This allows each fund to focus on providing current income
without compromising share price stability.
In researching short-term securities, J.P. Morgan's credit analysts enhance the
data furnished by rating agencies by drawing on the insights of J.P. Morgan's
fixed income trading specialists and equity analysts. Only securities highly
rated by independent rating agencies as well as J.P. Morgan's proprietary
ratings system are considered for investment.
In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process that combines maturity determination, sector allocation and
fundamental research for identifying portfolio securities:
[GRAPHIC]
J.P. Morgan uses a disciplined process to control
each fund's sensitivity
to interest rates
Maturity determination Based on analysis of a range of factors, including
current yields, economic forecasts, and anticipated fiscal and monetary
policies, J.P. Morgan establishes the desired dollar weighted average maturity
for each fund within the permissible 90-day range. Controlling weighted average
maturity allows the funds to manage risk, since securities with shorter
maturities are typically less sensitive to interest rate shifts than those with
longer maturities.
[GRAPHIC]
The funds invest across different
sectors for diversification and to
take advantage of yield spreads
Sector allocation Analysis of the yields available in different sectors of the
short-term debt market allows J.P. Morgan to adjust each fund's sector
allocation, with the goal of enhancing current income while also maintaining
diversification across permissible sectors.
[GRAPHIC]
Each fund selects its securities as described earlier
in this prospectus
Security selection Based on the results of the firm's credit research and each
fund's maturity determination and sector allocation, the portfolio managers and
dedicated fixed-income traders make buy and sell decisions according to each
fund's goal and strategy.
MONEY MARKET MANAGEMENT APPROACH | 11
YOUR INVESTMENT
- --------------------------------------------------------------------------------
INVESTING THROUGH A SERVICE ORGANIZATION
Prospective investors may only purchase shares of each 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 a fund
by a service organization is $10,000,000 and for additional investments $25,000,
although these minimums may be less for some investors. Service organizations
may provide the following services in connection with their customers'
investments in the funds:
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 days and NAV calculations The funds' regular business days are the same
as those of the New York Stock Exchange. The Service Prime Money Market Fund and
Service Treasury Money Market Fund calculate their NAV every business day at
5:00 p.m. eastern time. The Service Federal and Service Tax Exempt Money Market
Funds calculate their net asset value per share (NAV) every business day at 4:00
p.m. eastern time.
Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Purchase and redemption orders for
each fund must be received at the times indicated in the table below:
Fund Cut-off Time
Service Prime Money Market 5:00 p.m.
Service Treasury Money Market 5:00 p.m.
Service Federal Money Market 2:00 p.m.
Service Tax Exempt Money Market 12:00 noon
For the purchase to be effective and dividends to be earned on the same day,
immediately available funds must be received by a fund by its close of business
on that day. Service organizations will be responsible for transmitting accepted
orders and payments to the funds within the time period agreed upon by them. 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.
Redemption orders for each fund received by the respective cut-off times will be
paid in immediately available funds, normally on the same day, according to
instructions on file.
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
Substantially all income dividends are declared daily and paid monthly. If all
of an investor's shares are redeemed during the month, accrued but unpaid
dividends are paid with
12 | YOUR INVESTMENT
- --------------------------------------------------------------------------------
the redemption proceeds. Shares of the funds earn dividends on the business day
their purchase is effective, but not on the business day their redemption is
effective.
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. The transactions
below typically create the following tax liabilities:
- --------------------------------------------------------------------------------
Transaction Tax status
Income dividends from Prime Ordinary income
Money Market, Treasury Money
Market and Federal Money
Market Funds
Income dividends from Tax Generally exempt from federal
Exempt Money Market Fund income taxes
Short-term capital gains Ordinary income
distributions
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 | 13
FUND DETAILS
- --------------------------------------------------------------------------------
MASTER/FEEDER STRUCTURE
As noted earlier, each fund 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 0.20% of the first $1 billion of
each master portfolio's average
net assets plus 0.10% over
$1 billion
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%
over $7 billion
Shareholder services 0.05% of each fund's
average net assets
Each fund has a service plan which allows it to pay service organizations up to
0.25% of the average net assets of the shares held in the name of the service
organization.
J.P. Morgan may also pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.
14 | FUND DETAILS
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THIS PAGE IS LEFT BLANK INTENTIONALLY
| 15
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FINANCIAL HIGHLIGHTS
The financial tables are intended to help you understand each fund's financial
performance for the past periods indicated. Certain information reflects
financial results for a single fund share. The total returns in the tables
represent the rate that an investor would have earned (or lost) on an investment
in a fund (assuming reinvestment of all dividends and distributions). Except
where noted, this information has been audited by PricewaterhouseCoopers LLP,
whose reports, along with each fund's financial statements, are included in the
respective fund's annual report, which are available upon request.
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND
- ---------------------------
Per-share data For fiscal periods ended 11/30/97(1) 11/30/98 11/30/99 11/30/00
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) (0.01) 0.05 0.05 0.06
Net realized gain (loss) on investment ($) (0.0)(2) (0.00)(2) (0.00)(2) 0.00(2)
==============================================================================================================================
Total from investment operations ($) (0.01) 0.05 0.05 0.06
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.01) (0.05) (0.05) (0.06)
Net realized gain ($) -- (0.00)(2) -- --
==============================================================================================================================
Total distributions to shareholders ($) (0.01) (0.05) (0.05) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%) 0.57(3) 5.35 4.89 6.10
- ------------------------------------------------------------------------------------------------------------------------------
- ---------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 384 470,863 1,490,731 2,367,857
- ------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.45(4) 0.45 0.45 0.45
----------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 5.28(4) 5.17 4.78 5.99
----------------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 35.55(4),(5) 0.56 0.51 0.49
----------------------------------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 10/23/97.
(2) Less than $0.005.
(3) Not annualized.
(4) Annualized.
(5) Not representative of ongoing reimbursement ratio since period covers less
than two months.
================================================================================
J.P. MORGAN INSTITUTIONAL SERVICE TREASURY MONEY MARKET FUND
- ---------------------------
Per-share data For fiscal periods ended 10/31/97(1) 10/31/98 10/31/99 10/31/00
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.02 0.05 0.05 0.06
Net realized gain (loss) on investment ($) 0.00(2) (0.00)(2) (0.00)(2) 0.00(2)
================================================================================================================================
Total from investment operations ($) 0.02 0.05 0.05 0.06
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.02) (0.05) (0.05) (0.06)
Net realized gain ($) (0.00)(2) (0.00)(2) -- --
================================================================================================================================
Total distributions to shareholders ($) (0.02) (0.05) (0.05) (0.06)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------------------------
Total return (%) 1.71(3) 5.27 4.59 5.71
- --------------------------------------------------------------------------------------------------------------------------------
- ---------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 35,983 471,279 812,901 370,969
- --------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.28(4) 0.37 0.45 0.45
------------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 5.29(4) 5.11 4.52 5.47
------------------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 1.71(4) 0.66 0.59 0.60
------------------------------------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 7/7/97.
(2) Less than $0.005.
(3) Not annualized.
(4) Annualized.
16 | FUND DETAILS
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================================================================================
J.P. MORGAN INSTITUTIONAL SERVICE FEDERAL MONEY MARKET FUND
- ---------------------------
Per-share data For fiscal periods ended 10/31/98(1) 10/31/99 10/31/00
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.05 0.05 0.06
Net realized gain (loss) on investment ($) (0.00)(2) (0.00)(2) 0.00
===================================================================================================
Total from investment operations ($) 0.05 0.05 0.06
- ---------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.05) (0.05) (0.06)
Net realized gain -- (0.00)(2) --
===================================================================================================
Total distributions to shareholders ($) (0.05) (0.05) (0.06)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------
Total return (%) 5.24(3) 4.70 5.84
- ---------------------------------------------------------------------------------------------------
- ---------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 29,459 9,194 247,735
- ---------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.45(4) 0.45 0.45
-------------------------------------------------------------------------------------------------
Net investment income (%) 5.07(4) 4.54 6.03
-------------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 1.32(4) 0.78 0.60
-------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 11/5/97.
(2) Less than 0.0005.
(3) Not annualized.
(4) Annualized.
================================================================================
J.P. MORGAN INSTITUTIONAL SERVICE TAX EXEMPT MONEY MARKET FUND
For the three
- --------------------------- months ended
Per-share data For fiscal periods ended 8/31/98 8/31/99 11/30/99 11/30/00
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ($) 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.03 0.03 0.01 0.04
Net realized gain (loss) on investment ($) (0.00)(2) 0.00(2) (0.00)(2) (0.00)(2)
=================================================================================================================================
Total from investment operations ($) 0.03 0.03 0.01 0.04
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.03) (0.03) (0.01) (0.04)
=================================================================================================================================
Net asset value, end of period ($) 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) 2.80(3) 2.78 0.76(3) 3.68
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 8,237 8,319 5,425 40,324
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%) 0.60(4) 0.48 0.45(4) 0.45
-------------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 2.95(4) 2.66 3.04(4) 3.69
-------------------------------------------------------------------------------------------------------------------------------
Expenses without
reimbursement (%) 5.83(4) 1.13 1.64(4) 0.70
-------------------------------------------------------------------------------------------------------------------------------
(1) The fund commenced operations on 11/4/97.
(2) Less than $0.005.
(3) Not annualized.
(4) Annualized.
FUND DETAILS | 17
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FOR MORE INFORMATION
- --------------------------------------------------------------------------------
For investors who want more information on these funds, the following documents
are available free upon request:
Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.
Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.
Copies of the current versions of these documents, along with other information
about the 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 Service Prime Money Market Fund .......... 811-07342 and 033-54642
J.P. Morgan Institutional Service Treasury Money Market Fund ....... 811-07342 and 033-54642
J.P. Morgan Institutional Service Federal Money Market Fund ........ 811-07342 and 033-54642
J.P. Morgan Institutional Service Tax Exempt Money Market 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
IMPR16 03/01