PROSPECTUS AUGUST , 2001
SUBJECT TO COMPLETION, DATED MAY 11, 2001
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell nor does it seek an offer to buy these securities in any state where the
offer or sale is not permitted.
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JP MORGAN MONEY MARKET FUNDS
THIS PROSPECTUS OFFERS: CASH MANAGEMENT SHARES
PRIME MONEY MARKET FUND
THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
[LOGO]
JPMORGAN FLEMING
ASSET MANAGEMENT
rhp-5349
Prime Money Market Fund ..............................1
Who May Want to Invest ...............................5
The Fund's Management and Administration .............6
How Your Account Works ...............................7
Buying Fund Shares ...................................7
Selling Fund Shares ..................................8
Other Information Concerning the Funds ...............8
Distributions and Taxes ..............................9
What the Terms Mean .................................11
How To Reach Us .............................Back cover
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JPMORGAN PRIME MONEY MARKET FUND
THE FUND'S OBJECTIVE
The Fund aims to provide the highest possible level of current income while
still maintaining liquidity and preserving capital.
THE FUND'S MAIN INVESTMENT STRATEGY
The Fund invests in high quality, short-term money market instruments which are
issued and payable in U.S. dollars.
The Fund principally invests in:
- - high quality commercial paper and other short-term debt securities,
including floating and variable rate demand notes of U.S. and foreign
corporations
- - debt securities issued or guaranteed by qualified banks. These are:
- U.S. banks with more than $1 billion in total assets, and foreign
branches of these banks
- foreign banks with the equivalent of more than $10 billion in total
assets and which have branches or agencies in the U.S.
- other U.S. or foreign commercial banks which the Fund's adviser
judges to have comparable credit standing
- - securities issued or guaranteed by the U.S. Government, its agencies or
authorities
- - asset-backed securities
- - repurchase agreements
The dollar weighted average maturity of the Fund will generally be 60 days or
less and the Fund will buy only those instruments which have remaining
maturities of 397 days or less.
The Fund may invest any portion of its assets in debt securities issued or
guaranteed by U.S. banks and their foreign branches. These include certificates
of deposit, time deposits and bankers' acceptances.
The Fund invests only in securities issued and payable in U.S. dollars. Each
investment must have the highest possible short-term rating from at least two
national rating organizations, or one such rating if only one organization rates
that security. Alternatively, some securities may have additional third party
guarantees in order to meet the rating requirements mentioned above. If the
security is not rated, it must be considered of comparable quality by the Fund's
adviser.
The Fund seeks to develop an appropriate portfolio by considering the
differences in yields among securities of different maturities, market sectors
and issuers.
The Fund seeks to maintain a net asset value of $1.00 per share.
The Fund may change any of its investment policies (except its investment
objective) without shareholder approval. Shareholders of the Fund are currently
considering a proposal that would allow the Fund to change its investment
objective without shareholder approval.
1
JPMORGAN PRIME MONEY MARKET FUND
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THE MAIN INVESTMENT RISKS
The Fund attempts to keep its net asset value constant, but there's no guarantee
it will be able to do so.
The value of short-term debt securities tends to fall when prevailing interest
rates rise, although they're generally less sensitive to interest rate changes
than longer-term securities.
Repurchase agreements involve some risk to the Fund if the other party does not
live up to its obligations under the agreement.
The Fund's ability to concentrate its investments in the banking industry could
increase risks. The profitability of banks depends largely on the availability
and cost of funds, which can change depending upon economic conditions. Banks
are also exposed to losses if borrowers get into financial trouble and can't
repay their loans.
Investments in foreign banks and other foreign issuers may be riskier than
investments in the United States. That could be, in part, because of difficulty
converting investments into cash, political and economic instability, the
imposition of government controls, or regulations that don't match U.S.
standards.
Although the Fund seeks to be fully invested, it may at times hold some of its
assets in cash. This would hurt the Fund's performance.
[SIDENOTE]
INVESTMENTS IN THE FUND ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH
THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
SECURITIES IN THE FUND'S PORTFOLIO MAY NOT EARN AS HIGH A CURRENT INCOME AS
LONGER TERM OR LOWER-QUALITY SECURITIES.
2
JPMORGAN PRIME MONEY MARKET FUND
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THE FUND'S PAST PERFORMANCE (UNAUDITED)
This section shows the Fund's performance record with respect to the Fund's
Premier Class Shares. Prior to the date of this prospectus, the Fund did not
offer Cash Management Class Shares, which will be introduced as of the date of
this prospectus. The bar chart shows how the performance of the Fund's shares
has varied from calendar year to calendar year over the life of the Fund. This
provides some indication of the risks of investing in the Fund. The table shows
the average annual total returns for the past one year, five years and ten years
(or if less than such periods, the life of the Fund). During these periods, the
actual returns of Cash Management Class Shares would have been lower than shown
because Cash Management Class Shares have higher expenses than Premier Class
Shares.
Past performance does not predict how any class of the Fund will perform in the
future.
The calculations assume that all dividends and distributions are reinvested in
the Fund. Some of the companies that provide services to the Fund have in the
past agreed not to collect some expenses and to reimburse others. Without these
agreements, the performance figures would be lower than those shown.
[CHART]
YEAR-BY-YEAR RETURNS(1),(2)
1994 4.10%
1995 5.66%
1996 5.20%
1997 5.37%
1998 5.32%
1999 4.97%
2000 6.18%
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF 3/31/01 WAS
1.37%
BEST QUARTER 1.59%
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3rd quarter, 2000
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WORST QUARTER 0.75%
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1st quarter, 1994
- ----------------------------------
AVERAGE ANNUAL TOTAL RETURN (%)
Shows performance over time, for periods ended December 31, 2000(1)
LIFE OF
PAST 1 YR. PAST 5 YRS. FUND
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PRIME MONEY MARKET FUND (AFTER EXPENSES) 6.18% 5.41% 5.20%
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(1) PREMIER CLASS SHARES COMMENCED OPERATIONS ON 11/15/93.
(2) THE FUND'S FISCAL YEAR END IS 8/31.
3
JPMORGAN PRIME MONEY MARKET FUND
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ESTIMATED INVESTOR EXPENSES FOR CASH MANAGEMENT SHARES
The estimated expenses of the Cash Management Class before and after
reimbursement are shown below. The Cash Management Class has no sales,
redemption or account fees and generally no exchange fees, although some
institutions may charge you a fee for shares you buy through them.
ESTIMATED ANNUAL OPERATING EXPENSES (%) (EXPENSES THAT ARE
DEDUCTED FROM CASH MANAGEMENT CLASS ASSETS)
SHARE-
DISTRIBUTION HOLDER TOTAL FEE WAIVER
MANAGEMENT (RULE 12B-1) SERVICE OTHER OPERATING AND EXPENSE NET
FEES FEES FEES EXPENSES(3) EXPENSES REIMBURSEMENT(4) EXPENSES(4)
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CASH
MANAGEMENT
CLASS SHARES 0.10% 0.25% 0.50% 0.16% 1.01% 0.04% 0.97%
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EXPENSE EXAMPLE(4) The example below is intended to help you compare the cost of
investing in the Cash Management Class with the cost of investing in other
mutual funds. The example assumes:
- - $10,000 initial investment
- - 5% return each year
- - net expenses for three years and total operating expenses thereafter, and
- - all shares sold at the end of each time period.
The example is for comparison only; the actual return of the Cash Management
Class and your actual costs may be higher or lower.
1 YR. 3 YRS.
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YOUR COST ($) 99 309
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(3) "OTHER EXPENSES" ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL
YEAR.
(4) REFLECTS A WRITTEN AGREEMENT PURSUANT TO WHICH JPMORGAN CHASE AGREES THAT
IT OR ONE OF ITS AFFILIATES WILL REIMBURSE THE FUND TO THE EXTENT TOTAL
OPERATING EXPENSES OF THE CASH MANAGEMENT CLASS (EXCLUDING INTEREST, TAXES,
EXTRAORDINARY EXPENSES AND EXPENSES RELATED TO THE DEFERRED COMPENSATION
PLAN) EXCEED 0.97% OF ITS AVERAGE DAILY NET ASSETS FOR THREE YEARS.
4
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WHO MAY WANT TO INVEST
THE FUND IS DESIGNED FOR INVESTORS WHO:
- - want an investment that strives to preserve capital
- - want regular income from a high quality portfolio
- - want a highly liquid investment
- - are looking for an interim investment
- - are pursuing a short-term goal
THE FUND IS NOT DESIGNED FOR INVESTORS WHO:
- - are investing for long-term growth
- - are investing for high income
- - require the added security of the FDIC insurance
5
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THE FUND'S MANAGEMENT AND ADMINISTRATION
The Fund is a series of Mutual Fund Trust, a Massachusetts business trust. The
trustees of the trust are responsible for overseeing all business activities.
THE FUND'S ADMINISTRATOR
The Chase Manhattan Bank (the Administrator) provides administrative services,
oversees the Fund's other service providers and provides Fund officers. The
Administrator receives the following annual fee on behalf of the Fund for
administrative services:
0.10% of the Fund's pro-rata portion of the first $100 billion of average net
assets of all money market funds in the JPMorgan Funds complex plus 0.05% of
average net assets over $100 billion.
THE FUND'S INVESTMENT ADVISER
J.P. Morgan Fleming Asset Management (USA), Inc. (JPMFAM (USA)) is the
investment adviser to the Fund and makes the day-to-day investment decisions for
the Fund. JPMFAM (USA) is a wholly owned subsidiary of J.P. Morgan Chase & Co.
(JPMorgan Chase), a bank holding company. JPMFAM (USA) is located at 522 5th
Avenue, New York, NY 10036.
Prior to February 28, 2001 the adviser to the Fund was The Chase Manhattan Bank
(Chase). For the fiscal year ended August 31, 2000, Chase was paid management
fees (net of waivers) of 0.10% of the average daily net assets of the Fund.
6
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HOW YOUR ACCOUNT WORKS
BUYING FUND SHARES
You don't pay any sales charge (sometimes called a load) when you buy these
shares in the Fund. The price you pay for your shares is the net asset value
per share (NAV). NAV is the value of everything the Fund owns, minus
everything it owes, divided by the number of shares held by investors. The
Fund seeks to maintain a stable NAV of $1.00. The Fund uses the amortized
cost method to value its portfolio of securities. This method provides more
stability in valuations. However, it may also result in periods during which
the stated value of a security is different than the price the Fund would
receive if it sold the investment.
The NAV of each class of shares is generally calculated by 5:00 p.m. Eastern
time each day the Fund is accepting orders. You'll pay the next NAV calculated
after the JPMorgan Funds Service Center receives your order in proper form. An
order is in proper form only after funds are converted into federal funds.
INVESTING THROUGH A SERVICE ORGANIZATION
Prospective investors may only purchase shares of the Fund with the assistance
of a service organization. Your service organization is paid by the Fund to
assist you in establishing your account, executing transactions, and monitoring
your investment. The minimum amount for initial investments in the 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 Fund:
- - Acting, directly or through an agent, as the sole shareholder of record
- - Maintaining account records for customers
- - Processing orders to purchase, redeem or exchange shares for customers
- - Responding to inquiries from shareholders
- - Assisting customers with investment procedures.
Shares are available on any business day the Federal Reserve Bank of New York
and the New York Stock Exchange are open. If we receive your order by the Fund's
cut-off time, we'll process your order at that day's price and you'll be
entitled to all dividends declared that day. If we receive your order after the
cut-off time, we'll generally process it at the next day's price. Service
organizations will be responsible for transmitting accepted orders and payments
to the Fund by the cut-off time. Normally, the Fund's cut-off (in Eastern time)
is 5:00 p.m.
The service organization could set earlier cut-off times. The Fund may close
earlier a few days each year if the Public Securities Association recommends
that the U.S. Government securities market close trading early.
7
HOW YOUR ACCOUNT WORKS
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You must provide a Taxpayer Identification Number when you open an account.
The Fund has the right to reject any purchase order.
TO OPEN AN ACCOUNT, BUY OR SELL SHARES OR GET FUND INFORMATION, CALL:
THE JPMORGAN FUNDS SERVICE CENTER
1-800-622-4273
Your service organization may charge you a fee and may offer additional
services, such as special purchase redemption programs, "sweep" programs, cash
advances and redemption checks. Your service organization may set different
minimum investments and earlier cut-off times.
SELLING FUND SHARES
When you sell your shares you'll receive the next NAV calculated after the
JPMorgan Funds Service Center accepts your order in proper form. We ask that you
tell us early in the day if you plan to sell your shares so we can effectively
manage the Fund. If you purchase your shares by uncertified check, you cannot
sell those shares until 15 calendar days after your purchase.
We will need the names of the registered shareholders and your account number
before we can sell your shares. We will send the proceeds from the sale to you
on the same day if we receive your request before the Fund's cut-off time. The
money will be sent the next day for requests we receive after this deadline.
Federal law allows the Fund to suspend a sale or postpone payment for more than
seven business days under unusual circumstances.
SELLING SHARES THROUGH YOUR SERVICE ORGANIZATIONS
Tell your service organization that you want to sell shares. They'll send all
necessary documents to the JPMorgan Funds Service Center.
REDEMPTIONS-IN-KIND
The Fund reserves the right to make redemptions of over $250,000 in securities
rather than in cash.
EXCHANGING SHARES
You can exchange your shares for shares in certain other JPMorgan Funds. For
tax purposes, an exchange is treated as a sale of Fund shares. Carefully read
the prospectus of the Fund you want to buy before making an exchange.
You should not exchange shares as a means of short-term trading as this could
increase management costs and affect all shareholders. We reserve the right
to limit the number of exchanges or to refuse an exchange. We may also
terminate this privilege. We charge an administration fee of $5 for each
exchange if you make more than 10 exchanges in a year or three in a quarter.
See the Statement of Additional Information to find out more about the
exchange privilege.
OTHER INFORMATION CONCERNING THE FUNDS
We may close your account if the balance falls below the minimum because
you've sold shares. We may also close the account if you fail to meet the
investment minimum over a twelve-month period. We'll give you 60 days notice
before closing your account.
8
HOW YOUR ACCOUNT WORKS
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Unless you indicate otherwise on your account application, we are authorized to
act on redemption and transfer instructions received by phone. If someone trades
on your account by phone, we'll ask that person to confirm your account
registration and address to make sure they match those you provided us. If they
give us the correct information, we are generally authorized to follow that
person's instructions. We'll take all reasonable precautions to confirm that the
instructions are genuine. Investors agree that they will not hold the Fund
liable for any loss or expenses from any sales request, if the Fund takes
reasonable precautions. The Fund will be liable for any losses to you from an
unauthorized sale or fraud against you if we do not follow reasonable
procedures.
You may not always reach the JPMorgan Funds Service Center by telephone. This
may be true at times of unusual market changes and shareholder activity. You can
mail us your instructions or contact your investment representative or agent. We
may modify or cancel the sale of shares by phone without notice.
J.P. Morgan Fund Distributors, Inc. (JPM) is the distributor for the Fund. It is
a subsidiary of The BISYS Group, Inc. and is not affiliated with JPMorgan Chase.
The Fund has adopted a Rule 12b-1 distribution plan under which it pays to
JPM (and other broker-dealers) annual distribution fees of up to 0.25% of the
average daily net assets attributed to Cash Management Shares.
This payment covers such things as compensation for services provided by
broker-dealers and expenses connected to the sale of shares. Payments are not
tied to actual expenses incurred.
Because 12b-1 expenses 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 other types of sales charges.
The Fund has agreements with certain shareholder servicing agents (including
The Chase Manhattan Bank) under which the shareholder servicing agents have
agreed to provide certain support services to their customers. For performing
these services, each shareholder servicing agent receives an annual fee of up
to 0.50% of the average daily net assets of the Cash Management Shares of the
Fund held by investors serviced by the shareholder servicing agent. The Board
of Trustees has determined that the amount payable for "service fees" (as
defined by the NASD) does not exceed 0.25% of the average annual net assets
attributable to the Cash Management Shares of each Fund.
JPMFAM (USA) and/or JPM may, at their own expense, make additional payments to
certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers.
The Fund may issue multiple classes of shares. This prospectus relates only to
Cash Management Shares of the Fund. Each class may have different requirements
for who may invest, and may have different sales charges and expense levels. A
person who gets compensated for selling Fund shares may receive a different
amount for each class.
DISTRIBUTIONS AND TAXES
The Fund can earn income and can realize capital gain. The Fund deducts
9
HOW YOUR ACCOUNT WORKS
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any expenses and then pays out these earnings to shareholders as distributions.
The Fund declares dividends daily, so your shares can start earning dividends on
the day you buy them. We distribute the dividends monthly in the form of
additional shares, unless you tell us that you want payment in cash or deposited
in a pre-assigned bank account. The taxation of dividends won't be affected by
the form in which you receive them. We distribute any short-term capital gain at
least annually. The Fund does not expect to realize long-term capital gain.
Dividends are usually taxable as ordinary income at the federal, state and
local levels. Dividends earned on bonds issued by the U.S. government and its
agencies may also be exempt from some types of state and local taxes.
If you receive distributions of net capital gain, the tax rate will be based on
how long the Fund held a particular asset, not on how long you have owned your
shares.
Early in each calendar year, the Fund will send you a notice showing the amount
of distributions you received in the preceding year and the tax status of those
distributions.
Any investor for whom the 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.
The above is only a general summary of tax implications of investing in these
Funds. Please consult your tax advisor to see how investing in the Fund will
affect your own tax situation.
10
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WHAT THE TERMS MEAN
COMMERCIAL PAPER: Short-term securities with maturities of 1 to 270 days which
are issued by banks, corporations and others.
DEMAND NOTES: A debt security with no set maturity date. The investor can
generally demand payment of the principal at any time.
DISTRIBUTION FEE: covers the cost of the distribution system used to sell shares
to the public.
DOLLAR WEIGHTED AVERAGE MATURITY: The average maturity of the Fund is the
average amount of time until the organizations that issued the debt securities
in the Fund's portfolio must pay off the principal amount of the debt. "Dollar
weighted" means the larger the dollar value of debt security in the Fund, the
more weight it gets in calculating this average.
FLOATING RATE SECURITIES: Securities whose interest rates adjust automatically
whenever a particular interest rate changes.
LIQUIDITY: Liquidity is the ability to easily convert investments into cash
without losing a significant amount of money in the process.
MANAGEMENT FEE: a fee paid to the investment adviser to manage the Fund and make
decisions about buying and selling the Fund's investments.
MUNICIPAL LEASE OBLIGATIONS: These provide participation in municipal lease
agreements and installment purchase contracts, but are not part of the general
obligations of the municipality.
OTHER EXPENSES: Miscellaneous items, including transfer agency, administration,
custody and registration fees.
REPURCHASE AGREEMENTS: A special type of a short-term investment. A dealer sells
securities to a Fund and agrees to buy them back later for a set price. In
effect, the dealer is borrowing the Fund's money for a short time, using the
securities as collateral.
SHAREHOLDER SERVICE FEE: a fee to cover the cost of paying shareholder servicing
agents to provide certain support services for your account.
VARIABLE RATE SECURITIES: Securities whose interest rates are periodically
adjusted.
11
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HOW TO REACH US
MORE INFORMATION
You'll find more information about the Fund in the following documents:
ANNUAL AND SEMI-ANNUAL REPORTS
Our annual and semi-annual reports contain more information about the Fund's
investments and performance.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information about the Fund and its policies. It
is incorporated by reference into this prospectus. That means, by law, it's
considered to be part of this prospectus.
You can get a free copy of these documents and other information, or ask us any
questions, by calling us at 1-800-622-4273 or writing to:
JPMORGAN FUNDS SERVICE CENTER
P.O. BOX 219392
KANSAS CITY, MO 64121-9392
If you buy your shares through an institution, you should contact that
institution directly for more information. You can also find information online
at www.jpmorganfunds.com on the internet.
You can write or e-mail the SEC's Public Reference Room and ask them to mail you
information about the Fund, including the SAI. They'll charge you a copying fee
for this service. You can also visit the Public Reference Section, and copy the
documents while you're there.
PUBLIC REFERENCE SECTION OF THE SEC
WASHINGTON, DC 20549-0102.
1-202-942-8090
EMAIL: publicinfo@sec.gov
Reports, a copy of the SAI and other information about the Funds is also
available on the SEC's website at http://www.sec.gov.
The Fund's Investment Company Act File No. is 811-08358.
JPMorgan Funds Fulfillment Center
393 Manley Street
West Bridgewater, MA 02379-1039
(C)2001 JPMorgan Chase & Co. All Rights Reserved. March 2001
rhp-5349