As filed with the U.S. Securities and Exchange Commission on August 25, 1998.
Registration Nos. 333-11125 and 811-07795
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 10
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 11
J.P. MORGAN SERIES TRUST
(formerly JPM Series Trust)
(Exact Name of Registrant as Specified in Charter)
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (617) 557-0700
Margaret W. Chambers, c/o Funds Distributor, Inc.
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copy to: Stephen K. West, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
It is proposed that this filing will become effective (check appropriate
box):
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[X] on October 1, 1998 pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
EXPLANATORY NOTE
This post-effective amendment No. 10 to the registration statement of
J.P. Morgan Series Trust (the "Registrant") on Form N-1A is being filed to
update the Registrant's disclosure in the Prospectuses relating to J.P. Morgan
California Bond Fund (the "Fund"), a series of shares of the Registrant, to
update information in the registration statement in order to be in compliance
with revised Form N-1A requirements and plain english prospectus disclosure
requirements.
<PAGE>
OCTOBER 1, 1998 PROSPECTUS
J.P. MORGAN CALIFORNIA BOND FUND
--------------------------
Seeking high total return
by investing primarily in
fixed income securities.
This prospectus contains essential information for anyone investing in the fund.
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 as an investment 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
<PAGE>
CONTENTS
- --------------------------------------------------------------------------------
2
- ---
The fund's goal, investment approach, risks, expenses, and performance
J.P. MORGAN CALIFORNIA BOND FUND
Fund description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investor expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4
- ---
FIXED INCOME MANAGEMENT APPROACH
J.P. Morgan....................................................................4
Who may want to invest.........................................................4
Fixed income investment process. . . . . . . . . . . . . . . . . . . . . . . . 5
6
- ---
Investing in the J.P. Morgan California Bond Fund
YOUR INVESTMENT
Investing through a financial professional . . . . . . . . . . . . . . . . . . 6
Investing directly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Opening your account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Adding to your account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Selling shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Account and transaction policies . . . . . . . . . . . . . . . . . . . . . . . 7
Dividends and distributions. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Tax considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9
- ---
More about risk and the fund's business operations
FUND DETAILS
Business structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Management and administration. . . . . . . . . . . . . . . . . . . . . . . . . 9
Risk and reward elements . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Financial highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
FOR MORE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . back cover
<PAGE>
J.P. MORGAN CALIFORNIA BOND FUND
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN CALIFORNIA BOND FUND:
SELECT SHARES)
[GRAPHIC]
GOAL
The fund's goal is to provide high after-tax total return for California
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.
[GRAPHIC]
INVESTMENT APPROACH
The fund invests primarily in California municipal securities whose income is
free from federal and state personal income taxes for California residents.
Because the fund's goal is high after-tax total return rather than high
tax-exempt income, the fund may invest to a limited extent in securities of
other states or territories. To the extent that the fund invests in municipal
securities of other states, the income from such securities would be free from
federal personal income taxes for California residents but would be subject to
California state personal income taxes. For non-California residents, the income
from California municipal securities is free from federal personal income taxes
only. The fund may also invest in taxable securities. The fund's securities may
be of any maturity, but under normal market conditions the fund's duration will
generally range between three and ten years, similar to that of the Lehman
Brothers 1-16 Year Municipal Bond Index. At least 90% of assets must be invested
in securities that, at the time of purchase, are rated investment-grade (BBB/Baa
or better) or are the unrated equivalent. No more than 10% of assets may be
invested in securities as low as B.
[GRAPHIC]
RISK/RETURN SUMMARY
The fund's share price and total return will vary in response to changes in
interest rates. How well the fund's performance compares to that of similar
fixed income funds will depend on the success of the investment process, which
is described on page 5. Because most of the fund's investments will typically be
from issuers in the State of California, its performance will be affected by the
fiscal and economic health of that state and its municipalities. The fund is
non-diversified and may invest more than 5% of assets in a single issuer, which
could further concentrate its risks. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, it takes on additional
risks, because these bonds are more sensitive to economic news and their issuers
are in less secure financial condition. The fund's investments and their main
risks, as well as fund strategies, are described in more detail on pages 10-12.
Shares in the fund are not bank deposits and are not guaranteed or insured by
any bank, government entity, or the FDIC. The value of the fund's shares will
fluctuate over time. You could lose money if you sell when the fund's share
price is lower than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $8 billion using the same strategy as this fund.
The portfolio management team is led by Robert W. Meiselas, vice president, who
has been at J.P. Morgan since 1987, and Elaine B. Young, vice president, who
joined J.P. Morgan from Scudder, Stevens & Clark, Inc. in 1994 where she was a
municipal bond trader and fixed income portfolio manager. Both have been on the
team since June of 1997.
BEFORE YOU INVEST
Investors considering the fund should understand that:
- - There is no assurance that the fund will meet its investment goal.
- - The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds"), which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.
- - The fund does not represent a complete investment program.
2 J.P. MORGAN CALIFORNIA BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE (UNAUDITED)
The table and bar chart shown below indicate the risks of investing in J.P.
Morgan California Bond Fund.1
The table indicates the risks by showing how the fund's average annual returns
for the past year compare to those of the Lehman Brothers 1-16 Year Municipal
Bond Index. This is a widely recognized, unmanaged index of general obligation
and revenue bonds with maturities of 1-16 years.
The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN (%) Shows performance over time, for period ended December 31, 1997
- -----------------------------------------------------------------------------------------------------------
PAST 1 YR.
<S> <C>
J.P. MORGAN CALIFORNIA BOND FUND: INSTITUTIONAL SHARES(1) (a separate class of shares)(after expenses)7.72
- -----------------------------------------------------------------------------------------------------------
LEHMAN BROTHERS 1-16 YEAR MUNICIPAL BOND INDEX (no expenses) 7.97
- -----------------------------------------------------------------------------------------------------------
</TABLE>
[GRAPH]
<TABLE>
<CAPTION>
TOTAL RETURN (%) Shows changes in returns by calendar year(2)
- -----------------------------------------------------------------------------------------------------------
1997
<S> <C>
J.P. MORGAN CALIFORNIA BOND FUND:INSTITUTIONAL SHARES(1) (a separate class of shares) 7.72
Lehman Brothers 1-16 Year Municipal Bond Index 7.97
</TABLE>
For the period covered by this total return chart, the J.P. Morgan California
Bond Fund:Institutional Shares highest quarterly return was 3.04%(for the
quarter ended 6/30/97); and the lowest quarterly return was -0.34% (for the
quarter ended 3/31/97).
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before 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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES(3) (%)
(expenses that are deducted from fund assets)
- -----------------------------------------------------------
<S> <C>
Management fees 0.30
Marketing (12b-1) fees none
Other expenses(4) 0.70
- -----------------------------------------------------------
TOTAL ANNUAL FUND
OPERATING EXPENSES(4) 1.00
- -----------------------------------------------------------
</TABLE>
EXPENSE EXAMPLE
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
(before reimbursement) unchanged, and all shares sold at the end of each time
period. The example is for comparison only; the fund's actual return and your
actual costs may be higher or lower.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
<S> <C> <C> <C> <C>
YOUR COST($) 102 318 552 1,225
- -----------------------------------------------------------
</TABLE>
(1) The fund commenced operations on 4/21/97 and returns reflect performance of
J.P. Morgan California Bond Fund: Institutional Shares (a separate class of
shares) from 12/31/96 through 12/31/97. Performance during this period
reflects operating expenses which are 0.20% of net assets lower than those
of the fund. Accordingly, performance returns for the fund would have been
lower if an investment had been made in the fund during the same time
period.
(2) The fund's fiscal year end is 4/30. For the period 1/1/98 through 6/30/98,
the total return for J.P. Morgan California Bond Fund: Institutional Shares
was 1.66% and the total return for the index was 2.50%.
(3) This table shows expenses for the past fiscal year before reimbursement,
expressed as a percentage of average net assets.
(4) AFTER REIMBURSEMENT, OTHER EXPENSES AND TOTAL OPERATING EXPENSES FOR THE
PAST FISCAL YEAR WERE 0.35% AND 0.65%, RESPECTIVELY. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.
J.P. MORGAN CALIFORNIA BOND FUND 3
<PAGE>
FIXED INCOME MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
J.P. MORGAN
Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan is the asset management choice for many of the world's
most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan employs over 300 analysts and portfolio managers
around the world and has more than $300 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management Inc.
J.P. MORGAN CALIFORNIA BOND FUND
The J.P. Morgan California Bond Fund invests primarily in bonds and other fixed
income securities.
The fund's investment philosophy, developed by its advisor, emphasizes the
potential for consistently enhancing performance while managing risk.
WHO MAY WANT TO INVEST
The fund is designed for investors who:
- - want to add an income investment to further diversify a portfolio
- - want an investment whose risk/return potential is higher than that of money
market funds but generally less than that of stock funds
- - want an investment that pays monthly dividends
- - are seeking income that is exempt from federal and state personal income
taxes in California
The fund is NOT designed for investors who:
- - are investing for aggressive long-term growth
- - require stability of principal
- - are investing through a tax-deferred account such as an IRA
4 FIXED INCOME MANAGEMENT APPROACH
<PAGE>
- --------------------------------------------------------------------------------
FIXED INCOME INVESTMENT PROCESS
J.P. Morgan seeks to generate an information advantage through the depth of its
global fixed-income research and the sophistication of its analytical systems.
Using a team-oriented approach, J.P. Morgan seeks to gain insights in a broad
range of distinct areas and may take positions in many different ones, helping
the fund to limit exposure to concentrated sources of risk.
In managing the fund, J.P. Morgan employs a three-step process that combines
sector allocation, fundamental research for identifying portfolio securities,
and duration management.
[GRAPHIC]
The fund invests across a range of different types of securities
SECTOR ALLOCATION The sector allocation team meets monthly, analyzing the
fundamentals of a broad range of sectors in which the fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.
[GRAPHIC]
The fund makes its portfolio decisions as described earlier in this prospectus
SECURITY SELECTION Relying on the insights of different specialists, including
credit analysts, quantitative researchers, and dedicated fixed income traders,
the portfolio managers make buy and sell decisions according to the fund's goal
and strategy.
[GRAPHIC]
J.P. Morgan uses a disciplined process to control the fund's sensitivity
to interest rates
DURATION MANAGEMENT Forecasting teams use fundamental economic factors to
develop strategic forecasts of the direction of interest rates. Based on these
forecasts, strategists establish the fund's target duration (a measure of
average weighted maturity of the securities held by the fund and a common
measurement of sensitivity to interest rate movements), typically remaining
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the fund and make tactical
adjustments as necessary.
5 FIXED INCOME MANAGEMENT APPROACH
<PAGE>
YOUR INVESTMENT
- --------------------------------------------------------------------------------
For your convenience, the J.P. Morgan Funds offer several ways to start and add
to fund investments.
INVESTING THROUGH A FINANCIAL PROFESSIONAL
If you work with a financial professional, either at J.P. Morgan or
elsewhere, he or she is prepared to handle your planning and transaction
needs. Your financial professional will be able to assist you in establishing
your fund account, executing transactions, and monitoring your investment. If
your fund investment is not held in the name of your financial professional
and you prefer to place a transaction order yourself, please use the
instructions for investing directly.
INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:
- - Determine the amount you are investing. The minimum amount for initial
investments is $2,500 and for additional investments $500, although these
minimums may be less for some investors. For more information on minimum
investments, call 1-800-521-5411.
- - Complete the application, indicating how much of your investment you want
to allocate to which fund(s). Please apply now for any account privileges
you may want to use in the future, in order to avoid the delays associated
with adding them later on.
- - Mail in your application, making your initial investment as shown at right.
For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.
OPENING YOUR ACCOUNT
BY WIRE
- - Mail your completed application to the Shareholder Services Agent.
- - Call the Shareholder Services Agent to obtain an account number and to
place a purchase order. FUNDS THAT ARE WIRED WITHOUT A PURCHASE ORDER WILL
BE RETURNED UNINVESTED.
- - After placing your purchase order, instruct your bank to wire the amount of
your investment to:
State Street Bank & Trust Company
ROUTING NUMBER: 011-000-028
CREDIT: J.P. Morgan Funds
ACCOUNT NUMBER: 9904-226-9
FFC: your account number, name of registered owner(s) and fund name
BY CHECK
- - Make out a check for the investment amount payable to J.P. Morgan Funds.
- - Mail the check with your completed application to the Transfer Agent.
BY EXCHANGE
- - Call the Shareholder Services Agent to effect an exchange.
ADDING TO YOUR ACCOUNT
BY WIRE
- - Call the Shareholder Services Agent to place a purchase order. FUNDS THAT
ARE WIRED WITHOUT A PURCHASE ORDER WILL BE RETURNED UNINVESTED.
- - Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.
BY CHECK
- - Make out a check for the investment amount payable to J.P. Morgan Funds.
- - Mail the check with a completed investment slip to the Transfer Agent. If
you do not have an investment slip, attach a note indicating your account
number and how much you wish to invest in which fund(s).
BY EXCHANGE
- - Call the Shareholder Services Agent to effect an exchange.
6 YOUR INVESTMENT
<PAGE>
- --------------------------------------------------------------------------------
SELLING SHARES
BY PHONE -- WIRE PAYMENT
- - Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can
help you add it.
- - Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your
fund account.
BY PHONE -- CHECK PAYMENT
- - Call the Shareholder Services Agent and place your request. Once your
request has been verified, a check for the net amount, payable to the
registered owner(s), will be mailed to the address of record. For checks
payable to any other party or mailed to any other address, please make your
request in writing (see below).
IN WRITING
- - Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the
fund name; the amount you want to sell; and the recipient's name and
address or wire information, if different from those of the account
registration.
- - Indicate whether you want the proceeds sent by check or by wire.
- - Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.
- - Mail the letter to the Shareholder Services Agent.
BY EXCHANGE
- - Call the Shareholder Services Agent to effect an exchange.
ACCOUNT AND TRANSACTION POLICIES
TELEPHONE ORDERS The fund accepts telephone orders from all shareholders. To
guard against fraud, the fund requires shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if the fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.
EXCHANGES You may exchange shares in this fund for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.
The fund may alter, limit, or suspend its exchange policy at any time.
BUSINESS HOURS AND NAV CALCULATIONS The fund's regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). The fund calculates
its net asset value per share (NAV) every business day as of the close of
trading on the NYSE (normally 4:00 p.m. eastern time). The fund's securities are
typically priced using pricing services or market quotes, but may be priced
using fair value pricing when these methods are not readily available.
TIMING OF ORDERS Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. The fund has the right to suspend redemption of shares and to
postpone payment of proceeds for up to seven days or as permitted by law.
- --------------------------------------------------------------------------------
TRANSFER AGENT SHAREHOLDER SERVICES AGENT
STATE STREET BANK AND TRUST COMPANY J.P. MORGAN FUNDS SERVICES
P.O. Box 8411 522 Fifth Avenue
Boston, MA02266-8411 New York, NY 10036
Attention: J.P. Morgan Funds Services 1-800-521-5411
Representatives are available 8:00
a.m. to 5:00 p.m. eastern time on
fund business days.
YOUR INVESTMENT 7
<PAGE>
- --------------------------------------------------------------------------------
TIMING OF SETTLEMENTS When you buy shares, you will become the owner of record
when the fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.
When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.
STATEMENTS AND REPORTS The fund sends monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months the fund sends out an annual or semi-annual report containing
information on the fund's 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
The fund typically declares income dividends daily and pays them monthly. If an
investor's shares are redeemed during the month, accrued but unpaid dividends
are paid with the redemption proceeds. Shares of the fund earn dividends on the
business day the purchase is effective, but not on the business day the
redemption is effective. The fund distributes capital gains, if any, once a
year. However, the fund may make more or fewer payments in a given year,
depending on its investment results and its tax compliance situation. These
dividends and distributions consist of most or all of the fund's net investment
income and net realized capital gains.
Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Fund.
TAX CONSIDERATIONS
In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. These transactions
typically create the following tax liabilities for taxable accounts:
TRANSACTION TAX STATUS
- --------------------------------------------------------------------------------
Income dividends Exempt from federal and state
personal income taxes for
California residents only
- --------------------------------------------------------------------------------
Short-term capital gains Ordinary income
distributions
- --------------------------------------------------------------------------------
Long-term capital gains Capital gains
distributions
- --------------------------------------------------------------------------------
Sales or exchanges of Capital gains or
shares owned for more losses
than one year
- --------------------------------------------------------------------------------
Sales or exchanges of Gains are treated as ordinary
shares owned for one year income; losses are subject
or less to special rules
- --------------------------------------------------------------------------------
Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when the fund is about to declare a long-term capital
gains distribution.
A portion of the fund's returns may be subject to federal, state, or local tax,
or the alternative minimum tax.
Every January, the fund issues tax information on its distributions for the
previous year.
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.
Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.
8 YOUR INVESTMENT
<PAGE>
FUND DETAILS
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
The fund is a series of J.P. Morgan Series Trust, a Massachusetts business
trust. Information about other series or classes is available by calling
1-800-521-5411. In the future, the trustees could create other series or share
classes, which would have different expenses. Fund shareholders are entitled to
one full or fractional vote for each dollar or fraction of a dollar invested.
MANAGEMENT AND ADMINISTRATION
The fund and the other series of J.P. Morgan Series Trust are 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 the 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 0.30% of the fund's average
net assets
- --------------------------------------------------------------------------------
ADMINISTRATIVE SERVICES Fund's pro-rata portion of
(fee shared with Funds 0.09% of the first $7 billion in
Distributor, Inc.) J.P. Morgan-advised portfolios,
plus 0.04% of average net assets
over $7 billion
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES 0.25% of the fund's average
net assets
- --------------------------------------------------------------------------------
J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in the fund.
YEAR 2000
Fund operations and shareholders could be adversely affected if the computer
systems used by J.P. Morgan, the fund's other service providers and other
entities with computer systems linked to the fund, do not properly process and
calculate January 1, 2000 and after date-related information. J.P. Morgan is
working to avoid these problems and to obtain assurances from other service
providers that they are taking similar steps. However, it is not certain that
these actions will be sufficient to prevent January 1, 2000 and after
date-related problems from adversely impacting fund operations and shareholders.
FUND DETAILS 9
<PAGE>
- --------------------------------------------------------------------------------
RISK AND REWARD ELEMENTS
This table discusses the main elements that make up the fund's overall risk and
reward characteristics (described on page 2). It also outlines the fund's
policies toward various securities, including those that are designed to help
the fund manage risk.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
POTENTIAL RISKS POTENTIAL REWARDS POLICIES TO BALANCE RISK AND REWARD
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
MARKET CONDITIONS
- - The fund's share price, yield, - Bonds have generally - Under normal circumstances the fund plans to remain
and total return will fluctuate outperformed money fully invested in bonds and other fixed income
in response to bond market market investments over securities as noted in the table on page 12
movements the long term, with
less risk than stocks - The fund seeks to limit risk and enhance total return
or yields through careful management, sector
- - The value of most bonds will - Most bonds will rise in allocation, individual securities selection, and
fall when interest rates rise; value when interest duration management
the longer a bond's maturity rates fall
and the lower its credit - During severe market downturns, the fund has the option
quality, the more its value - Asset-backed securities of investing up to 100% of assets in investment-grade
typically falls can offer attractive short-term securities
returns
- J.P. Morgan monitors interest rate trends, as well as
- - Adverse market conditions may geographic and demographic information related to
from time to time cause the fund asset-backed securities and prepayments
to take temporary defensive
positions that are inconsistent
with its principal investment
strategies and may hinder the
fund from acheiving its
investment objective
- - Asset-backed securities
(securities representing
an interest in, or secured by,
a pool of assets such as
receivables) could generate
capital losses or periods of low
yields if they are paid off
substantially earlier or
later than anticipated
- ------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT CHOICES
- - The fund could underperform its - The fund could outperform - J.P. Morgan focuses its active management on those
benchmark due to its sector, its benchmark due to areas where it believes its commitment to research
securities, or duration these same choices can most enhance returns and manage risks in a
choices consistent way
- ------------------------------------------------------------------------------------------------------------------------------
CREDIT QUALITY
- - The default of an issuer - Investment-grade bonds - The fund maintains its own policies for balancing
would leave the fund with have a lower risk of credit quality against potential yields and gains in
unpaid interest or principal default light of its investment goals
- Junk bonds offer - J.P. Morgan develops its own ratings of unrated
- - Junk bonds (those rated BB/Ba higher yields and securities and makes a credit quality determination
or lower) have a higher risk higher potential gains for unrated securities
of default, tend to be less
liquid, and may be more
difficult to value
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10 FUND DETAILS
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
POTENTIAL RISKS POTENTIAL REWARDS POLICIES TO BALANCE RISK AND REWARD
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
ILLIQUID HOLDINGS
- - The fund could have difficulty - These holdings may offer - The fund may not invest more than 15% of net assets
valuing these holdings more attractive yields in illiquid holdings
precisely or potential growth than
comparable widely traded - To maintain adequate liquidity to meet redemptions,
- - The fund could be unable to securities the fund may hold investment-grade short-term
sell these holdings at the securities (including repurchase agreements) and,
time or price desired for temporary or extraordinary purposes, may borrow
from banks up to 331/3% of the value of its assets
- ------------------------------------------------------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY
SECURITIES
- - When the fund buys securities - The fund can take - The fund uses segregated accounts to offset leverage
before issue or for delayed advantage of attractive risk
delivery, it could be exposed transaction opportunities
to leverage risk if it does
not use segregated accounts
- ------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM TRADING
- - Increased trading would raise - The fund could realize - The fund anticipates a portfolio turnover rate of
the fund's transaction costs gains in a short period approximately 75%
of time
- The fund generally avoids short-term trading, except
- - Increased short-term capital - The fund could protect to take advantage of attractive or unexpected
gains distributions would against losses if a bond opportunities or to meet demands generated by
raise shareholders' income tax is overvalued and its shareholder activity
liability value later falls
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The fund is also permitted to enter into futures and options transactions,
however, these transactions result in taxable gains or losses so it is expected
that the fund will utilize them infrequently.
FUND DETAILS 11
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------------------
This table discusses the customary types of securities which
can be held by the fund. In each case the principal types of
risk are listed (see below for definitions).
/X/ Permitted
/ / Permitted, but not typically used CALIFORNIA
BOND FUND
PRINCIPAL TYPES OF RISK
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES Interests in a stream of payments from credit, interest rate, market, prepayment / /
specific assets, such as auto or credit card receivables.
- ----------------------------------------------------------------------------------------------------------------------------
BANK OBLIGATIONS Negotiable certificates of deposit, time credit, liquidity / /
deposits and bankers' acceptances.
- ----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER Unsecured short term debt issued by banks or credit, interest rate, liquidity, market /X/
corporations. These securities are usually discounted and are
rated by S&P or Moody's.
- ----------------------------------------------------------------------------------------------------------------------------
PRIVATE PLACEMENTS Bonds or other investments that are sold credit, interest rate, liquidity, market, /X/
directly to an institutional investor. valuation
- ----------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS Contracts whereby the seller of a security credit / /
agrees to repurchase the same security from the buyer on a
particular date and at a specific price.
- ----------------------------------------------------------------------------------------------------------------------------
SYNTHETIC VARIABLE RATE INSTRUMENTS Debt instruments whereby the credit, interest rate, leverage, liquidity, /X/
issuer agrees to exchange one security for another in order to market
change the maturity or quality of a security in the fund.
- ----------------------------------------------------------------------------------------------------------------------------
TAX EXEMPT MUNICIPAL SECURITIES Securities, generally issued as credit, interest rate, market, natural event, /X/(1)
general obligation and revenue bonds, whose interest is exempt political
from federal taxation and state and/or local taxes in the state
where the securities were issued.
- ----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES Debt instruments (Treasury bills, interest rate /X/
notes, and bonds) guaranteed by the U.S. government for the timely
payment of principal and interest.
- ----------------------------------------------------------------------------------------------------------------------------
ZERO COUPON, PAY-IN-KIND, AND DEFERRED PAYMENT SECURITIES credit, interest rate, liquidity, market, /X/
Securities offering non-cash or delayed-cash payment. Their prices valuation
are typically more volatile than those of some other debt
instruments and involve certain special tax considerations.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
RISK RELATED TO CERTAIN SECURITIES HELD BY J.P. MORGAN CALIFORNIA BOND FUND:
CREDIT RISK The risk a financial obligation will not be met by the issuer of
a security or the counterparty to a contract, resulting in a loss to the
purchaser.
INTEREST RATE RISK The risk a change in interest rates will adversely affect
the value of an investment. The value of fixed income securities generally
moves in the opposite direction of interest rates (decreases when interest
rates rise and increases when interest rates fall).
LEVERAGE RISK The risk of gains or losses disproportionately higher than the
amount invested.
LIQUIDITY RISK The risk the holder may not be able to sell the security at
the time or price it desires.
MARKET RISK The risk that when the market as a whole declines, the value of
a specific investment will decline proportionately. This systematic risk is
common to all investments and the mutual funds that purchase them.
NATURAL EVENT RISK The risk of a natural disaster, such as a hurricane or
similar event, will cause severe economic losses and default in payments by
the issuer of the security.
POLITICAL RISK The risk governmental policies or other political actions
will negatively impact the value of the investment.
PREPAYMENT RISK The risk declining interest rates will result in unexpected
prepayments, causing the value of the investment to fall.
VALUATION RISK The risk the estimated value of a security does not match the
actual amount that can be realized if the security is sold.
(1) At least 65% of assets must be in California municipal securities.
12 FUND DETAILS
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the past two fiscal periods. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, are included in the
annual report, which is available upon request.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PER-SHARE DATA For fiscal periods ended April 30
- --------------------------------------------------------------------------------
1997(1) 1998
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ($) 10.00 10.04
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.01 0.41
Net realized and unrealized gain (loss)
on investment ($) 0.04 0.31
- --------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS ($) 0.05 0.72
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.01) (0.41)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD ($) 10.04 10.35
- --------------------------------------------------------------------------------
TOTAL RETURN (%) 0.51(2) 7.20
- --------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD ($ thousands) 302 5,811
- --------------------------------------------------------------------------------
RATIO TO AVERAGE NET ASSETS:
- --------------------------------------------------------------------------------
EXPENSES (%) 0.62(3) 0.65
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME (%) 4.52(3) 3.94
- --------------------------------------------------------------------------------
DECREASE REFLECTED IN EXPENSE RATIO DUE TO
EXPENSE REIMBURSEMENT (%) 0.55(3) 0.35
- --------------------------------------------------------------------------------
PORTFOLIO TURNOVER (%) 40 44
- --------------------------------------------------------------------------------
</TABLE>
(1) The fund commenced operations on 4/21/97.
(2) Not annualized.
(3) Annualized.
FUND DETAILS 13
<PAGE>
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
For investors who want more information on the fund, 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 the fund's most recently completed fiscal year or
half-year.
STATEMENT OF ADDITIONAL INFORMATION (SAI) Provides a fuller technical and legal
description of the fund's policies, investment restrictions, and business
structure. This prospectus incorporates the fund's SAI by reference.
Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:
J.P. MORGAN CALIFORNIA BOND FUND
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
TELEPHONE: 1-800-521-5411
HEARING IMPAIRED: 1-888-468-4015
EMAIL: [email protected]
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. (1-800-SEC-0330) and may be viewed
on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. The
fund's investment company and 1933 Act registration numbers are 811-07795 and
033-11125.
J.P. MORGAN FUNDS AND THE MORGAN TRADITION
The J.P. Morgan Funds combine a heritage of integrity and financial leadership
with comprehensive, sophisticated analysis and management techniques. Drawing on
J.P. Morgan's extensive experience and depth as an investment manager, the J.P.
Morgan Funds offer a broad array of distinctive opportunities for mutual fund
investors.
JPMORGAN
- --------------------------------------------------------------------------------
J.P. MORGAN FUNDS
ADVISOR DISTRIBUTOR
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-521-5411 1-800-221-7930
PROS238-9810
<PAGE>
OCTOBER 1, 1998 PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL
CALIFORNIA BOND FUND
----------------------------------------------
Seeking high total return
by investing primarily in
fixed income securities.
This prospectus contains essential information for anyone investing in the fund.
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 as an investment 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. JP Morgan
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>
CONTENTS
- --------------------------------------------------------------------------------
2 J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND
The fund's goal, Fund description ................................. 2
investment approach,
risks, expenses, and Performance ...................................... 3
performance
Investor expenses ................................ 3
4 FIXED INCOME MANAGEMENT APPROACH
J.P. Morgan....................................... 4
Who may want to invest............................ 4
Fixed income investment process .................. 5
6 YOUR INVESTMENT
Investing in the Investing through a financial professional ....... 6
J.P. Morgan
Institutional Investing directly ............................... 6
California Bond
Fund Opening your account ............................. 6
Adding to your account ........................... 6
Selling shares ................................... 7
Account and transaction policies ................. 7
Dividends and distributions ...................... 8
Tax considerations ............................... 8
9 FUND DETAILS
More about risk and Business structure ............................... 9
the fund's business
operations Management and administration .................... 9
Risk and reward elements ......................... 10
Investments ...................................... 12
Financial highlights ............................. 13
FOR MORE INFORMATION ..................... back cover
1
<PAGE>
J.P. MORGAN INSTITUTIONAL
CALIFORNIA BOND FUND TICKER SYMBOL: JPICX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN CALIFORNIA BOND FUND:
INSTITUTIONAL SHARES)
[GRAPHIC]
GOAL
The fund's goal is to provide high after-tax total return for California
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.
[GRAPHIC]
INVESTMENT APPROACH
The fund invests primarily in California municipal securities whose income
is free from federal and state personal income taxes for California residents.
Because the fund's goal is high after-tax total return rather than high
tax-exempt income, the fund may invest to a limited extent in securities of
other states or territories. To the extent that the fund invests in municipal
securities of other states, the income from such securities would be free from
federal personal income taxes for California residents but would be subject to
California state personal income taxes. For non-California residents, the income
from California municipal securities is free from federal personal income taxes
only. The fund may also invest in taxable securities. The fund's securities may
be of any maturity, but under normal market conditions the fund's duration will
generally range between three and ten years, similar to that of the Lehman
Brothers 1-16 Year Municipal Bond Index. At least 90% of assets must be invested
in securities that, at the time of purchase, are rated investment-grade (BBB/Baa
or better) or are the unrated equivalent. No more than 10% of assets may be
invested in securities as low as B.
[GRAPHIC]
RISK/RETURN SUMMARY
The fund's share price and total return will vary in response to changes
in interest rates. How well the fund's performance compares to that of similar
fixed income funds will depend on the success of the investment process, which
is described on page 5. Because most of the fund's investments will typically be
from issuers in the State of California, its performance will be affected by the
fiscal and economic health of that state and its municipalities. The fund is
non-diversified and may invest more than 5% of assets in a single issuer, which
could further concentrate its risks. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, it takes on additional
risks, because these bonds are more sensitive to economic news and their issuers
are in less secure financial condition. The fund's investments and their main
risks, as well as fund strategies, are described in more detail on pages 10-12.
Shares in the fund are not bank deposits and are not guaranteed or insured by
any bank, government entity, or the FDIC. The value of the fund's shares will
fluctuate over time. You could lose money if you sell when the fund's share
price is lower than when you invested.
PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $8 billion using the same strategy as this fund.
The portfolio management team is led by Robert W. Meiselas, vice president, who
has been at J.P. Morgan since 1987, and Elaine B. Young, vice president, who
joined J.P. Morgan from Scudder, Stevens & Clark, Inc. in 1994 where she was a
municipal bond trader and fixed income portfolio manager. Both have been on the
team since June of 1997.
- --------------------------------------------------------------------------------
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 invests a portion of assets in non-investment-grade bonds ("junk
bonds"), which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.
o The fund does not represent a complete investment program.
2 J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)
The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional California Bond Fund.
The table indicates the risks by showing how the fund's average annual returns
for the past year compare to those of the Lehman Brothers 1-16 Year Municipal
Bond Index. This is a widely recognized, unmanaged index of general obligation
and revenue bonds with maturities of 1-16 years.
The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
Shows performance over time, for period ended
Average annual total return (%) December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr.
J.P. Morgan Institutional California Bond Fund (after expenses) 7.72
- --------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses) 7.97
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL]
Total return (%) Shows changes in returns by calendar year(1)
- --------------------------------------------------------------------------------
1997
J.P. Morgan Institutional California Bond Fund 7.72
Lehman Brothers 1-16 Year Municipal Bond Index 7.97
For the period covered by this total return chart, the fund's highest quarterly
return was 3.04% (for the quarter ended 6/30/97) and the lowest quarterly return
was -0.34% (for the quarter ended 3/31/97).
================================================================================
INVESTOR EXPENSES
The expenses of the fund before 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(2) (%)
(expenses that are deducted from fund assets)
Management fees 0.30
Marketing (12b-1) fees none
Other expenses(3) 0.54
================================================================================
Total annual fund
operating expenses(3) 0.84
- --------------------------------------------------------------------------------
Expense example
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
(before reimbursement) unchanged, and all shares sold at the end of each time
period. The example is for comparison only; the fund's actual return and your
actual costs may be higher or lower.
- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 86 268 466 1,037
- --------------------------------------------------------------------------------
================================================================================
(1) The fund's fiscal year end is 4/30. For the period 1/1/98 through 6/30/98,
the total return for the fund was 1.66% and the total return for the index
was 2.50%.
(2) This table is restated to show the current fee arrangements in effect as
of August 1, 1998, and shows expenses for the past fiscal year, before
reimbursement, expressed as a percentage of average net assets.
(3) Effective August 1, 1998, after reimbursement, other expenses and total
operating expenses will be 0.20% and 0.50%, respectively. This
reimbursement arrangement can be changed or terminated at any time at the
option of J.P. Morgan.
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND 3
<PAGE>
FIXED INCOME MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
J.P. MORGAN
Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan is the asset management choice for many of the world's
most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan employs over 300 analysts and portfolio managers
around the world and has more than $300 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management Inc.
J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND
The J.P. Morgan Institutional California Bond Fund invests primarily in bonds
and other fixed income securities.
The fund's investment philosophy, developed by its advisor, emphasizes the
potential for consistently enhancing performance while managing risk.
WHO MAY WANT TO INVEST
The fund is designed for investors who:
o want to add an income investment to further diversify a portfolio
o want an investment whose risk/return potential is higher than that of
money market funds but generally less than that of stock funds
o want an investment that pays monthly dividends
o are seeking income that is exempt from federal and state personal income
taxes in California
The fund is not designed for investors who:
o are investing for aggressive long-term growth
o require stability of principal
o are investing through a tax-deferred account such as an IRA
4 FIXED INCOME MANAGEMENT APPROACH
<PAGE>
- --------------------------------------------------------------------------------
FIXED INCOME INVESTMENT PROCESS
J.P. Morgan seeks to generate an information advantage through the depth of its
global fixed-income research and the sophistication of its analytical systems.
Using a team-oriented approach, J.P. Morgan seeks to gain insights in a broad
range of distinct areas and may take positions in many different ones, helping
the fund to limit exposure to concentrated sources of risk.
In managing the fund, J.P. Morgan employs a three-step process that combines
sector allocation, fundamental research for identifying portfolio securities,
and duration management.
[GRAPHIC]
The fund invests across a range
of different types of securities
Sector allocation The sector allocation team meets monthly, analyzing the
fundamentals of a broad range of sectors in which the fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.
[GRAPHIC]
The fund makes its portfolio decisions as
described earlier in this prospectus
Security selection Relying on the insights of different specialists, including
credit analysts, quantitative researchers, and dedicated fixed income traders,
the portfolio managers make buy and sell decisions according to the fund's goal
and strategy.
[GRAPHIC]
J.P. Morgan uses a disciplined process
to control the fund's sensitivity
to interest rates
Duration management Forecasting teams use fundamental economic factors to
develop strategic forecasts of the direction of interest rates. Based on these
forecasts, strategists establish the fund's target duration (a measure of
average weighted maturity of the securities held by the fund and a common
measurement of sensitivity to interest rate movements), typically remaining
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the fund and make tactical
adjustments as necessary.
FIXED INCOME MANAGEMENT APPROACH 5
<PAGE>
YOUR INVESTMENT
- --------------------------------------------------------------------------------
For your convenience, the J.P. Morgan Institutional Funds offer several ways to
start and add to fund investments.
INVESTING THROUGH A FINANCIAL PROFESSIONAL
If you work with a financial professional, either at J.P. Morgan or elsewhere,
he or she is prepared to handle your planning and transaction needs. Your
financial professional will be able to assist you in establishing your fund
account, executing transactions, and monitoring your investment. If your fund
investment is not held in the name of your financial professional and you prefer
to place a transaction order yourself, please use the instructions for investing
directly.
INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:
o Determine the amount you are investing. The minimum amount for initial
investments is $5,000,000 and for additional investments $25,000, although
these minimums may be less for some investors. For more information on
minimum investments, call 1-800-766-7722.
o Complete the application, indicating how much of your investment you want
to allocate to which fund(s). Please apply now for any account privileges
you may want to use in the future, in order to avoid the delays associated
with adding them later on.
o Mail in your application, making your initial investment as shown at
right.
For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-766-7722.
OPENING YOUR ACCOUNT
By wire
o Mail your completed application to the Shareholder Services Agent.
o Call the Shareholder Services Agent to obtain an account number and to
place a purchase order. Funds that are wired without a purchase order will
be returned uninvested.
o After placing your purchase order, instruct your bank to wire the amount
of your investment to:
Morgan Guaranty Trust Company of New York
Routing number: 021-000-238
Credit: J.P. Morgan Institutional Funds
Account number: 001-57-689
FFC: your account number, name of registered owner(s) and fund name
By check
o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.
o Mail the check with your completed application to the Shareholder Services
Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
ADDING TO YOUR ACCOUNT
By wire
o Call the Shareholder Services Agent to place a purchase order. Funds that
are wired without a purchase order will be returned uninvested.
o Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.
By check
o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.
o Mail the check with a completed investment slip to the Shareholder
Services Agent. If you do not have an investment slip, attach a note
indicating your account number and how much you wish to invest in which
fund(s).
By exchange
o Call the Shareholder Services Agent to effect an exchange.
6 YOUR INVESTMENT
<PAGE>
- --------------------------------------------------------------------------------
SELLING SHARES
By phone -- wire payment
o Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can
help you add it.
o Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your
fund account.
By phone -- check payment
o Call the Shareholder Services Agent and place your request. Once your
request has been verified, a check for the net amount, payable to the
registered owner(s), will be mailed to the address of record. For checks
payable to any other party or mailed to any other address, please make
your request in writing (see below).
In writing
o Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the
fund name; the amount you want to sell; and the recipient's name and
address or wire information, if different from those of the account
registration.
o Indicate whether you want the proceeds sent by check or by wire.
o Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.
o Mail the letter to the Shareholder Services Agent.
By exchange
o Call the Shareholder Services Agent to effect an exchange.
ACCOUNT AND TRANSACTION POLICIES
Telephone orders The fund accepts telephone orders from all shareholders. To
guard against fraud, the fund requires shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if the fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.
Exchanges You may exchange shares in this fund for shares in any other J.P.
Morgan Institutional or J.P. Morgan mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable premiums. Keep in mind that for tax purposes an exchange
is considered a sale.
The fund may alter, limit, or suspend its exchange policy at any time.
Business hours and NAV calculations The fund's regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). The fund calculates
its net asset value per share (NAV) every business day as of the close of
trading on the NYSE (normally 4:00 p.m. eastern time). The fund's securities are
typically priced using pricing services or market quotes, but may be priced
using fair value pricing when these methods are not readily available.
Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. The fund has the right to suspend redemption of shares and to
postpone payment of proceeds for up to seven days or as permitted by law.
- --------------------------------------------------------------------------------
Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
1-800-766-7722
Representatives are available 8:00 a.m.
to 5:00 p.m. eastern time on fund business
days.
YOUR INVESTMENT 7
<PAGE>
- --------------------------------------------------------------------------------
Timing of settlements When you buy shares, you will become the owner of record
when the fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.
When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.
Statements and reports The fund sends monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months the fund sends out an annual or semi-annual report containing
information on the fund's 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
The fund typically declares income dividends daily and pays them monthly. If an
investor's shares are redeemed during the month, accrued but unpaid dividends
are paid with the redemption proceeds. Shares of the fund earn dividends on the
business day the purchase is effective, but not on the business day the
redemption is effective. The fund distributes capital gains, if any, once a
year. However, the fund may make more or fewer payments in a given year,
depending on its investment results and its tax compliance situation. These
dividends and distributions consist of most or all of the fund's net investment
income and net realized capital gains.
Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Institutional Fund.
TAX CONSIDERATIONS
In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. These transactions
typically create the following tax liabilities for taxable accounts:
================================================================================
Transaction Tax status
- --------------------------------------------------------------------------------
Income dividends Exempt from federal and state personal income
taxes for California residents only
- --------------------------------------------------------------------------------
Short-term capital gains Ordinary income
distributions
- --------------------------------------------------------------------------------
Long-term capital gains Capital gains
distributions
- --------------------------------------------------------------------------------
Sales or exchanges of Capital gains or
shares owned for more losses
than one year
- --------------------------------------------------------------------------------
Sales or exchanges of Gains are treated as ordinary
shares owned for one year income; losses are subject
or less to special rules
- --------------------------------------------------------------------------------
Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when the fund is about to declare a long-term capital
gains distribution.
A portion of the fund's returns may be subject to federal, state, or local tax,
or the alternative minimum tax.
Every January, the fund issues tax information on its distributions for the
previous year.
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.
Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.
8 YOUR INVESTMENT
<PAGE>
FUND DETAILS
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
The fund is a series of J.P. Morgan Series Trust, a Massachusetts business
trust. Information about other series or classes is available by calling
1-800-766-7722. In the future, the trustees could create other series or share
classes, which would have different expenses. Fund shareholders are entitled to
one full or fractional vote for each dollar or fraction of a dollar invested.
MANAGEMENT AND ADMINISTRATION
The fund and the other series of J.P. Morgan Series Trust are 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 the 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 0.30% of the fund's average net assets
- --------------------------------------------------------------------------------
Administrative services Fund's pro-rata portion of 0.09% of the first
(fee shared with Funds $7 billion in J.P. Morgan-advised portfolios,
Distributor, Inc.) plus 0.04% of average net assets over $7 billion
- --------------------------------------------------------------------------------
Shareholder services 0.10% of the fund's average net assets
- --------------------------------------------------------------------------------
J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in the fund.
YEAR 2000
Fund operations and shareholders could be adversely affected if the computer
systems used by J.P. Morgan, the fund's other service providers and other
entities with computer systems linked to the fund, do not properly process and
calculate January 1, 2000 and after date-related information. J.P. Morgan is
working to avoid these problems and to obtain assurances from other service
providers that they are taking similar steps. However, it is not certain that
these actions will be sufficient to prevent January 1, 2000 and after
date-related problems from adversely impacting fund operations and
shareholders.
FUND DETAILS 9
<PAGE>
RISK AND REWARD ELEMENTS
- --------------------------------------------------------------------------------
This table discusses the main elements that make up the fund's overall risk and
reward characteristics (described on page 2). It also outlines the fund's
policies toward various securities, including those that are designed to help
the fund manage risk.
<TABLE>
<CAPTION>
====================================================================================================================================
Potential risks Potential rewards Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Market conditions
o The fund's share price, yield, and o Bonds have generally outperformed o Under normal circumstances the fund
total return will fluctuate in money market investments over the plans to remain fully invested in
response to bond market movements long term, with less risk than stocks bonds and other fixed income
securities as noted in the table on
o The value of most bonds will fall o Most bonds will rise in value when page 12
when interest rates rise; the longer interest rates fall
a bond's maturity and the lower its o The fund seeks to limit risk and
credit quality, the more its value o Asset-backed securities can offer enhance total return or yields
typically falls attractive returns through careful management, sector
allocation, individual securities
o Adverse market conditions may from selection, and duration management
time to time cause the fund to take
temporary defensive positions that o During severe market downturns, the
are inconsistent with its principal fund has the option of investing up
investment strategies and may hinder to 100% of assets in investment-grade
the fund from acheiving its short-term securities
investment objective
o J.P. Morgan monitors interest rate
o Asset-backed securities (securities trends, as well as geographic and
representing an interest in, or demographic information related to
secured by, a pool of assets such as asset-backed securities and
receivables) could generate capital prepayments
losses or periods of low yields if
they are paid off substantially
earlier or later than anticipated
- ------------------------------------------------------------------------------------------------------------------------------------
Management choices
o The fund could underperform its o The fund could outperform its o J.P. Morgan focuses its active
benchmark due to its sector, benchmark due to these same choices management on those areas where it
securities, or duration choices believes its commitment to research
can most enhance returns and manage
risks in a consistent way
- ------------------------------------------------------------------------------------------------------------------------------------
Credit quality
o The default of an issuer would leave o Investment-grade bonds have a lower o The fund maintains its own policies
the fund with unpaid interest or risk of default for balancing credit quality against
principal potential yields and gains in light
o Junk bonds offer higher yields and of its investment goals
o Junk bonds (those rated BB/Ba or higher potential gains
lower) have a higher risk of default, o J.P. Morgan develops its own ratings
tend to be less liquid, and may be of unrated securities and makes a
more difficult to value credit quality determination for
unrated securities
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
====================================================================================================================================
Potential risks Potential rewards Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid holdings
o The fund could have difficulty o These holdings may offer more o The fund may not invest more than 15%
valuing these holdings precisely attractive yields or potential growth of net assets in illiquid holdings
than comparable widely traded
o The fund could be unable to sell securities o To maintain adequate liquidity to
these holdings at the time or price meet redemptions, the fund may hold
desired investment-grade short-term
securities (including repurchase
agreements) and, for temporary or
extraordinary purposes, may borrow
from banks up to 33 1/3% of the value
of its assets
- ------------------------------------------------------------------------------------------------------------------------------------
When-issued and delayed delivery securities
o When the fund buys securities before o The fund can take advantage of o The fund uses segregated accounts to
issue or for delayed delivery, it attractive transaction opportunities offset leverage risk
could be exposed to leverage risk if
it does not use segregated accounts
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term trading
o Increased trading would raise the o The fund could realize gains in a o The fund anticipates a portfolio
fund's transaction costs short period of time turnover rate of approximately 75%
o Increased short-term capital gains o The fund could protect against losses o The fund generally avoids short-term
distributions would raise if a bond is overvalued and its value trading, except to take advantage of
shareholders' income tax liability later falls attractive or unexpected
opportunities or to meet demands
generated by shareholder activity
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The fund is also permitted to enter into futures and options transactions,
however, these transactions result in taxable gains or losses so it is expected
that the fund will utilize them infrequently.
FUND DETAILS 11
<PAGE>
- --------------------------------------------------------------------------------
Investments
This table discusses the customary types of securities which can be held by the
fund. In each case the principal types of risk are listed (see below for
definitions).
<TABLE>
<CAPTION>
|X| Permitted
|_| Permitted, but not
typically used California
Bond
Principal Types of Risk Fund
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Asset-backed securities Interests in a credit, interest rate, market, |_|
stream of payments from specific assets, prepayment
such as auto or credit card receivables.
- ----------------------------------------------------------------------------------------
Bank obligations Negotiable certificates credit, liquidity |_|
of deposit, time deposits and bankers'
acceptances.
- ----------------------------------------------------------------------------------------
Commercial paper Unsecured short term credit, interest rate, |X|
debt issued by banks or corporations. liquidity, market
These securities are usually discounted
and are rated by S&P or Moody's.
- ----------------------------------------------------------------------------------------
Private placements Bonds or other credit, interest rate, |X|
investments that are sold directly to an liquidity, market, valuation
institutional investor.
- ----------------------------------------------------------------------------------------
Repurchase agreements Contracts whereby credit |_|
the seller of a security agrees to
repurchase the same security from the
buyer on a particular date and at a
specific price.
- ----------------------------------------------------------------------------------------
Synthetic variable rate instruments Debt credit, interest rate, |X|
instruments whereby the issuer agrees to leverage, liquidity, market
exchange one security for another in
order to change the maturity or quality
of a security in the fund.
- ----------------------------------------------------------------------------------------
Tax exempt municipal securities credit, interest rate, market, |X|(1)
Securities, generally issued as general natural event, political
obligation and revenue bonds, whose
interest is exempt from federal taxation
and state and/or local taxes in the
state where the securities were issued.
- ----------------------------------------------------------------------------------------
U.S. government securities Debt interest rate |X|
instruments (Treasury bills, notes, and
bonds) guaranteed by the U.S. government
for the timely payment of principal and
interest.
- ----------------------------------------------------------------------------------------
Zero coupon, pay-in-kind, and deferred credit, interest rate, |X|
payment securities Securities offering liquidity, market, valuation
non-cash or delayed-cash payment. Their
prices are typically more volatile than
those of some other debt instruments and
involve certain special tax
considerations.
- ----------------------------------------------------------------------------------------
</TABLE>
Risk related to certain securities held by J.P. Morgan Institutional California
Bond Fund:
Credit risk The risk a financial obligation will not be met by the issuer of a
security or the counterparty to a contract, resulting in a loss to the
purchaser.
Interest rate risk The risk a change in interest rates will adversely affect
the value of an investment. The value of fixed income securities generally moves
in the opposite direction of interest rates (decreases when interest rates rise
and increases when interest rates fall).
Leverage risk The risk of gains or losses disproportionately higher than the
amount invested.
Liquidity risk The risk the holder may not be able to sell the security at the
time or price it desires.
Market risk The risk that when the market as a whole declines, the value of a
specific investment will decline proportionately. This systematic risk is common
to all investments and the mutual funds that purchase them.
Natural event risk The risk of a natural disaster, such as a hurricane or
similar event, will cause severe economic losses and default in payments by the
issuer of the security.
Political risk The risk governmental policies or other political actions will
negatively impact the value of the investment.
Prepayment risk The risk declining interest rates will result in unexpected
prepayments, causing the value of the investment to fall.
Valuation risk The risk the estimated value of a security does not match the
actual amount that can be realized if the security is sold.
(1) At least 65% of assets must be in California municipal securities.
12 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance for the past two fiscal periods. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the fund's financial statements, are included in the
annual report, which is available upon request.
================================================================================
Per-share data For fiscal periods ended April 30
- --------------------------------------------------------------------------------
1997(1) 1998
Net asset value, beginning of period ($) 10.00 9.90
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.16 0.42
Net realized and unrealized gain (loss)
on investment ($) (0.10) 0.30
================================================================================
Total from investment operations ($) 0.06 0.72
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.16) (0.42)
Net asset value, end of period ($) 9.90 10.20
- --------------------------------------------------------------------------------
Total return (%) 0.56(2) 7.35
- --------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 14,793 46,280
- --------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.45(3) 0.45
- --------------------------------------------------------------------------------
Net investment income (%) 4.43(3) 4.11
- --------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 3.01(3) 0.34
- --------------------------------------------------------------------------------
Portfolio turnover (%) 40 44
- --------------------------------------------------------------------------------
(1) The fund commenced operations on 12/23/96.
(2) Not annualized.
(3) Annualized.
FUND DETAILS 13
<PAGE>
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
For investors who want more information on the fund, 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 the fund's most recently completed fiscal year or
half-year.
Statement of Additional Information (SAI) Provides a fuller technical and legal
description of the fund's policies, investment restrictions, and business
structure. This prospectus incorporates the fund's SAI by reference.
Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:
J.P. Morgan Institutional California Bond Fund
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
Telephone: 1-800-766-7722
Hearing impaired: 1-888-468-4015
Email: [email protected]
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. (1-800-SEC-0330) and may be viewed
on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. The
fund's investment company and 1933 Act registration numbers are 811-07795 and
333-11125.
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.
JP MORGAN
- --------------------------------------------------------------------------------
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
PROS332-9810
<PAGE>
PART C
ITEM 23. EXHIBITS.
(a) Declaration of Trust.(1)
(a)1 Amendment No. 1 to Declaration of Trust, Amended and Restated
Establishment and Designation of Series and Classes of Shares of
Beneficial Interest.(2)
(a)2 Amendment No. 2 to Declaration of Trust, Second Amended and Restated
Establishment and Designation of Series and Classes of Shares of Beneficial
Interest.(4)
(a)3 Amendment No. 3 to Declaration of Trust, Third Amended and Restated
Establishment and Designation of Series and Classes of Shares of Beneficial
Interest.(6)
(a)4 Amendment No. 4 to Declaration of Trust, Fourth Amended and Restated
Establishment and Designation of Series and Classes of Shares of Beneficial
Interest.(8)
(b) Restated By-Laws.(2)
(d) Form of Amended and Restated Investment Advisory Agreement between
Registrant and J.P. Morgan Investment Management Inc. ("JPMIM").(10)
(e) Form of Distribution Agreement between Registrant and Funds
Distributor, Inc. ("FDI").(2)
(g) Form of Custodian Contract between Registrant and State Street Bank and
Trust Company ("State Street").(2)
(h)1 Form of Co-Administration Agreement between Registrant and FDI.(2)
(h)2 Form of Administrative Services Agreement between Registrant and
Morgan Guaranty Trust Company of New York ("Morgan").(2)
(h)3 Form of Transfer Agency and Service Agreement between Registrant and
State Street.(2)
(h)4 Form of Restated Shareholder Servicing Agreement between Registrant
and Morgan.(10)
(j) Consent of independent accountants.(9)
(l) Purchase agreement with respect to Registrant's initial shares.(2)
20.1 18f-3 Plan for J.P. Morgan California Bond Fund.(3)
20.2 18f-3 Plan for J.P. Morgan Global 50 Fund. (7)
27.1 Financial Data Schedule for J.P. Morgan Tax Aware Disciplined
Equity Fund: Institutional Shares(9)
<PAGE>
27.2 Financial Data Schedule for J.P. Morgan Tax Aware U.S. Equity Fund:
Select Shares(9)
27.3 Financial Data Schedule for J.P. Morgan California Bond Fund: Select
Shares(9)
27.4 Financial Data Schedule for J.P. Morgan California Bond Fund:
Institutional Shares(9)
-------------------
(1) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on August 29, 1996 (Accession No.
0000912057-96-019242).
(2) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on November 8, 1996 (Accession No.
0001016964-96-000034).
(3) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on February 10, 1997 (Accession No.
0001016964-97-000014).
(4) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on June 19, 1997 (Accession No.
0001016964-97-000117).
(5) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on October 21, 1997 (Accession No.
0001042058-97-000005).
(6) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on January 2, 1998 (Accession
No.0001041455-98-000012).
(7) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on March 2, 1998 (Accession No.
0001042058-98-000030).
(8) Incorporated herein from Registrant's registration statement on
Form N-1A as filed on July 28, 1998 (Accession No.
0001041455-98-000039).
(9) To be filed by amendment.
(10) Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
Not applicable.
ITEM 25. INDEMNIFICATION.
Reference is made to Section 5.3 of Registrant's Declaration of Trust and
Section 5 of Registrant's Distribution Agreement.
Registrant, its Trustees and officers are insured against certain expenses in
connection with the defense of claims, demands, actions, suits, or proceedings,
and certain liabilities that might be imposed as a result of such actions, suits
or proceedings.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "1933 Act"), may be permitted to directors, trustees,
officers and controlling persons of the Registrant and the principal underwriter
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, trustee,
officer, or controlling person of the Registrant and the principal underwriter
in connection with the successful defense of any action, suite or proceeding) is
asserted against the Registrant by such director, trustee, officer or
controlling person or principal underwriter in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
JPMIM is a registered investment adviser under the Investment Advisers
Act of 1940, as amended, and is a wholly owned subsidiary of J.P. Morgan & Co.
Incorporated. JPMIM manages employee benefit funds of corporations, labor unions
and state and local governments and the accounts of other institutional
investors, including investment companies.
To the knowledge of the Registrant, none of the directors, except those
set forth below, or executive officers of JPMIM, is or has been during the past
two fiscal years engaged in any other business, profession, vocation or
employment of a substantial nature, except that certain officers and directors
of JPMIM also hold various positions with, and engage in business for, J.P.
Morgan & Co. Incorporated, which owns all the outstanding stock of JPMIM.
ITEM 27. PRINCIPAL UNDERWRITERS.
(a) Funds Distributor, Inc. (the "Distributor") is the principal
underwriter of the Registrant's shares.
Funds Distributor, Inc. acts as principal underwriter for the following
investment companies other than the Registrant:
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
<PAGE>
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Funds
J.P. Morgan Institutional Funds
J.P. Morgan Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.
Funds Distributor, Inc. does not act as depositor or investment adviser to
any of the investment companies.
Funds Distributor, Inc. is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National Association of
Securities Dealers. Funds Distributor, Inc. is located at 60 State Street, Suite
1300, Boston, Massachusetts 02109. Funds Distributor, Inc. is an indirect
wholly-owned subsidiary of Boston Institutional Group, Inc., a holding company
all of whose outstanding shares are owned by key employees.
(b) The following is a list of the executive officers, directors and
partners of Funds Distributor, Inc.:
Director, President and Chief Executive Officer: Marie E. Connolly
Executive Vice President: George Rio
Executive Vice President: Donald R. Roberson
Executive Vice President: William S. Nichols
Senior Vice President: Michael S. Petrucelli
Director, Senior Vice President, Treasurer and
Chief Financial Officer: Joseph F. Tower, III
Senior Vice President: Paula R. David
Senior Vice President: Allen B. Closser
Senior Vice President: Bernard A. Whalen
Director: William J. Nutt
(c) Not applicable
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended (the "1940
Act"), and the Rules thereunder will be maintained at the offices of:
Morgan Guaranty Trust Company of New York: 60 Wall Street, New York, New
York 10260-0060, 9 West 57th Street, New York, New York 10019 or 522 Fifth
Avenue, New York, New York 10036 (records relating to its functions as
investment advisor, shareholder servicing agent and administrative
services agent).
<PAGE>
State Street Bank and Trust Company: 1776 Heritage Drive, North Quincy,
Massachusetts 02171 (records relating to its functions as custodian, transfer
agent and dividend disbursing agent).
Funds Distributor, Inc.: 60 State Street, Suite 1300, Boston, Massachusetts
02109 (records relating
to its functions as distributor and co-administrator).
Pierpont Group, Inc.: 461 Fifth Avenue, New York, New York 10017 (records
relating to its assisting the Trustees in carrying out their duties in
supervising the Registrant's affairs).
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
(a) If the information called for by Item 5A of Form N-1A is
contained in the latest annual report to shareholders, the
Registrant shall furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders upon request and without charge.
(b) The Registrant undertakes to comply with Section 16(c) of the
1940 Act as though such provisions of the 1940 Act were
applicable to the Registrant, except that the request referred to
in the second full paragraph thereof may only be made by
shareholders who hold in the aggregate at least 10% of the
outstanding shares of the Registrant, regardless of the net asset
value of shares held by such requesting shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of New York and State of New York on the 25th day of August, 1998.
J.P. MORGAN SERIES TRUST
By /s/ Michael S. Petrucelli
---------------------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities
indicated on August 25, 1998.
/s/ Michael S. Petrucelli
- ------------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary
Matthew Healey*
- -----------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
Frederick S. Addy*
- ------------------------------
Frederick S. Addy
Trustee
William G. Burns*
- ------------------------------
William G. Burns
Trustee
Arthur C. Eschenlauer*
- ------------------------------
Arthur C. Eschenlauer
Trustee
Michael P. Mallardi*
- ------------------------------
Michael P. Mallardi
Trustee
*By /s/ Michael S. Petrucelli
----------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ------------- ----------------------
EX-99.Bd Form of Restated Shareholder Servicing Agreement between
Registrant and Morgan Guaranty Trust Company of New York
EX-99.Bh4 Form of Amended and Restated Investment Advisory Agreement
between Registrant and J.P. Morgan Investment Management Inc.
JPM SERIES TRUST
SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT made as of the 4th day of November, 1996 and restated as
of July 8, 1998 between JPM SERIES TRUST, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (the "Trust"), and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York trust company ("Morgan").
W I T N E S S E T H:
WHEREAS, the Trust is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, transactions in shares of the Trust ("Shares") may be made by
investors who are using the services of a financial institution which is acting
as shareholder servicing agent pursuant to an agreement with the Trust; and
WHEREAS, Morgan wishes to act as the shareholder servicing agent for
its customers and for other investors in the Trust who are customers of an
Eligible Institution as contemplated by the currently effective prospectus of
the respective Series of the Trust (the "Customers") in performing certain
administrative functions in connection with purchases and redemptions of Shares
from time to time upon the order and for the account of Customers and to provide
related services to Customers in connection with their investments in the Trust;
and
WHEREAS, it is in the interest of the Trust to make the shareholder
services of Morgan available to Customers who are or may become shareholders of
the Trust; and
NOW, THEREFORE, the Trust and Morgan hereby agree as follows:
1. Appointment. Morgan hereby agrees to perform certain shareholder
services as agent for Customers with respect to each Fund (as defined in the
next sentence) as hereinafter set forth. As used herein, a "Fund" means the
assets and liabilities of the Trust attributable to any series of Shares as may
be created from time to time by the Trustees of the Trust and to which the Trust
and Morgan agree this Agreement shall apply.
2. Services to be Performed.
2.1. Shareholder Services. Morgan shall be responsible for performing
shareholder account administrative and servicing functions, which shall include
without limitation:
(a) answering Customer inquiries regarding account status and history,
the manner in which purchases and redemptions of the Shares may be effected, and
certain other matters pertaining to the Trust; (b) assisting Customers in
designating and changing dividend options, account designations and addresses;
(c) providing necessary personnel and facilities to coordinate the establishment
and maintenance of shareholder accounts and records with the Trust's transfer
agent; (d) receiving
<PAGE>
Customers' purchase and redemption orders on behalf of, and transmitting such
orders to the Trust's transfer agent; (e) arranging for the wiring or other
transfer of funds to and from Customer accounts in connection with Customer
orders to purchase or redeem Shares; (f) verifying purchase and redemption
orders, transfers among and changes in Customer-designated accounts; (g)
informing the distributor of the Trust of the gross amount of purchase and
redemption orders for Shares; (h) monitoring the activities of the Trust's
transfer agent related to Customers' accounts, and to statements, confirmations
or other reports furnished to Customers by the Trust's transfer agent; and (i)
providing such other related services as the Trust or a Customer may reasonably
request, to the extent permitted by applicable law. Morgan shall provide all
personnel and facilities necessary in order for it to perform the functions
contemplated by this paragraph with respect to Customers.
2.2 Standard of Services. All services to be rendered by Morgan
hereunder shall be performed in a professional, competent and timely manner
subject to the supervision of the Trustees of the Trust. The details of the
operating standards and procedures to be followed by Morgan in the performance
of the services described above shall be determined from time to time by
agreement between Morgan and the Trust.
3. Fees. As full compensation for the services described in Section 2
hereof and expenses incurred by Morgan, the Trust shall pay Morgan a fee at an
annual rate of the daily net asset values of each Fund's shares owned by or for
Customers and attributable to the Trust as set forth on Schedule A attached
hereto. This fee will be computed daily and will be payable as agreed by the
Trust and Morgan, but no more frequently than monthly.
4. Information Pertaining to the Shares; Etc. Morgan and its officers,
employees and agents are not authorized to make any representations concerning
the Trust or the Shares except to communicate to Customers accurately factual
information contained in the Fund's Prospectus and Statement of Additional
Information and objective historical performance information. Morgan shall act
as agent for Customers only in furnishing information regarding the Trust or the
Shares and shall have no authority to act as agent for the Trust in its capacity
as shareholder servicing agent hereunder.
During the term of this Agreement, the Trust agrees to furnish Morgan
all prospectuses, statements of additional information, proxy statements,
reports to shareholders, sales literature, or other material the Trust will
distribute to shareholders of each Fund or the public, which refer in any way to
Morgan, and Morgan agrees to furnish the Trust all material prepared for
Customers, in each case prior to use thereof, and not to use such material if
the other party reasonably objects in writing within five business days (or such
other time as may be mutually agreed in writing) after receipt thereof. In the
event of termination of this Agreement, the Trust will continue to furnish to
Morgan copies of any of the above-mentioned materials which refer in any way to
Morgan. The Trust shall furnish or otherwise make available to Morgan such other
information relating to the business affairs of the Trust as Morgan at any time,
or from time to time, reasonably requests in order to discharge its obligations
hereunder.
<PAGE>
Nothing in this Section 4 shall be construed to make the Trust liable
for the use of any information about the Trust which is disseminated by Morgan.
5. Use of Morgan's Name. The Trust shall not use the name of Morgan in
any prospectus, sales literature or other material relating to the Trust in a
manner not approved by Morgan prior thereto in writing; provided, however, that
the approval of Morgan shall not be required for any use of its name which
merely refers in accurate and factual terms to its appointment hereunder or as
investment advisor to the Trust or which is required by the Securities and
Exchange Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
6. Use of the Fund's Name. Morgan shall not use the name of the Trust
on any checks, bank drafts, bank statements or forms for other than internal use
in a manner not approved by the Trust prior thereto in writing; provided,
however, that the approval of the Trust shall not be required for the use of the
Trust's name in connection with communications permitted by Sections 2 and 4
hereof or for any use of the Trust's name which merely refers in accurate and
factual terms to Morgan's role hereunder or as investment advisor to the Trust
or which is required by the Securities and Exchange Commission or any state
securities authority or any other appropriate regulatory, governmental or
judicial authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
7. Security. Morgan represents and warrants that the various procedures
and systems which it has implemented with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause any Trust records and
other data and Morgan's records, data, equipment, facilities and other property
used in the performance of its obligations hereunder are adequate and that it
will make such changes therein from time to time as in its judgment are required
for the secure performance of its obligations hereunder. The parties shall
review such systems and procedures on a periodic basis, and the Trust shall from
time to time specify the types of records and other data of the Trust to be
safeguarded in accordance with this Section 7.
8. Compliance with Laws; etc. Morgan assumes no responsibilities under
this Agreement other than to render the services called for hereunder, on the
terms and conditions provided herein. Morgan shall comply with all applicable
federal and state laws and regulations. Morgan represents and warrants to the
Trust that the performance of all its obligations hereunder will comply with all
applicable laws and regulations, the provisions of its charter documents and
by-laws and all material contractual obligations binding upon Morgan. Morgan
furthermore undertakes that it will promptly inform the Trust of any change in
applicable laws or regulations (or interpretations thereof) which would prevent
or impair full performance of any of its obligations hereunder.
9. Force Majeure. Morgan shall not be liable or responsible for delays
or errors by reason of circumstances beyond its control, including, but not
limited to, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, Acts of God,
insurrection, war, riots or failure of communication or power supply.
<PAGE>
10. Indemnification.
10.1. Indemnification of Morgan. The Trust will indemnify and hold
Morgan harmless, from all losses, claims, damages, liabilities or expenses
(including reasonable fees and disbursements of counsel) from any claim, demand,
action or suit (collectively, "Claims") (a) arising in connection with
misstatements or omissions in each Fund's Prospectus, actions or inactions by
the Trust or any of its agents or contractors or the performance of Morgan's
obligations hereunder and (b) not resulting from the willful misfeasance, bad
faith, or gross negligence of Morgan, its officers, employees or agents, in the
performance of Morgan's duties or from reckless disregard by Morgan, its
officers, employees or agents of Morgan's obligations and duties under this
Agreement. Notwithstanding anything herein to the contrary, the Trust will
indemnify and hold Morgan harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any Claim as a result of Morgan's acting in accordance with any
written instructions reasonably believed by Morgan to have been executed by any
person duly authorized by the Trust, or as a result of acting in reliance upon
any instrument or stock certificate reasonably believed by Morgan to have been
genuine and signed, countersigned or executed by a person duly authorized by the
Trust, excepting only the gross negligence or bad faith of Morgan.
In any case in which the Trust may be asked to indemnify or hold Morgan
harmless, the Trust shall be advised of all pertinent facts concerning the
situation in question and Morgan shall use reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present a claim for indemnification against the Trust. The Trust shall
have the option to defend Morgan against any Claim which may be the subject of
indemnification under this Section 10.1. In the event that the Trust elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
the Trust and reasonably satisfactory to Morgan. Morgan may retain additional
counsel at its expense. Except with the prior written consent of the Trust,
Morgan shall not confess any Claim or make any compromise in any case in which
the Trust will be asked to indemnify Morgan.
10.2. Indemnification of the Trust. Without limiting the rights of the
Trust under applicable law, Morgan will indemnify and hold the Trust harmless
from all losses, claims, damages, liabilities or expenses (including reasonable
fees and disbursements of counsel) from any Claim (a) resulting from the willful
misfeasance, bad faith or gross negligence of Morgan, its officers, employees,
or agents, in the performance of Morgan's duties or from reckless disregard by
Morgan, its officers, employees or agents of Morgan's obligations and duties
under this Agreement, and (b) not resulting from Morgan's actions in accordance
with written instructions reasonably believed by Morgan to have been executed by
any person duly authorized by the Trust, or in reliance upon any instrument or
stock certificate reasonably believed by Morgan to have been genuine and signed,
countersigned or executed by a person authorized by the Trust.
<PAGE>
In any case in which Morgan may be asked to indemnify or hold the Trust
harmless, Morgan shall be advised of all pertinent facts concerning the
situation in question and the Trust shall use reasonable care to identify and
notify Morgan promptly concerning any situation which presents or appears likely
to present a claim for indemnification against Morgan. Morgan shall have the
option to defend the Trust against any Claim which may be the subject of
indemnification under this Section 10.2. In the event that Morgan elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
Morgan and reasonably satisfactory to the Trust. The Trust may retain additional
counsel at its expense. Except with the prior written consent of Morgan, the
Trust shall not confess any Claim or make any compromise in any case in which
Morgan will be asked to indemnify the Trust.
10.3. Survival of Indemnities. The indemnities granted by the parties
in this Section 10 shall survive the termination of this Agreement.
11. Insurance. Morgan shall maintain reasonable insurance coverage
against any and all liabilities which may arise in connection with the
performance of its duties hereunder.
12. Further Assurances. Each party agrees to perform such further acts
and execute further documents as are necessary to effectuate the purposes
hereof.
13. Termination. This Agreement shall continue in effect for a period
of one year and may thereafter be renewed by the Trustees of the Trust;
provided, however, that this Agreement may be terminated by the Trust at any
time without the payment of any penalty, by the Trustees of the Trust or by vote
of a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Trust, upon not less than six (6) months' written notice to Morgan or by
Morgan at any time, without the payment of any penalty, on not less than ninety
(90) days' written notice to the Trust. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
14. Subcontracting by Morgan. Morgan may subcontract for the
performance of its obligations hereunder with any one or more persons, including
but not limited to any one or more persons which is an affiliate of Morgan;
provided however, unless the Trust otherwise expressly agrees in writing, Morgan
shall be as fully responsible to the Trust for the acts and omissions of any
subcontractor as it would be for its own acts or omissions.
15. Nothing in this Agreement shall limit or restrict the right of
Morgan to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
16. Changes; Amendments. This Agreement may be amended only by mutual
written consent.
<PAGE>
17. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to Morgan at Morgan Guaranty Trust Company
of New York, 522 Fifth Avenue, New York, New York 10036, Attention: Funds
Management, or (2) to the Trust at JPM Series Trust c/o Funds Distributor, Inc.,
60 State Street, Suite 1300, Boston, Massachusetts 02109, Attention: Treasurer,
or at such other address as either party may designate by notice to the other
party.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
written.
JPM SERIES TRUST
By ________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By ___________________________
Name:
Title:
<PAGE>
Schedule A
Shareholder Servicing Fees
J.P. Morgan California Bond Fund - Institutional Shares
J.P. Morgan Tax Aware Disciplined Equity - Institutional Shares
J.P. Morgan Global 50 Fund - Institutional Shares
0.10% the average daily net asset value of shares owned by or for Customers
J.P. Morgan Tax Aware U.S. Equity Fund - Select Shares
J.P. Morgan California Bond Fund - Select Shares
J.P. Morgan Global 50 Fund - Select Shares
0.25% of the average daily net asset value of shares owned by or for Customers
Approved: July 8, 1998
Effective: August 1, 1998
J.P. MORGAN SERIES TRUST
FORM OF AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
Agreement, made this 11th day of May, 1998, as amended , between J.P.
Morgan Series Trust (the "Trust"), a trust organized under the laws of the State
of New York and J.P. Morgan Investment Management, Inc., a Delaware corporation
(the "Advisor"),
WHEREAS, the Trust is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain the Advisor to render investment
advisory services to the Trust's series set forth in Schedule A (each, a
"Portfolio") as agreed to from time to time between the Trust and the Advisor,
and the Advisor is willing to render such services;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Trust hereby appoints the Advisor to act as investment
adviser to the Portfolios for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Subject to the general supervision of the Trustees of the
Trust, the Advisor shall manage the investment operations of each Portfolio and
the composition of the Portfolio's holdings of securities and investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with the Portfolio's investment objectives and
policies as stated in the Trust's registration statement on Form N-1A, as such
may be amended from time to time (the "Registration Statement"), with respect to
the Portfolio, under the Investment Company Act of 1940, as amended (the "1940
Act"), and subject to the following understandings:
(a) the Advisor shall furnish a continuous investment program
for each Portfolio and determine from time to time what investments or
securities will be purchased, retained, sold or lent by the Portfolio,
and what portion of the assets will be invested or held uninvested as
cash;
(b) the Advisor shall use the same skill and care in the
management of each Portfolio's investments as it uses in the
administration of other accounts for which it has investment
responsibility as agent;
(c) the Advisor, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Trust's Declaration of Trust (such Declaration of Trust, as presently
in effect and as amended from time to time, is herein called the
"Declaration of Trust"), the Trust's By-Laws (such By-Laws, as
presently in effect and as amended from time to time, are herein called
the "By-Laws") and the Registration Statement and with the instructions
and directions of the Trustees of the Trust and will conform to and
comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations;
<PAGE>
(d) the Advisor shall determine the securities to be
purchased, sold or lent by each Portfolio and as agent for the
Portfolio will effect portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker
and/or dealer in such securities; in placing orders with brokers and/or
dealers the Advisor intends to seek best price and execution for
purchases and sales; the Advisor shall also determine whether the
Portfolio shall enter into repurchase or reverse repurchase agreements;
On occasions when the Advisor deems the purchase or sale of a
security to be in the best interest of one of the Portfolios as well as
other customers of the Advisor, including any other of the Portfolios,
the Advisor may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to
be so sold or purchased in order to obtain best execution, including
lower brokerage commissions, if applicable. In such event, allocation
of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Advisor in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Portfolio;
(e) the Advisor shall maintain books and records with respect
to each Portfolio's securities transactions and shall render to the
Trust's Trustees such periodic and special reports as the Trustees may
reasonably request; and
(f) the investment management services of the Advisor to any
of the Portfolios under this Agreement are not to be deemed exclusive,
and the Advisor shall be free to render similar services to others.
3. The Trust has delivered copies of each of the following
documents to the Advisor and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) The Declaration of Trust;
(b) The By-Laws;
(c) Certified resolutions of the Trustees of the Trust
authorizing the appointment of the Advisor and approving the form of
this Agreement;
(d) The Trust's Notification of Registration on Form N-8A and
Registration Statement as filed with the Securities and Exchange
Commission (the "Commission").
4. The Advisor shall keep each Portfolio's books and records
required to be maintained by it pursuant to paragraph 2(e). The Advisor agrees
that all records which it maintains for any Portfolio are the property of the
Trust and it will promptly surrender any of such records to the Trust upon the
Trust's request. The Advisor further agrees to preserve for the periods
prescribed by Rule 31a-2 of the Commission under the 1940 Act any such records
as are required to be maintained by the Advisor with respect to any Portfolio by
Rule 31a-1 of the Commission under the 1940 Act.
5. During the term of this Agreement the Advisor will pay all
expenses incurred by it in connection with its activities under this Agreement,
other than the cost of securities and investments purchased for a Portfolio
(including taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant
to this Agreement, each Portfolio will pay to the Advisor as full compensation
therefor a fee at an annual rate set forth on Schedule A attached hereto. Such
fee will be computed daily and payable as agreed by the Trust and the Advisor,
but no more frequently than monthly.
<PAGE>
7. The Advisor shall not be liable for any error of judgment
or mistake of law or for any loss suffered by any Portfolio in connection with
the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
8. This Agreement shall continue in effect with respect to
each Portfolio for a period of more than two years from the Portfolio's
commencement of investment operations only so long as such continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated with
respect to any Portfolio at any time, without the payment of any penalty, by
vote of a majority of all the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of that Portfolio on 60 days' written notice
to the Advisor, or by the Advisor at any time, without the payment of any
penalty, on 90 days' written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its "assignment" (as
defined in the 1940 Act).
9. The Advisor shall for all purposes herein be deemed to be
an independent contractor and shall, unless otherwise expressly provided herein
or authorized by the Trustees of the Trust from time to time, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent of
the Portfolios.
10. This Agreement may be amended, with respect to any
Portfolio, by mutual consent, but the consent of the Trust must be approved (a)
by vote of a majority of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting securities of the Portfolio.
11. Notices of any kind to be given to the Advisor by the
Trust shall be in writing and shall be duly given if mailed or delivered to the
Advisor at 522 Fifth Avenue, New York, New York 10036, Attention: Funds
Management, or at such other address or to such other individual as shall be
specified by the Advisor to the Trust. Notices of any kind to be given to the
Trust by the Advisor shall be in writing and shall be duly given if mailed or
delivered to the Trust c/o Funds Distributor, Inc. at 60 State Street, Suite
1300, Boston, Massachusetts 02109 or at such other address or to such other
individual as shall be specified by the Trust to the Advisor.
12. The Trustees of the Trust have authorized the execution of
this Agreement in their capacity as Trustees and not individually, and the
Advisor agrees that neither the Trustees nor any officer or employee of the
Trust nor any Portfolio's investors nor any representative or agent of the Trust
or of the Portfolio(s) shall be personally liable upon, or shall resort be had
to their private property for the satisfaction of, obligations given, executed
or delivered on behalf of or by the Trust or the Portfolio(s), that such
Trustees, officers, employees, investors, representatives and agents shall not
be personally liable hereunder, and that it shall look solely to the trust
property for the satisfaction of any claim hereunder.
13. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
<PAGE>
14. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day of , 1998.
J.P. MORGAN SERIES TRUST
By:
Michael S. Petrucelli
Vice President and Assistant Secretary
J.P. MORGAN INVESTMENT
MANAGEMENT, INC.
By:
Stephen H. Hopkins
Vice President
<PAGE>
SCHEDULE A
J.P. Morgan Series Trust
Investment Advisory Fees
Name of Portfolio % of fund's average daily net assets
J.P. Morgan Global 50 Fund 1.25% of average daily net assets
J.P. Morgan California Bond Fund 0.30% of average daily net assets
Tax Aware Disciplined Equity Fund 0.35% of average daily net assets
Tax Aware U.S. Equity Fund 0.45% of average daily net assets