JP MORGAN SERIES TRUST
485BPOS, 2000-02-28
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As filed with the U.S. Securities and Exchange Commission on February 28, 2000



                     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. 21


                                            AND

            REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940


                                   AMENDMENT NO. 22
                               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:            John E. Baumgardner, Jr., 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)
[X] on March 1, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph  (a)(i)
[ ] on (date) pursuant to paragraph  (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.




                                EXPLANATORY NOTE


     This post-effective  amendment No. 21 to the registration statement of J.P.
Morgan Series Trust (the  "Registrant")  on Form N-1A to update the registrant's
disclosure in the Prospectuses and Statement of Additional  Information relating
to the J.P.  Morgan  Global 50 Fund,  J.P.  Morgan Tax Aware U.S.  Equity,  J.P.
Morgan  Disciplined  Equity, and J.P. Morgan Tax Aware Enhanced Income Fund (the
"Funds"),  a series of shares of the Registrant,  to include  updated  financial
information  for the fiscal  year ended  October  31,  1999 and to update  other
information in the registration statement.


<PAGE>


- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN U.S. EQUITY FUNDS


Disciplined Equity Fund
U.S. Equity Fund
U.S. Small Company Fund
U.S. Small Company Opportunities Fund
Tax Aware U.S. Equity Fund

                                          --------------------------------------
                                          Seeking to outperform U.S. stock
                                          markets over the long term through a
                                          disciplined management approach

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense for anyone to state or suggest otherwise.

Distributed by Funds Distributor, Inc.                                  JPMorgan
<PAGE>

CONTENTS
- --------------------------------------------------------------------------------


2 |  Each fund's goal, principal strategies, principal risks, performance and
     expenses


J.P. MORGAN U.S. EQUITY FUNDS
J.P. Morgan Disciplined Equity Fund .........................................  2
J.P. Morgan U.S. Equity Fund ................................................  4
J.P. Morgan U.S. Small Company Fund .........................................  6
J.P. Morgan U.S. Small Company Opportunities Fund ...........................  8
J.P. Morgan Tax Aware U.S. Equity Fund ...................................... 10

12 | Principles and techniques common to the funds in this prospectus

U.S. EQUITY MANAGEMENT APPROACH
J.P. Morgan ................................................................. 12
J.P. Morgan U.S. equity funds ............................................... 12
The spectrum of U.S. equity funds ........................................... 12
Who may want to invest ...................................................... 12
U.S. equity investment process .............................................. 13
Tax aware investing at J.P. Morgan .......................................... 13

14 | Investing in the J.P. Morgan U.S. Equity Funds

YOUR INVESTMENT
Investing through a financial professional .................................. 14
Investing through an employer-sponsored retirement plan ..................... 14
Investing through an IRA or rollover IRA .................................... 14
Investing directly .......................................................... 14
Opening your account ........................................................ 14
Adding to your account ...................................................... 14
Selling shares .............................................................. 15
Account and transaction policies ............................................ 15
Dividends and distributions ................................................. 16
Tax considerations .......................................................... 16

17 | More about risk and the funds' business operations

FUND DETAILS
Business structure .......................................................... 17
Management and administration ............................................... 17
Performance of private accounts ............................................. 18
Risk and reward elements .................................................... 20
Financial highlights ........................................................ 22

FOR MORE INFORMATION .................................................back cover
<PAGE>

J.P. MORGAN DISCIPLINED EQUITY FUND      | TICKER SYMBOL: JPEQX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a consistently high total return from a broadly
diversified portfolio of equity securities with risk characteristics similar to
the Standard & Poor's 500 Stock Index (S&P 500). This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the S&P 500.
The fund does not look to overweight or underweight industries.

Within each industry, the fund modestly overweights stocks that are ranked as
undervalued or fairly valued while modestly underweighting or not holding stocks
that appear overvalued. (The process used to rank stocks according to their
relative valuations is described on page 13.) Therefore, the fund tends to own a
larger number of stocks within the S&P 500 than the U.S. Equity Fund or the Tax
Aware U.S. Equity Fund.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings of that index, the fund seeks returns that modestly exceed those of
the S&P 500 over the long term with virtually the same level of volatility.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                           REGISTRANT: J.P. MORGAN FUNDS
                                           (J.P. MORGAN DISCIPLINED EQUITY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $26 billion using similar
strategies as the fund.


The portfolio management team is led by James C. Wiess and Timothy J. Devlin,
both vice presidents, who have been on the team since the fund's inception. Mr.
Wiess has been at J.P. Morgan since 1992, and prior to managing this fund
managed other structured equity portfolios for J.P. Morgan. Mr. Devlin has been
at J.P. Morgan since July of 1996, and prior to that time was an equity
portfolio manager at Mitchell Hutchins Asset Management Inc.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


2 | J.P. MORGAN DISCIPLINED EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Disciplined Equity Fund.


The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last two calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
S&P500 Index. This is a widely recognized, unmanaged index of U.S. stocks used
as a measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Total return (%)                                           Shows changes in returns by calendar year(1)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                      <C>         <C>
                                                                                                          1998        1999

40%
                                                                                                         31.98
30%

20%
                                                                                                                     18.02
10%

0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ]  J.P. Morgan Disciplined Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 22.83% (for the quarter ended 12/31/98); and the
lowest quarterly return was -9.96% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%)        Shows performance over time, for periods ended December 31, 1999
- -------------------------------------------------------------------------------------------------------
                                                                         Past 1 yr.     Life of fund(2)
<S>                                                                        <C>              <C>
J.P. Morgan Disciplined Equity Fund (after expenses)                       18.02            25.94
- -------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                21.04            25.81
- -------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(4) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.35
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.51
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.86

Fee waiver and
expense reimbursement(5)                                                    0.11
- --------------------------------------------------------------------------------
Net expenses(5)                                                             0.75
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
Expense example(5)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.


- --------------------------------------------------------------------------------
                       1 yr.       3 yrs.     5 yrs.      10 yrs.
Your cost($)            77          263        466        1,051
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 12/31/97.

(2)   Life of the fund performance is calculated commencing 1/31/97 as follows:
      all performance data from 12/31/97 is that of the fund, and for the period
      1/31/97 through 12/31/97, returns reflect performance of J.P. Morgan
      Institutional Disciplined Equity Fund (a separate feeder fund investing in
      the same master portfolio). These returns reflect lower operating expenses
      than those of the fund. Therefore, these returns may be higher than the
      fund's would have been had it existed during the same period.

(3)   The fund's fiscal year end is 5/31.


(4)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.

(5)   Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
      York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.75% of the fund's
      average daily net assets through 2/28/01.



                                         J.P. MORGAN DISCIPLINED EQUITY FUND | 3
<PAGE>

J.P. MORGAN U.S. EQUITY FUND                    | TICKER SYMBOL: PPEQX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of selected
equity securities. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund can moderately underweight or
overweight industries when it believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the investment process described on page 13. The fund
generally considers selling stocks that appear overvalued.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By emphasizing undervalued stocks, the fund seeks to produce returns that exceed
those of the S&P 500. At the same time, by controlling the industry weightings
of the fund so they can differ only moderately from the industry weightings of
the S&P 500, the fund seeks to limit its volatility to that of the overall
market, as represented by this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                                  REGISTRANT: J.P. MORGAN FUNDS
                                                  (J.P. MORGAN U.S. EQUITY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $17 billion using similar
strategies as the fund.

The portfolio management team is led by Henry D. Cavanna, managing director, who
joined the team in February of 1998, and has been at J.P. Morgan since 1971. He
has served as manager of U.S. equity portfolios prior to managing the fund.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


4 | J.P. MORGAN U.S. EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Equity Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the S&P500
Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%) Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>         <C>         <C>        <C>         <C>         <C>          <C>        <C>         <C>         <C>
           1990        1991        1992       1993        1994        1995         1996       1997        1998        1999

40%
                       34.12
                                                                      32.48
30%
                                                                                               28.41
                                                                                                          24.45
                                                                                   21.06
20%
                                                                                                                      14.69
                                              11.02
10%
                                   8.73
           1.38
0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                          (0.61)
(10%)
</TABLE>


[ ]  J.P. Morgan U.S. Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 21.33% (for the quarter ended 12/31/98); and the
lowest quarterly return was -11.83% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999(1)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Past 1 yr.         Past 5 yrs.         Past 10 yrs.
<S>                                                                         <C>                 <C>                 <C>
J.P. Morgan U.S. Equity Fund (after expenses)                               14.69               24.07               16.97
- ------------------------------------------------------------------------------------------------------------------------------------
S&P500 Index  (no expenses)                                                 21.04               28.55               18.21
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.40

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.39
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          0.79
- --------------------------------------------------------------------------------

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                       1 yr.            3 yrs.         5 yrs.         10 yrs.
Your cost($)            81               252            439             978
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/18/93. For the period 1/1/89 through
      7/31/93 returns reflect performance of The Pierpont Equity Fund, the
      predecessor of the fund.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                                                J.P. MORGAN U.S. EQUITY FUND | 5
<PAGE>

J.P. MORGAN U.S. SMALL COMPANY FUND      | TICKER SYMBOL: PPCAX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of small
company stocks. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in small and medium sized U.S. companies whose market
capitalizations are greater than $100 million and less than $2 billion. Industry
by industry, the fund's weightings are similar to those of the Russell 2000
Index. The fund can moderately underweight or overweight industries when it
believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the process described on page 13. The fund generally
considers selling stocks that appear overvalued or have grown into large-cap
stocks.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

Small-cap stocks have historically offered higher long-term growth than
large-cap stocks, and have also involved higher risks. The fund's small-cap
emphasis means it is likely to be more sensitive to economic news and is likely
to fall further in value during broad market downturns. The fund pursues returns
that exceed those of the Russell 2000 Index while seeking to limit its
volatility relative to this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                           REGISTRANT: J.P. MORGAN FUNDS
                                           (J.P. MORGAN U.S. SMALL COMPANY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $4.5 billion using similar
strategies as the fund.


The portfolio management team is led by Marian U. Pardo, managing director, and
Alexandra F. Wells, vice president. Ms. Pardo has been at J.P. Morgan since
1968, except for five months in 1998 when she was president of a small
investment management firm. Prior to managing the fund, Ms. Pardo managed small
and large cap equity portfolios, equity and convertible funds, and several
institutional portfolios. Ms.Wells joined the team in March 1998 and has been
with J.P. Morgan since 1992. Prior to managing the fund, Ms. Wells managed large
cap equity portfolios, and prior to that served as an equity research analyst.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


6 | J.P. MORGAN U.S. SMALL COMPANY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Small Company Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Russell
2000 Index. This is a widely recognized, unmanaged index of small cap U.S.
stocks used as a measure of overall U.S. small company stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%)                                                        Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>         <C>         <C>        <C>         <C>         <C>          <C>        <C>         <C>         <C>
           1990        1991        1992       1993        1994        1995         1996       1997        1998        1999


60%
                       59.59
                                                                                                                      44.00
                                                                      31.86
30%
                                                                                              22.75
                                                                                   20.75
                                   18.98
                                              8.58
0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          (5.49)
                                                          (5.89)
           (24.34)
(30%)
</TABLE>



[ ]  J.P. Morgan U.S. Small Company Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 34.68% (for the quarter ended 12/31/99); and the
lowest quarterly return was -30.03% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%)                                  Shows performance over time, for periods ended December 31, 1999(1)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                             Past 1 yr.          Past 5 yrs.         Past 10 yrs.
<S>                                                                            <C>                  <C>                  <C>
J.P. Morgan U.S. Small Company Fund (after expenses)                           44.00                21.61                14.59
- ------------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index  (no expenses)                                              21.76                16.69                13.40
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.60

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.42
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                         1.02

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                    1 yr.          3 yrs.         5 yrs.         10 yrs.
Your cost($)        104             325            563            1,248
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/19/93. For the period 1/1/89 through
      7/31/93 returns reflect performance of The Pierpont Capital Appreciation
      Fund, the predecessor of the fund.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                                         J.P. MORGAN U.S. SMALL COMPANY FUND | 7
<PAGE>

J.P. MORGAN U.S. SMALL COMPANY
OPPORTUNITIES FUND                             | TICKER SYMBOL: JPSOX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide long-term growth from a portfolio of small company
growth stocks. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in stocks of small U.S. companies whose market
capitalization is greater than $150 million and less than $1.25 billion when
purchased. While the fund holds stocks in many industries to reduce the impact
of poor performance in any one sector, it tends to emphasize industries with
higher growth potential and does not track the sector weightings of the overall
small company stock market.

In searching for companies, the fund combines the approach described on page 13
with a growth-oriented approach that focuses on each company's business
strategies and its competitive environment. The fund seeks to buy stocks when
they are undervalued or fairly valued and are poised for long-term growth.
Stocks become candidates for sale when they appear overvalued or when the
company is no longer a small-cap company, but the fund may also continue to hold
them if it believes further substantial growth is possible.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

Small-cap stocks have historically offered higher long-term growth than medium-
or large-cap stocks, and have also involved higher risks. The fund's small-cap
emphasis means it is likely to be more sensitive to economic news and is likely
to fall further in value during broad market downturns. Because the fund seeks
to outperform the Russell 2000 Growth Index while not tracking its industry
weightings, investors should expect higher volatility compared to this index or
to more conservatively managed small-cap funds.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                                 REGISTRANT: J.P. MORGAN FUNDS
                                                 (J.P. MORGAN U.S. SMALL COMPANY
                                                 OPPORTUNITIES FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $2 billion using similar
strategies as the fund.

The portfolio management team is led by Marian U. Pardo, managing director,
Saira Malik, vice president and CFA, and Carolyn Jones, associate. Ms. Pardo has
been at J.P. Morgan since 1968, except for five months in 1998 when she was
president of a small investment management firm. Prior to managing the fund, Ms.
Pardo managed small and large cap equity portfolios, equity and convertible
funds, and several institutional portfolios. Ms. Malik has been with J.P. Morgan
since July 1995 as a small company equity analyst and portfolio manager after
graduating from the University of Wisconsin with an M.S. in finance. Ms. Jones
has been with J.P. Morgan since July 1998. Prior to managing this fund, Ms.
Jones served as a portfolio manager in J.P. Morgan's private banking group and
as a product specialist at Merrill Lynch Asset Management.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


8 | J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Small Company Opportunities Fund.


The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last two calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
Russell 2000 Growth Index. This is a widely recognized, unmanaged index of small
cap U.S. growth stocks used as a measure of overall U.S. small cap growth stock
performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%) Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                       <C>         <C>
                                                                                                          1998        1999


80%
                                                                                                                      61.63
60%

40%

20%
                                                                                                          5.21
0%
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

[ ]  J.P. Morgan U.S. Small Company Opportunities Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 23.09% (for the quarter ended 12/31/98); and the lowest quarterly
return was -20.19% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Past 1 yr.              Life of fund(1)
<S>                                                                                     <C>                        <C>
J.P. Morgan U.S. Small Company Opportunities Fund (after expenses)                      61.63                      30.85
- ------------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Growth Index  (no expenses)                                                43.09                      19.31
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.60

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.47
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          1.07

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                    1 yr.          3 yrs.         5 yrs.         10 yrs.
Your cost($)        109             340            590            1,306
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 6/16/97 and returns reflect performance
      of the fund from 6/30/97.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                           J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND | 9
<PAGE>

J.P. MORGAN TAX AWARE
U.S. EQUITY FUND       | TICKER SYMBOL: JPTAX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high after tax total return from a portfolio of
selected equity securities. This goal can be changed without shareholder
approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund can moderately underweight or
overweight industries when it believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the investment process described on page 13. The fund
generally considers selling stocks that appear overvalued.

To this investment approach the fund adds the element of tax aware investing.
The fund's tax aware investment strategies are described on page 13.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By emphasizing undervalued stocks, the fund seeks to produce returns that exceed
those of the S&P 500. At the same time, by controlling the industry weightings
of the fund so that they differ only moderately from the industry weightings of
the S&P 500, the fund seeks to limit its volatility to that of the overall
market, as represented by this index. The fund's tax aware strategies may reduce
your capital gains but will not eliminate them. Maximizing after-tax returns may
require trade-offs that reduce pre-tax returns.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                         REGISTRANT: J.P. MORGAN SERIES TRUST
                         (J.P. MORGAN TAX AWARE U.S. EQUITY FUND: SELECT SHARES)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $820 million using similar
strategies as the fund.


The portfolio management team is led by Terry E. Banet, vice president, and
Louise Sclafani, vice president. Ms. Banet has been on the team since the fund's
inception in December 1996, and has been at J.P. Morgan since 1985. Prior to
managing this fund, Ms. Banet managed tax aware accounts and helped develop
Morgan's tax aware equity process. Ms. Sclafani has been at J.P. Morgan since
1994. Prior to managing this fund, Ms. Sclafani was an equity analyst and
portfolio manager at Brundage, Story and Rose.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


10 | J.P. MORGAN TAX AWARE U.S. EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Tax Aware U.S. Equity Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 3 calendar
years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and the life of the fund compare to those of the S&P
500 Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%)                                                        Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>         <C>         <C>
                                                                                              1997        1998        1999

40%
                                                                                                          31.18
                                                                                              30.32
20%
                                                                                                                      18.31
0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

[ ]  J.P. Morgan Tax Aware U.S. Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 21.64% (for the quarter ended 12/31/98) and the
lowest quarterly return was -8.86%(for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Past 1 yr.                Life of fund(1)
<S>                                                                                   <C>                          <C>
J.P. Morgan Tax Aware U.S. Equity Fund (after expenses)                               18.31                        26.46
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                           21.04                        27.56
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Shareholder transaction expenses(3)
- --------------------------------------------------------------------------------
Redemption fees (% of your cash proceeds)
- --------------------------------------------------------------------------------
Shares held for less than one year                                          1.00

Shares held one year or longer                                              none

Annual expenses (% of fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.45

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.45
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.90

Fee waiver and expense
reimbursement(3)                                                            0.05
- --------------------------------------------------------------------------------
Net expenses(3)                                                             0.85

Expense example(3)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. In the one year example, the first number
assumes that you continued to hold your shares, the second that you sold all
shares for cash at the end of the 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($)               89/189        284            496            1,105
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 12/18/96, and returns reflect performance
      of the fund from 12/31/96.

(2)   The fund's fiscal year end is 10/31.


(3)   Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
      York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.85% of the fund's
      average daily net assets through 2/28/01.



                                     J.P. MORGAN TAX AWARE U.S. EQUITY FUND | 11
<PAGE>


U.S. EQUITY 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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN U.S.EQUITY FUNDS
These funds invest primarily in U.S. stocks either directly or through another
fund. As a shareholder, you should anticipate risks and rewards beyond those of
a typical bond fund or a typical balanced fund.

THE SPECTRUM OF U.S. EQUITY FUNDS
The funds described in this prospectus pursue a range of goals and offer varying
degrees of risk and potential reward. Differences between these funds include:

o how much emphasis they give to the most undervalued stocks

o how closely they follow the industry weightings of their benchmarks

o how many securities they typically maintain in their portfolios

o the size or market capitalization of the companies in which they invest

o whether they focus on before-tax or after-tax returns

The table below shows degrees of the relative risk and return that these funds
potentially offer. These and other distinguishing features of each U.S. equity
fund are described on the following pages.

Potential risk and return
- --------------------------------------------------------------------------------
The positions of the funds in this graph reflect long-term performance goals
only and are relative, not absolute.

      ^
      |-------------------- U.S. Small Company Opportunities Fund o
      |                                                           |
      |                                                           |
      |---------------------U.S. Small Company Fund o             |
  R   |                                             |             |
  e   |                                             |             |
  t   |-------------------------------------oo  Tax Aware U.S. Equity Fund
  u   |                                      |  U.S. Equity Fund  |
  r   |                                      |      |             |
  n   |                                      |      |             |
      |-----------------------------o Disciplined Equity Fund     |
      |                             |        |      |             |
      |                             |        |      |             |
      |                             |        |      |             |
      -------------------------------------------------------------------->
                                   Risk
- --------------------------------------------------------------------------------
Who May Want To Invest

The funds are designed for investors who:

o are pursuing a long-term goal such as retirement

o want to add an investment with growth potential to further diversify a
  portfolio

o want funds that seek to outperform the markets in which they each invest over
  the long term

o with regard to the Tax Aware Fund, are individuals that could benefit from a
  strategy that pursues returns from an after-tax perspective

The funds are not designed for investors who:

o want funds that pursue market trends or focus only on particular industries or
  sectors

o require regular income or stability of principal

o are pursuing a short-term goal or investing emergency reserves

o with regard to the Tax Aware Fund, are investing through a tax-deferred
  account such as an IRA.


12 | U.S. Equity MANAGEMENT APPROACH
<PAGE>

- --------------------------------------------------------------------------------
U.S. EQUITY INVESTMENT PROCESS

The J.P. Morgan U.S. equity funds invest primarily in U.S. stocks. The Tax Aware
Fund does so while seeking to enhance after-tax returns.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor, focuses
on stock picking while largely avoiding sector or market-timing strategies.

In managing the funds, J.P. Morgan employs a three-step process:

[GRAPHIC OMITTED] | J.P. Morgan analysts develop proprietary fundamental
                    research

Research J.P. Morgan takes an in-depth look at company prospects over a
relatively long period -- often as much as five years -- rather than focusing on
near-term expectations. This approach is designed to provide insight into a
company's real growth potential. J.P. Morgan's in-house research is developed by
an extensive worldwide network of over 120 career analysts. The team of analysts
dedicated to U.S. equities includes more than 20 members, with an average of
over ten years of experience.

[GRAPHIC OMITTED] | Stocks in each industry are ranked with the help of models

Valuation The research findings allow J.P. Morgan to rank the companies in each
industry group according to their relative value. The greater a company's
estimated worth compared to the current market price of its stock, the more
undervalued the company. The valuation rankings are produced with the help of a
variety of models that quantify the research team's findings.

[GRAPHIC OMITTED] | Using research and valuations, each fund's management team
                    chooses stocks for its fund

Stock selection Each fund buys and sells stocks according to its own policies,
using the research and valuation rankings as a basis. In general, each
management team buys stocks that are identified as undervalued and considers
selling them when they appear overvalued. Along with attractive valuation, the
funds' managers often consider a number of other criteria:

o catalysts that could trigger a rise in a stock's price

o high potential reward compared to potential risk

o temporary mispricings caused by market overreactions.

- --------------------------------------------------------------------------------
TAX AWARE INVESTING AT J.P. MORGAN

The Tax Aware U.S. Equity Fund is designed to reduce, but not eliminate, capital
gains distributions to shareholders. In doing so, the fund sells securities when
the anticipated performance benefit justifies the resulting tax liability. This
strategy often includes holding securities long enough to avoid higher,
short-term capital gains taxes, selling shares with a higher cost basis first,
and offsetting gains realized in one security by selling another security at a
capital loss. The fund is aided in this process by a tax-sensitive optimization
model developed by J.P. Morgan.

The Tax Aware U.S. Equity Fund generally intends to pay redemption proceeds in
cash; however it reserves the right at its sole discretion to pay redemptions
over $250,000 in-kind as a portfolio of representative stocks rather than cash.
An in-kind redemption payment can shield the fund -- and other shareholders --
from tax liabilities that might otherwise be incurred. It is not subject to a
redemption fee by the fund. However, the stocks received will continue to
fluctuate in value after redemption and will be subject to brokerage or other
transaction costs when liquidated.


                                            U.S. EQUITY MANAGEMENT APPROACH | 13
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Choose a fund (or funds) and determine the amount you are investing. The
  minimum amount for initial investments in a fund is $2,500 and for additional
  investments $500, although these minimums may be less for some investors. For
  more information on minimum investments, call 1-800-521-5411.

o Complete the application, indicating how much of your investment you want to
  allocate to which fund(s). Please apply now for any account privileges you may
  want to use in the future, in order to avoid the delays associated with adding
  them later on.

o Mail in your application, making your initial investment as shown on the
  right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

OPENING YOUR ACCOUNT

  By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place a
  purchase order. Funds that are wired without a purchase order will be returned
  uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
  your investment to:

State Street Bank & Trust Company
Routing number: 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

o Make out a check for the investment amount payable to J.P. Morgan Funds

o Mail the check with your completed application to the Transfer Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
  wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
  amount of your investment as


14 | 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 cash amount, payable to the registered
  owner(s), will be mailed to the address of record. For checks payable to any
  other party or mailed to any other address, please make your request in
  writing (see below).

  In writing

o Write a letter of instruction that includes the following information: The
  name of the registered owner(s) of the account; the account number; the fund
  name; the amount you want to sell; and the recipient's name and address or
  wire information, if different from those of the account registration.

o Indicate whether you want the proceeds sent by check or by wire.

o Make sure the letter is signed by an authorized party.
  The Shareholder Services Agent may require additional information, such as a
  signature guarantee.

o Mail the letter to the Shareholder Services Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

  Redemption in kind

     o Each fund  reserves  the right to make  redemptions  of over  $250,000 in
securities rather than in cash.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business days and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE(normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using market quotes or pricing services. When
these methods are not available or do not represent a security's value at the
time of pricing (e.g., when an event occurs after the close of trading that
would materially impact a security's value), the security is valued in
accordance with the fund's fair valuation procedures.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares, as
permitted by law, and to postpone payment of proceeds for up to seven days.

- --------------------------------------------------------------------------------
Transfer Agent
State Street Bank and Trust Company
P.O. Box 8411
Boston, MA 02266-8411
Attention: J.P. Morgan Funds Services

Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
1-800-521-5411

Representatives are available 8:00 a.m. to 5:00 p.m. eastern time on fund
business days.


                                                            YOUR INVESTMENT | 15
<PAGE>

- --------------------------------------------------------------------------------
Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, cash proceeds are generally available the day following
execution and will be forwarded according to your instructions. In-kind
redemptions (described on page 13) will be available as promptly as is feasible.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), each fund reserves the right to request that you buy more shares
or close your account. If your account balance is still below the minimum 60
days after notification, each fund reserves the right to close out your account
and send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS

Income dividends are typically paid four times a year for the Disciplined
Equity, U.S. Equity and Tax Aware U.S. Equity funds; and twice a year for the
U.S. Small Company and U.S. Small Company Opportunities funds. Each fund
typically makes capital gains distributions, if any, once per year. However, a
fund may make more or fewer payments in a given year, depending on its
investment results and its tax compliance situation. Each fund's dividends and
distributions consist of most or all of its 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 for cash, exchanging shares, and receiving
distributions (whether reinvested or taken in cash) are all taxable events.
These transactions typically create the following tax liabilities for taxable
accounts:

- --------------------------------------------------------------------------------
Transaction                             Tax status

Income dividends                        Ordinary income

Short-term capital gains                Ordinary income
distributions

Long-term capital gains                 Capital gains
distributions

Sales or exchanges of shares            Capital gains or losses
owned for more than one year

Sales or exchanges of shares            Gains are treated as ordinary
owned for one year                      or less income; losses are subject
                                        to special rules

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution.

Every January, each fund issues tax information on its distributions for the
previous year.

Any investor for whom a fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.

The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.

Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.


16 | YOUR INVESTMENT
<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------

BUSINESS STRUCTURE

As noted earlier, each fund (except the Tax Aware U.S. Equity Fund) is a series
of J.P. Morgan Funds, a Massachusetts business trust, and is a "feeder" fund
that invests in a master portfolio. (Except where indicated, this prospectus
uses the term "the fund" to mean the feeder fund and its master portfolio taken
together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-521-5411. Generally, when a master
portfolio seeks a vote, its feeder fund will hold a shareholder meeting and cast
its vote proportionately, as instructed by its shareholders. Fund shareholders
are entitled to one full or fractional vote for each dollar or fraction of a
dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether a fund should hire its own investment adviser,
invest in a different master portfolio, or take other action.

The Tax Aware U.S. Equity 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.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers.

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:

Advisory services                 Percentage of the master
                                  portfolio's average net assets
Disciplined Equity                0.35%
U.S. Equity                       0.40%
U.S. Small Company                0.60%
U.S. Small Company                0.60%
Opportunities

Administrative services           Master portfolio's and fund's
(fee shared with Funds            pro-rata portions of 0.09% of the
Distributor, Inc.)                first $7 billion in 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

The Tax Aware U.S. Equity Fund, subject to the expense reimbursements described
earlier in this prospectus, pays J.P. Morgan the following fees for investment
advisory and other services:

Advisory services                 0.45% 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 of average net
billion Distributor, Inc.)        assets in 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 a fund.



                                                               FUND DETAILS | 17
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE OF PRIVATE ACCOUNTS


The Disciplined Equity Fund's investment objective and policies are
substantially similar to those used by J.P. Morgan in managing certain
discretionary investment management accounts. The chart below shows the
historical investment performance for a composite of these private accounts (the
"Disciplined Equity Composite") and for the fund's benchmark index.

The performance of the Disciplined Equity Composite does not represent the
fund's performance nor should it be interpreted as indicative of the fund's
future performance. The accounts in the Disciplined Equity Composite are not
subject to the same regulatory requirements and limitations imposed on mutual
funds. If the accounts included in the Disciplined Equity Composite had been
subject to these regulatory requirements and limitations, their performance
might have been lower.

Additionally, although it is anticipated that the fund and the Disciplined
Equity Composite will hold similar securities, their investment results are
expected to differ. In particular, difference in asset size and cash flow
resulting from purchases and redemptions of fund shares may result in different
securities selections, differences in the relative weightings of securities or
differences in the prices paid for particular fund holdings.

The performance of the Disciplined Equity Composite reflects the deductions of
the fund's total operating expenses, after expense reimbursement, and the
reinvestment of dividends and other distributions. The performance information
is the average annual total return of the Disciplined Equity Composite for the
periods indicated.


<TABLE>
<CAPTION>
                                           Annual Total Returns for the Year Ended December 31,
<S>                          <C>       <C>      <C>       <C>       <C>       <C>       <C>        <C>       <C>       <C>

                             1990      1991     1992      1993      1994      1995      1996       1997      1998      1999
Disciplined Equity
Composite                   -3.24%   30.01%    11.42%     9.87%    1.90%     37.47%    22.90%    32.97%    31.52%    18.47%
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500                     -3.11%   30.47%     7.62%    10.08%    1.32%     37.58%    22.96%    33.36%    28.58%    21.04%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The  Disciplined  Equity  Composite  currently  includes all  discretionary
accounts managed by J.P. Morgan using substantially  similar investment strategy
as the Disciplined  Equity Fund. The inception date for the  Disciplined  Equity
Composite  was October 31, 1989.  Prior to January 1, 1993 the composite may not
have included all discretionary accounts.



18 | YOUR INVESTMENT
<PAGE>

- --------------------------------------------------------------------------------

                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)


                                                                            | 19
<PAGE>

RISK AND REWARD ELEMENTS

This table discusses the main elements that make up each fund's overall risk and
reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Potential risks                           | Potential rewards                     | Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Market conditions

o  Each fund's share price and              o  Stocks have generally                o  Under normal circumstances the
   performance will fluctuate in               outperformed more stable invest-        funds plan to remain fully
   response to stock market                    ments (such as bonds and cash           invested, with at least 65% in
   movements                                   equivalents) over the long term         stocks; stock investments may
                                                                                       include U.S. and foreign common
o  Adverse market conditions may                                                       stocks, convertible securities,
   from time to time cause a fund                                                      preferred stocks, trust or
   to take temporary defensive                                                         partnership interests, warrants,
   positions that are inconsistent                                                     rights, and investment company
   with its principal investment                                                       securities
   strategies and may hinder a fund
   from achieving its investment                                                    o  The funds seek to limit risk
   objective                                                                           through diversification

                                                                                    o  During severe market downturns,
                                                                                       the funds have the option of
                                                                                       investing up to 100% of assets
                                                                                       in investment-grade short-term
                                                                                       securities

Management choices

o  A fund could underperform its            o  A fund could outperform its          o  J.P. Morgan focuses its active
   benchmark due to its securities             benchmark due to these same             management on securities
   and asset allocation choices                choices                                 selection, the area where it
                                                                                       believes its commitment to
                                                                                       research can most enhance
                                                                                       returns

Foreign investments

o  Currency exchange rate movements         o  Favorable exchange rate              o  Each fund anticipates that its
   could reduce gains or create                movements could generate gains          total foreign investments will
   losses                                      or reduce losses                        not exceed 20% of assets

o  A fund could lose money because          o  Foreign investments, which           o  Each fund actively manages the
   of foreign government actions,              represent a major portion of the        currency exposure of its foreign
   political instability, or lack              world's securities, offer               investments relative to its
   of adequate and accurate                    attractive potential performance        benchmark, and may hedge back
   information                                 and opportunities for                   into the U.S. dollar from time
                                               diversification                         to time (see also "Derivatives")

When-issued and delayed
delivery securities

o  When a fund buys securities              o  A fund can take advantage of         o  Each fund uses segregated
   before issue or for delayed                 attractive transaction                  accounts to offset leverage risk
   delivery, it could be exposed to            opportunities
   leverage risk if it does not use
   segregated accounts

Short-term trading


o  Increased trading would raise a          o  A fund could realize gains in a      o  The funds generally avoid
   fund's brokerage and related                short period of time                    short-term trading, except to
   costs                                                                               take advantage of attractive or
                                            o  A fund could protect against            unexpected opportunities or to
o  Increased short-term capital                losses if a stock is overvalued         meet demands generated by
   gains distributions would raise             and its value later falls               shareholder activity. The
   shareholders' income tax                                                            turnover rate for each fund for
   liability                                                                           its most recent fiscal year end
                                                                                       is as follows: Disciplined
Policies to balance risk and reward                                                    Equity (51%), U.S. Equity (84%),
                                                                                       U.S. Small Company (104%), U.S.
                                                                                       Small Company Opportunities
                                                                                       (116%), and Tax Aware U.S.
                                                                                       Equity (29%)
</TABLE>



20 | FUND DETAILS
<PAGE>

- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Potential risks                           | Potential rewards                     | Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Derivatives

o  Derivatives such as futures,             o  Hedges that correlate well with      o  The funds use derivatives for
   options, swaps, and forward                 underlying positions can reduce         hedging and for risk management
   foreign currency contracts that             or eliminate losses at low cost         (i.e., to establish or adjust
   are used for hedging the                                                            exposure to particular
   portfolio or specific securities         o  A fund could make money and             securities, markets or
   may not fully offset the                    protect against losses if               currencies); risk management may
   underlying positions1 and this              management's analysis proves            include management of a fund's
   could result in losses to the               correct                                 exposure relative to its
   fund that would not have                                                            benchmark (the U.S. Small
   otherwise occurred                       o  Derivatives that involve                Company Opportunities Fund is
                                               leverage could generate                 permitted to use derivatives,
o  Derivatives used for risk                   substantial gains at low cost           however, it has no current
   management may not have the                                                         intention to do so)
   intended effects and may result
   in losses or missed                                                              o  The funds only establish hedges
   opportunities                                                                       that they expect will be highly
                                                                                       correlated with underlying
o  The counterparty to a                                                               positions
   derivatives contract could
   default                                                                          o  While the funds may use
                                                                                       derivatives that incidentally
o  Derivatives that involve                                                            involve leverage, they do not
   leverage could magnify losses                                                       use them for the specific
                                                                                       purpose of leveraging their
o  Certain types of derivatives                                                        portfolios
   involve costs to the funds which
   can reduce returns

Securities lending

o  When a fund lends a security,            o  A fund may enhance income            o  J.P. Morgan maintains a list of
   there is a risk that the loaned             through the investment of the           approved borrowers
   securities may not be returned              collateral received from the
   if the borrower defaults                    borrower                             o  The fund receives collateral
                                                                                       equal to at least 100% of the
o  The collateral will be subject                                                      current value of securities
   to the risks of the securities                                                      loaned
   in which it is invested
                                                                                    o  The lending agents indemnify a
                                                                                       fund against borrower default

                                                                                    o  J.P. Morgan's collateral
                                                                                       investment guidelines limit the
                                                                                       quality and duration of
                                                                                       collateral investment to
                                                                                       minimize losses

                                                                                    o  Upon recall, the borrower must
                                                                                       return the securities loaned
                                                                                       within the normal settlement
                                                                                       period

Illiquid holdings

o  A fund could have difficulty             o  These holdings may offer more        o  No fund may invest more than 15%
   valuing these holdings precisely            attractive yields or potential          of net assets in illiquid
                                               growth than comparable widely           holdings
o  A fund could be unable to sell              traded securities
   these holdings at the time or                                                    o  To maintain adequate liquidity
   price it desires                                                                    to meet redemptions, each fund
                                                                                       may hold investment-grade
Policies to balance risk and reward                                                    short-term securities (including
                                                                                       repurchase agreements and
                                                                                       reverse repurchase agreements)
                                                                                       and, for temporary or
                                                                                       extraordinary purposes, may
                                                                                       borrow from banks up to 331/3%
                                                                                       of the value of its total assets
</TABLE>

(1)   A futures contract is an agreement to buy or sell a set quantity of an
      underlying instrument at a future date, or to make or receive a cash
      payment based on changes in the value of a securities index. An option is
      the right to buy or sell a set quantity of an underlying instrument at a
      pre-determined price. A swap is a privately negotiated agreement to
      exchange one stream of payments for another. A forward foreign currency
      contract is an obligation to buy or sell a given currency on a future date
      and at a set price.


                                                               FUND DETAILS | 21
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The financial tables are intended to help you understand each fund's financial
performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends are distributions). Except where noted, this information has been
audited by PricewaterhouseCoopers LLP, whose reports, along with each fund's
financial statements, are included in the respective fund's annual report which
are available upon request.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN DISCIPLINED EQUITY FUND
                                                                                                                         For the
                                                                                                                        six months
Per-share data                                                                            For fiscal periods ended         ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            5/31/98(1)      5/31/99      11/30/99
                                                                                                                        (unaudited)
<S>                                                                                            <C>           <C>          <C>
Net asset value, beginning of period ($)                                                       12.98         14.95        18.22
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                                    0.03          0.12         0.09
   Net realized and unrealized gain
   on investment ($)                                                                            1.96          3.28         0.83
Total from investment operations ($)                                                            1.99          3.40         0.92
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                                                   (0.02)        (0.09)       (0.09)
   Net realized gains ($)                                                                         --         (0.04)          --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                                        (0.02)        (0.13)       (0.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                             14.95         18.22        19.05
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                               15.33(2)      22.86         4.09(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                       18,037       120,592      181,547
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                                             0.75(3)       0.75         0.72(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                                    1.00(3)       0.89         0.73(3)
   Expenses without reimbursement (%)                                                           3.28(3)       0.86         0.76(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)     The fund commenced operations on 12/31/97.
(2)     Not annualized.
(3)     Annualized.


22 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. EQUITY FUND
                                                                                                                        For the
                                                                                                                       six months
Per-share data                                                                      For fiscal periods ended              ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         5/31/95  5/31/96  5/31/97   5/31/98   5/31/99  11/30/99
                                                                                                                       (unaudited)
<S>                                                                     <C>       <C>      <C>       <C>       <C>      <C>
Net asset value, beginning of period ($)                                  19.38     19.42    22.15     24.63     25.66    25.09
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                               0.32      0.38     0.25      0.18      0.18     0.09
   Net realized and unrealized gain
   on investment ($)                                                       2.17      4.23     4.72      5.92      3.91     0.31
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                       2.49      4.61     4.97      6.10      4.09     0.40
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                              (0.28)    (0.29)   (0.36)    (0.23)    (0.19)   (0.05)
   Net realized gains ($)                                                 (2.17)    (1.59)   (2.13)    (4.84)    (4.47)      --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                   (2.45)    (1.88)   (2.49)    (5.07)    (4.66)   (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                        19.42     22.15    24.63     25.66     25.09    25.44
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                          15.11     25.18    25.00     28.35     18.39     1.59(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                 259,338   330,014  362,603   448,144   440,965  434,371
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                        0.90      0.81     0.80      0.78      0.79     0.78(2)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                               1.74      1.87     1.13      0.71      0.70     0.68(2)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                      0.91      0.81     0.80      0.78      0.79     0.78(2)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Not annualized.
(2)   Annualized.


                                                               FUND DETAILS | 23
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. SMALL COMPANY FUND
                                                                                                                        For the
                                                                                                                       six months
Per-share data                                                                     For fiscal periods ended               ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                     5/31/95    5/31/96   5/31/97   5/31/98   5/31/99   11/30/99
                                                                                                                       (unaudited)
<S>                                                                 <C>        <C>       <C>       <C>       <C>       <C>
Net asset value, beginning of period ($)                              21.40      22.02     26.20     26.04     27.68     21.54
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                           0.22       0.26      0.18      0.11      0.08     (0.00)(1)
   Net realized and unrealized gain (loss)
   on investment ($)                                                   2.13       6.96      2.00      5.58     (3.30)     5.93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                   2.35       7.22      2.18      5.69     (3.22)     5.93
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                 .                        (0.21)     (0.26)    (0.21)    (0.14)    (0.08)    (0.01)
   Net realized gain ($)                                              (1.52)     (2.78)    (2.13)    (3.91)    (2.84)       --
Total distributions to shareholders ($)      .                        (1.73)     (3.04)    (2.34)    (4.05)    (2.92)    (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                    22.02      26.20     26.04     27.68     21.54     27.46
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                      12.28      35.48      9.49     23.37    (10.95)    27.54(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                             179,130    220,917   237,985   261,804   186,879   252,971
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                    0.90       0.90      0.90      0.97      1.02      1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (loss) (%)                                    1.02       1.10      0.71      0.39      0.34      0.22(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                  1.12       1.03      1.03      1.03      1.02      1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Less than 0.01.
(2)   Not annualized.
(3)   Annualized.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND
                                                                                                                          For the
                                                                                                                         six months
Per-share data                                                                           For fiscal periods ended          ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           5/31/981        5/31/99       11/30/99
                                                                                                                        (unaudited)
<S>                                                                                       <C>              <C>            <C>
Net asset value, beginning of period ($)                                                    10.00            12.57          12.17
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income (loss) ($)                                                         (0.02)           (0.01)         (0.02)
   Net realized and unrealized gain (loss)
   on investment ($)                                                                         2.59            (0.08)          4.28
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                         2.57            (0.09)          4.26
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net realized gain ($)                                                                       --            (0.31)            --
Total distributions to shareholders ($)      .                                                 --            (0.31)            --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                          12.57            12.17          16.43
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                           25.70(2)         (0.49)          35.00(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                   188,932         286,082         442,122
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                                          1.19(3)         1.07           1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (loss) (%)                                                         (0.37)(3)       (0.42)         (0.37)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                        1.25(3)         1.07           1.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 6/16/97.
(2)   Not annualized.
(3)   Annualized.


24 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN TAX AWARE U.S. EQUITY FUND


Per-share data                                                                              For fiscal periods ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                               1997(1)      1998        1999
<S>                                                                                           <C>          <C>        <C>
Net asset value, beginning of period ($)                                                       10.00        12.57       15.19
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($)                                                                       0.06         0.08        0.10
   Net realized and unrealized gain
   on investment ($)                                                                            2.52         2.65        3.55
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                            2.58         2.73        3.65
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                                                   (0.01)      (0.11)      (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                             12.57        15.19       18.73
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
   Total return (%)                                                                            25.83(2)     21.81       24.05
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                       25,649       76,924     163,075
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                                             0.85(3)      0.85        0.85
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                                    0.70(3)      0.63        0.58
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                           2.16(3)      1.09        0.90
- ------------------------------------------------------------------------------------------------------------------------------------
   Portfolio turnover rate (%)                                                                    23           44          29
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 12/18/96.
(2)   Not annualized.
(3)   Annualized.


                                                               FUND DETAILS | 25
<PAGE>

- --------------------------------------------------------------------------------
FOR MORE INFORMATION
- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the funds, may be obtained by contacting:

J.P. Morgan Funds
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. Each
fund's investment company and 1933 Act registration numbers are:

J.P. Morgan Disciplined Equity Fund .................... 811-07340 and 033-54632
J.P. Morgan U.S. Equity Fund ........................... 811-07340 and 033-54632
J.P. Morgan U.S. Small Company Fund .................... 811-07340 and 033-54632
J.P. Morgan U.S. Small Company Opportunities Fund ...... 811-07340 and 033-54632
J.P. Morgan Tax Aware U.S. Equity Fund ................. 811-07795 and 333-11125

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


- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN U.S. EQUITY FUNDS


Disciplined Equity Fund
U.S. Equity Fund
U.S. Small Company Fund
U.S. Small Company Opportunities Fund
Tax Aware U.S. Equity Fund

                                          --------------------------------------
                                          Seeking to outperform U.S. stock
                                          markets over the long term through a
                                          disciplined management approach

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense for anyone to state or suggest otherwise.

Distributed by Funds Distributor, Inc.                                  JPMorgan
<PAGE>

CONTENTS
- --------------------------------------------------------------------------------


2 |  Each fund's goal, principal strategies, principal risks, performance and
     expenses


J.P. MORGAN U.S. EQUITY FUNDS
J.P. Morgan Disciplined Equity Fund .........................................  2
J.P. Morgan U.S. Equity Fund ................................................  4
J.P. Morgan U.S. Small Company Fund .........................................  6
J.P. Morgan U.S. Small Company Opportunities Fund ...........................  8
J.P. Morgan Tax Aware U.S. Equity Fund ...................................... 10

12 | Principles and techniques common to the funds in this prospectus

U.S. EQUITY MANAGEMENT APPROACH
J.P. Morgan ................................................................. 12
J.P. Morgan U.S. equity funds ............................................... 12
The spectrum of U.S. equity funds ........................................... 12
Who may want to invest ...................................................... 12
U.S. equity investment process .............................................. 13
Tax aware investing at J.P. Morgan .......................................... 13

14 | Investing in the J.P. Morgan U.S. Equity Funds

YOUR INVESTMENT
Investing through a financial professional .................................. 14
Investing through an employer-sponsored retirement plan ..................... 14
Investing through an IRA or rollover IRA .................................... 14
Investing directly .......................................................... 14
Opening your account ........................................................ 14
Adding to your account ...................................................... 14
Selling shares .............................................................. 15
Account and transaction policies ............................................ 15
Dividends and distributions ................................................. 16
Tax considerations .......................................................... 16

17 | More about risk and the funds' business operations

FUND DETAILS
Business structure .......................................................... 17
Management and administration ............................................... 17
Performance of private accounts ............................................. 18
Risk and reward elements .................................................... 20
Financial highlights ........................................................ 22

FOR MORE INFORMATION .................................................back cover
<PAGE>

J.P. MORGAN DISCIPLINED EQUITY FUND      | TICKER SYMBOL: JPEQX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a consistently high total return from a broadly
diversified portfolio of equity securities with risk characteristics similar to
the Standard & Poor's 500 Stock Index (S&P 500). This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the S&P 500.
The fund does not look to overweight or underweight industries.

Within each industry, the fund modestly overweights stocks that are ranked as
undervalued or fairly valued while modestly underweighting or not holding stocks
that appear overvalued. (The process used to rank stocks according to their
relative valuations is described on page 13.) Therefore, the fund tends to own a
larger number of stocks within the S&P 500 than the U.S. Equity Fund or the Tax
Aware U.S. Equity Fund.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings of that index, the fund seeks returns that modestly exceed those of
the S&P 500 over the long term with virtually the same level of volatility.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                           REGISTRANT: J.P. MORGAN FUNDS
                                           (J.P. MORGAN DISCIPLINED EQUITY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $26 billion using similar
strategies as the fund.


The portfolio management team is led by James C. Wiess and Timothy J. Devlin,
both vice presidents, who have been on the team since the fund's inception. Mr.
Wiess has been at J.P. Morgan since 1992, and prior to managing this fund
managed other structured equity portfolios for J.P. Morgan. Mr. Devlin has been
at J.P. Morgan since July of 1996, and prior to that time was an equity
portfolio manager at Mitchell Hutchins Asset Management Inc.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


2 | J.P. MORGAN DISCIPLINED EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Disciplined Equity Fund.


The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last two calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
S&P500 Index. This is a widely recognized, unmanaged index of U.S. stocks used
as a measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Total return (%)                                           Shows changes in returns by calendar year(1)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                      <C>         <C>
                                                                                                          1998        1999

40%
                                                                                                         31.98
30%

20%
                                                                                                                     18.02
10%

0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ]  J.P. Morgan Disciplined Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 22.83% (for the quarter ended 12/31/98); and the
lowest quarterly return was -9.96% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%)        Shows performance over time, for periods ended December 31, 1999
- -------------------------------------------------------------------------------------------------------
                                                                         Past 1 yr.     Life of fund(2)
<S>                                                                        <C>              <C>
J.P. Morgan Disciplined Equity Fund (after expenses)                       18.02            25.94
- -------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                21.04            25.81
- -------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(4) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.35
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.51
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.86

Fee waiver and
expense reimbursement(5)                                                    0.11
- --------------------------------------------------------------------------------
Net expenses(5)                                                             0.75
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
Expense example(5)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.


- --------------------------------------------------------------------------------
                       1 yr.       3 yrs.     5 yrs.      10 yrs.
Your cost($)            77          263        466        1,051
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 12/31/97.

(2)   Life of the fund performance is calculated commencing 1/31/97 as follows:
      all performance data from 12/31/97 is that of the fund, and for the period
      1/31/97 through 12/31/97, returns reflect performance of J.P. Morgan
      Institutional Disciplined Equity Fund (a separate feeder fund investing in
      the same master portfolio). These returns reflect lower operating expenses
      than those of the fund. Therefore, these returns may be higher than the
      fund's would have been had it existed during the same period.

(3)   The fund's fiscal year end is 5/31.


(4)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.

(5)   Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
      York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.75% of the fund's
      average daily net assets through 2/28/01.



                                         J.P. MORGAN DISCIPLINED EQUITY FUND | 3
<PAGE>

J.P. MORGAN U.S. EQUITY FUND                    | TICKER SYMBOL: PPEQX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of selected
equity securities. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund can moderately underweight or
overweight industries when it believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the investment process described on page 13. The fund
generally considers selling stocks that appear overvalued.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By emphasizing undervalued stocks, the fund seeks to produce returns that exceed
those of the S&P 500. At the same time, by controlling the industry weightings
of the fund so they can differ only moderately from the industry weightings of
the S&P 500, the fund seeks to limit its volatility to that of the overall
market, as represented by this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                                  REGISTRANT: J.P. MORGAN FUNDS
                                                  (J.P. MORGAN U.S. EQUITY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $17 billion using similar
strategies as the fund.

The portfolio management team is led by Henry D. Cavanna, managing director, who
joined the team in February of 1998, and has been at J.P. Morgan since 1971. He
has served as manager of U.S. equity portfolios prior to managing the fund.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


4 | J.P. MORGAN U.S. EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Equity Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the S&P500
Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%) Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>         <C>         <C>        <C>         <C>         <C>          <C>        <C>         <C>         <C>
           1990        1991        1992       1993        1994        1995         1996       1997        1998        1999

40%
                       34.12
                                                                      32.48
30%
                                                                                               28.41
                                                                                                          24.45
                                                                                   21.06
20%
                                                                                                                      14.69
                                              11.02
10%
                                   8.73
           1.38
0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                          (0.61)
(10%)
</TABLE>


[ ]  J.P. Morgan U.S. Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 21.33% (for the quarter ended 12/31/98); and the
lowest quarterly return was -11.83% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999(1)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          Past 1 yr.         Past 5 yrs.         Past 10 yrs.
<S>                                                                         <C>                 <C>                 <C>
J.P. Morgan U.S. Equity Fund (after expenses)                               14.69               24.07               16.97
- ------------------------------------------------------------------------------------------------------------------------------------
S&P500 Index  (no expenses)                                                 21.04               28.55               18.21
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.40

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.39
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          0.79
- --------------------------------------------------------------------------------

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                       1 yr.            3 yrs.         5 yrs.         10 yrs.
Your cost($)            81               252            439             978
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/18/93. For the period 1/1/89 through
      7/31/93 returns reflect performance of The Pierpont Equity Fund, the
      predecessor of the fund.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                                                J.P. MORGAN U.S. EQUITY FUND | 5
<PAGE>

J.P. MORGAN U.S. SMALL COMPANY FUND      | TICKER SYMBOL: PPCAX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of small
company stocks. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in small and medium sized U.S. companies whose market
capitalizations are greater than $100 million and less than $2 billion. Industry
by industry, the fund's weightings are similar to those of the Russell 2000
Index. The fund can moderately underweight or overweight industries when it
believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the process described on page 13. The fund generally
considers selling stocks that appear overvalued or have grown into large-cap
stocks.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

Small-cap stocks have historically offered higher long-term growth than
large-cap stocks, and have also involved higher risks. The fund's small-cap
emphasis means it is likely to be more sensitive to economic news and is likely
to fall further in value during broad market downturns. The fund pursues returns
that exceed those of the Russell 2000 Index while seeking to limit its
volatility relative to this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                           REGISTRANT: J.P. MORGAN FUNDS
                                           (J.P. MORGAN U.S. SMALL COMPANY FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $4.5 billion using similar
strategies as the fund.


The portfolio management team is led by Marian U. Pardo, managing director, and
Alexandra F. Wells, vice president. Ms. Pardo has been at J.P. Morgan since
1968, except for five months in 1998 when she was president of a small
investment management firm. Prior to managing the fund, Ms. Pardo managed small
and large cap equity portfolios, equity and convertible funds, and several
institutional portfolios. Ms.Wells joined the team in March 1998 and has been
with J.P. Morgan since 1992. Prior to managing the fund, Ms. Wells managed large
cap equity portfolios, and prior to that served as an equity research analyst.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


6 | J.P. MORGAN U.S. SMALL COMPANY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Small Company Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Russell
2000 Index. This is a widely recognized, unmanaged index of small cap U.S.
stocks used as a measure of overall U.S. small company stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%)                                                        Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>         <C>         <C>        <C>         <C>         <C>          <C>        <C>         <C>         <C>
           1990        1991        1992       1993        1994        1995         1996       1997        1998        1999


60%
                       59.59
                                                                                                                      44.00
                                                                      31.86
30%
                                                                                              22.75
                                                                                   20.75
                                   18.98
                                              8.58
0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          (5.49)
                                                          (5.89)
           (24.34)
(30%)
</TABLE>



[ ]  J.P. Morgan U.S. Small Company Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 34.68% (for the quarter ended 12/31/99); and the
lowest quarterly return was -30.03% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%)                                  Shows performance over time, for periods ended December 31, 1999(1)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                             Past 1 yr.          Past 5 yrs.         Past 10 yrs.
<S>                                                                            <C>                  <C>                  <C>
J.P. Morgan U.S. Small Company Fund (after expenses)                           44.00                21.61                14.59
- ------------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index  (no expenses)                                              21.76                16.69                13.40
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.60

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.42
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                         1.02

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                    1 yr.          3 yrs.         5 yrs.         10 yrs.
Your cost($)        104             325            563            1,248
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/19/93. For the period 1/1/89 through
      7/31/93 returns reflect performance of The Pierpont Capital Appreciation
      Fund, the predecessor of the fund.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                                         J.P. MORGAN U.S. SMALL COMPANY FUND | 7
<PAGE>

J.P. MORGAN U.S. SMALL COMPANY
OPPORTUNITIES FUND                             | TICKER SYMBOL: JPSOX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide long-term growth from a portfolio of small company
growth stocks. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in stocks of small U.S. companies whose market
capitalization is greater than $150 million and less than $1.25 billion when
purchased. While the fund holds stocks in many industries to reduce the impact
of poor performance in any one sector, it tends to emphasize industries with
higher growth potential and does not track the sector weightings of the overall
small company stock market.

In searching for companies, the fund combines the approach described on page 13
with a growth-oriented approach that focuses on each company's business
strategies and its competitive environment. The fund seeks to buy stocks when
they are undervalued or fairly valued and are poised for long-term growth.
Stocks become candidates for sale when they appear overvalued or when the
company is no longer a small-cap company, but the fund may also continue to hold
them if it believes further substantial growth is possible.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

Small-cap stocks have historically offered higher long-term growth than medium-
or large-cap stocks, and have also involved higher risks. The fund's small-cap
emphasis means it is likely to be more sensitive to economic news and is likely
to fall further in value during broad market downturns. Because the fund seeks
to outperform the Russell 2000 Growth Index while not tracking its industry
weightings, investors should expect higher volatility compared to this index or
to more conservatively managed small-cap funds.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                                                 REGISTRANT: J.P. MORGAN FUNDS
                                                 (J.P. MORGAN U.S. SMALL COMPANY
                                                 OPPORTUNITIES FUND)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $2 billion using similar
strategies as the fund.

The portfolio management team is led by Marian U. Pardo, managing director,
Saira Malik, vice president and CFA, and Carolyn Jones, associate. Ms. Pardo has
been at J.P. Morgan since 1968, except for five months in 1998 when she was
president of a small investment management firm. Prior to managing the fund, Ms.
Pardo managed small and large cap equity portfolios, equity and convertible
funds, and several institutional portfolios. Ms. Malik has been with J.P. Morgan
since July 1995 as a small company equity analyst and portfolio manager after
graduating from the University of Wisconsin with an M.S. in finance. Ms. Jones
has been with J.P. Morgan since July 1998. Prior to managing this fund, Ms.
Jones served as a portfolio manager in J.P. Morgan's private banking group and
as a product specialist at Merrill Lynch Asset Management.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


8 | J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan U.S. Small Company Opportunities Fund.


The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last two calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
Russell 2000 Growth Index. This is a widely recognized, unmanaged index of small
cap U.S. growth stocks used as a measure of overall U.S. small cap growth stock
performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%) Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                       <C>         <C>
                                                                                                          1998        1999


80%
                                                                                                                      61.63
60%

40%

20%
                                                                                                          5.21
0%
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

[ ]  J.P. Morgan U.S. Small Company Opportunities Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 23.09% (for the quarter ended 12/31/98); and the lowest quarterly
return was -20.19% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Past 1 yr.              Life of fund(1)
<S>                                                                                     <C>                        <C>
J.P. Morgan U.S. Small Company Opportunities Fund (after expenses)                      61.63                      30.85
- ------------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Growth Index  (no expenses)                                                43.09                      19.31
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.60

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.47
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          1.07

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                    1 yr.          3 yrs.         5 yrs.         10 yrs.
Your cost($)        109             340            590            1,306
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 6/16/97 and returns reflect performance
      of the fund from 6/30/97.

(2)   The fund's fiscal year end is 5/31.

(3)   The fund has a master/feeder structure as described on page 17. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of the fund's average net
      assets.


                           J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND | 9
<PAGE>

J.P. MORGAN TAX AWARE
U.S. EQUITY FUND       | TICKER SYMBOL: JPTAX
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high after tax total return from a portfolio of
selected equity securities. This goal can be changed without shareholder
approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund can moderately underweight or
overweight industries when it believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the investment process described on page 13. The fund
generally considers selling stocks that appear overvalued.

To this investment approach the fund adds the element of tax aware investing.
The fund's tax aware investment strategies are described on page 13.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By emphasizing undervalued stocks, the fund seeks to produce returns that exceed
those of the S&P 500. At the same time, by controlling the industry weightings
of the fund so that they differ only moderately from the industry weightings of
the S&P 500, the fund seeks to limit its volatility to that of the overall
market, as represented by this index. The fund's tax aware strategies may reduce
your capital gains but will not eliminate them. Maximizing after-tax returns may
require trade-offs that reduce pre-tax returns.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

                         REGISTRANT: J.P. MORGAN SERIES TRUST
                         (J.P. MORGAN TAX AWARE U.S. EQUITY FUND: SELECT SHARES)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $820 million using similar
strategies as the fund.


The portfolio management team is led by Terry E. Banet, vice president, and
Louise Sclafani, vice president. Ms. Banet has been on the team since the fund's
inception in December 1996, and has been at J.P. Morgan since 1985. Prior to
managing this fund, Ms. Banet managed tax aware accounts and helped develop
Morgan's tax aware equity process. Ms. Sclafani has been at J.P. Morgan since
1994. Prior to managing this fund, Ms. Sclafani was an equity analyst and
portfolio manager at Brundage, Story and Rose.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


10 | J.P. MORGAN TAX AWARE U.S. EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Tax Aware U.S. Equity Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 3 calendar
years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and the life of the fund compare to those of the S&P
500 Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
Year-by-year total return (%)                                                        Shows changes in returns by calendar year(1)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                           <C>         <C>         <C>
                                                                                              1997        1998        1999

40%
                                                                                                          31.18
                                                                                              30.32
20%
                                                                                                                      18.31
0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

[ ]  J.P. Morgan Tax Aware U.S. Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 21.64% (for the quarter ended 12/31/98) and the
lowest quarterly return was -8.86%(for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%) Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Past 1 yr.                Life of fund(1)
<S>                                                                                   <C>                          <C>
J.P. Morgan Tax Aware U.S. Equity Fund (after expenses)                               18.31                        26.46
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                           21.04                        27.56
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Shareholder transaction expenses(3)
- --------------------------------------------------------------------------------
Redemption fees (% of your cash proceeds)
- --------------------------------------------------------------------------------
Shares held for less than one year                                          1.00

Shares held one year or longer                                              none

Annual expenses (% of fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.45

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.45
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.90

Fee waiver and expense
reimbursement(3)                                                            0.05
- --------------------------------------------------------------------------------
Net expenses(3)                                                             0.85

Expense example(3)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. In the one year example, the first number
assumes that you continued to hold your shares, the second that you sold all
shares for cash at the end of the 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($)               89/189        284            496            1,105
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 12/18/96, and returns reflect performance
      of the fund from 12/31/96.

(2)   The fund's fiscal year end is 10/31.


(3)   Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
      York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.85% of the fund's
      average daily net assets through 2/28/01.



                                     J.P. MORGAN TAX AWARE U.S. EQUITY FUND | 11
<PAGE>


U.S. EQUITY 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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN U.S.EQUITY FUNDS
These funds invest primarily in U.S. stocks either directly or through another
fund. As a shareholder, you should anticipate risks and rewards beyond those of
a typical bond fund or a typical balanced fund.

THE SPECTRUM OF U.S. EQUITY FUNDS
The funds described in this prospectus pursue a range of goals and offer varying
degrees of risk and potential reward. Differences between these funds include:

o how much emphasis they give to the most undervalued stocks

o how closely they follow the industry weightings of their benchmarks

o how many securities they typically maintain in their portfolios

o the size or market capitalization of the companies in which they invest

o whether they focus on before-tax or after-tax returns

The table below shows degrees of the relative risk and return that these funds
potentially offer. These and other distinguishing features of each U.S. equity
fund are described on the following pages.

Potential risk and return
- --------------------------------------------------------------------------------
The positions of the funds in this graph reflect long-term performance goals
only and are relative, not absolute.

      ^
      |-------------------- U.S. Small Company Opportunities Fund o
      |                                                           |
      |                                                           |
      |---------------------U.S. Small Company Fund o             |
  R   |                                             |             |
  e   |                                             |             |
  t   |-------------------------------------oo  Tax Aware U.S. Equity Fund
  u   |                                      |  U.S. Equity Fund  |
  r   |                                      |      |             |
  n   |                                      |      |             |
      |-----------------------------o Disciplined Equity Fund     |
      |                             |        |      |             |
      |                             |        |      |             |
      |                             |        |      |             |
      -------------------------------------------------------------------->
                                   Risk
- --------------------------------------------------------------------------------
Who May Want To Invest

The funds are designed for investors who:

o are pursuing a long-term goal such as retirement

o want to add an investment with growth potential to further diversify a
  portfolio

o want funds that seek to outperform the markets in which they each invest over
  the long term

o with regard to the Tax Aware Fund, are individuals that could benefit from a
  strategy that pursues returns from an after-tax perspective

The funds are not designed for investors who:

o want funds that pursue market trends or focus only on particular industries or
  sectors

o require regular income or stability of principal

o are pursuing a short-term goal or investing emergency reserves

o with regard to the Tax Aware Fund, are investing through a tax-deferred
  account such as an IRA.


12 | U.S. Equity MANAGEMENT APPROACH
<PAGE>

- --------------------------------------------------------------------------------
U.S. EQUITY INVESTMENT PROCESS

The J.P. Morgan U.S. equity funds invest primarily in U.S. stocks. The Tax Aware
Fund does so while seeking to enhance after-tax returns.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor, focuses
on stock picking while largely avoiding sector or market-timing strategies.

In managing the funds, J.P. Morgan employs a three-step process:

[GRAPHIC OMITTED] | J.P. Morgan analysts develop proprietary fundamental
                    research

Research J.P. Morgan takes an in-depth look at company prospects over a
relatively long period -- often as much as five years -- rather than focusing on
near-term expectations. This approach is designed to provide insight into a
company's real growth potential. J.P. Morgan's in-house research is developed by
an extensive worldwide network of over 120 career analysts. The team of analysts
dedicated to U.S. equities includes more than 20 members, with an average of
over ten years of experience.

[GRAPHIC OMITTED] | Stocks in each industry are ranked with the help of models

Valuation The research findings allow J.P. Morgan to rank the companies in each
industry group according to their relative value. The greater a company's
estimated worth compared to the current market price of its stock, the more
undervalued the company. The valuation rankings are produced with the help of a
variety of models that quantify the research team's findings.

[GRAPHIC OMITTED] | Using research and valuations, each fund's management team
                    chooses stocks for its fund

Stock selection Each fund buys and sells stocks according to its own policies,
using the research and valuation rankings as a basis. In general, each
management team buys stocks that are identified as undervalued and considers
selling them when they appear overvalued. Along with attractive valuation, the
funds' managers often consider a number of other criteria:

o catalysts that could trigger a rise in a stock's price

o high potential reward compared to potential risk

o temporary mispricings caused by market overreactions.

- --------------------------------------------------------------------------------
TAX AWARE INVESTING AT J.P. MORGAN

The Tax Aware U.S. Equity Fund is designed to reduce, but not eliminate, capital
gains distributions to shareholders. In doing so, the fund sells securities when
the anticipated performance benefit justifies the resulting tax liability. This
strategy often includes holding securities long enough to avoid higher,
short-term capital gains taxes, selling shares with a higher cost basis first,
and offsetting gains realized in one security by selling another security at a
capital loss. The fund is aided in this process by a tax-sensitive optimization
model developed by J.P. Morgan.

The Tax Aware U.S. Equity Fund generally intends to pay redemption proceeds in
cash; however it reserves the right at its sole discretion to pay redemptions
over $250,000 in-kind as a portfolio of representative stocks rather than cash.
An in-kind redemption payment can shield the fund -- and other shareholders --
from tax liabilities that might otherwise be incurred. It is not subject to a
redemption fee by the fund. However, the stocks received will continue to
fluctuate in value after redemption and will be subject to brokerage or other
transaction costs when liquidated.


                                            U.S. EQUITY MANAGEMENT APPROACH | 13
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Choose a fund (or funds) and determine the amount you are investing. The
  minimum amount for initial investments in a fund is $2,500 and for additional
  investments $500, although these minimums may be less for some investors. For
  more information on minimum investments, call 1-800-521-5411.

o Complete the application, indicating how much of your investment you want to
  allocate to which fund(s). Please apply now for any account privileges you may
  want to use in the future, in order to avoid the delays associated with adding
  them later on.

o Mail in your application, making your initial investment as shown on the
  right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

OPENING YOUR ACCOUNT

  By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place a
  purchase order. Funds that are wired without a purchase order will be returned
  uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
  your investment to:

State Street Bank & Trust Company
Routing number: 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

o Make out a check for the investment amount payable to J.P. Morgan Funds

o Mail the check with your completed application to the Transfer Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
  wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
  amount of your investment as


14 | 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 cash amount, payable to the registered
  owner(s), will be mailed to the address of record. For checks payable to any
  other party or mailed to any other address, please make your request in
  writing (see below).

  In writing

o Write a letter of instruction that includes the following information: The
  name of the registered owner(s) of the account; the account number; the fund
  name; the amount you want to sell; and the recipient's name and address or
  wire information, if different from those of the account registration.

o Indicate whether you want the proceeds sent by check or by wire.

o Make sure the letter is signed by an authorized party.
  The Shareholder Services Agent may require additional information, such as a
  signature guarantee.

o Mail the letter to the Shareholder Services Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

  Redemption in kind

     o Each fund  reserves  the right to make  redemptions  of over  $250,000 in
securities rather than in cash.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business days and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE(normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using market quotes or pricing services. When
these methods are not available or do not represent a security's value at the
time of pricing (e.g., when an event occurs after the close of trading that
would materially impact a security's value), the security is valued in
accordance with the fund's fair valuation procedures.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares, as
permitted by law, and to postpone payment of proceeds for up to seven days.

- --------------------------------------------------------------------------------
Transfer Agent
State Street Bank and Trust Company
P.O. Box 8411
Boston, MA 02266-8411
Attention: J.P. Morgan Funds Services

Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
1-800-521-5411

Representatives are available 8:00 a.m. to 5:00 p.m. eastern time on fund
business days.


                                                            YOUR INVESTMENT | 15
<PAGE>

- --------------------------------------------------------------------------------
Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, cash proceeds are generally available the day following
execution and will be forwarded according to your instructions. In-kind
redemptions (described on page 13) will be available as promptly as is feasible.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), each fund reserves the right to request that you buy more shares
or close your account. If your account balance is still below the minimum 60
days after notification, each fund reserves the right to close out your account
and send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS

Income dividends are typically paid four times a year for the Disciplined
Equity, U.S. Equity and Tax Aware U.S. Equity funds; and twice a year for the
U.S. Small Company and U.S. Small Company Opportunities funds. Each fund
typically makes capital gains distributions, if any, once per year. However, a
fund may make more or fewer payments in a given year, depending on its
investment results and its tax compliance situation. Each fund's dividends and
distributions consist of most or all of its 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 for cash, exchanging shares, and receiving
distributions (whether reinvested or taken in cash) are all taxable events.
These transactions typically create the following tax liabilities for taxable
accounts:

- --------------------------------------------------------------------------------
Transaction                             Tax status

Income dividends                        Ordinary income

Short-term capital gains                Ordinary income
distributions

Long-term capital gains                 Capital gains
distributions

Sales or exchanges of shares            Capital gains or losses
owned for more than one year

Sales or exchanges of shares            Gains are treated as ordinary
owned for one year                      or less income; losses are subject
                                        to special rules

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution.

Every January, each fund issues tax information on its distributions for the
previous year.

Any investor for whom a fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.

The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.

Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.


16 | YOUR INVESTMENT
<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------

BUSINESS STRUCTURE

As noted earlier, each fund (except the Tax Aware U.S. Equity Fund) is a series
of J.P. Morgan Funds, a Massachusetts business trust, and is a "feeder" fund
that invests in a master portfolio. (Except where indicated, this prospectus
uses the term "the fund" to mean the feeder fund and its master portfolio taken
together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-521-5411. Generally, when a master
portfolio seeks a vote, its feeder fund will hold a shareholder meeting and cast
its vote proportionately, as instructed by its shareholders. Fund shareholders
are entitled to one full or fractional vote for each dollar or fraction of a
dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether a fund should hire its own investment adviser,
invest in a different master portfolio, or take other action.

The Tax Aware U.S. Equity 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.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers.

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:

Advisory services                 Percentage of the master
                                  portfolio's average net assets
Disciplined Equity                0.35%
U.S. Equity                       0.40%
U.S. Small Company                0.60%
U.S. Small Company                0.60%
Opportunities

Administrative services           Master portfolio's and fund's
(fee shared with Funds            pro-rata portions of 0.09% of the
Distributor, Inc.)                first $7 billion in 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

The Tax Aware U.S. Equity Fund, subject to the expense reimbursements described
earlier in this prospectus, pays J.P. Morgan the following fees for investment
advisory and other services:

Advisory services                 0.45% 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 of average net
billion Distributor, Inc.)        assets in 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 a fund.



                                                               FUND DETAILS | 17
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE OF PRIVATE ACCOUNTS


The Disciplined Equity Fund's investment objective and policies are
substantially similar to those used by J.P. Morgan in managing certain
discretionary investment management accounts. The chart below shows the
historical investment performance for a composite of these private accounts (the
"Disciplined Equity Composite") and for the fund's benchmark index.

The performance of the Disciplined Equity Composite does not represent the
fund's performance nor should it be interpreted as indicative of the fund's
future performance. The accounts in the Disciplined Equity Composite are not
subject to the same regulatory requirements and limitations imposed on mutual
funds. If the accounts included in the Disciplined Equity Composite had been
subject to these regulatory requirements and limitations, their performance
might have been lower.

Additionally, although it is anticipated that the fund and the Disciplined
Equity Composite will hold similar securities, their investment results are
expected to differ. In particular, difference in asset size and cash flow
resulting from purchases and redemptions of fund shares may result in different
securities selections, differences in the relative weightings of securities or
differences in the prices paid for particular fund holdings.

The performance of the Disciplined Equity Composite reflects the deductions of
the fund's total operating expenses, after expense reimbursement, and the
reinvestment of dividends and other distributions. The performance information
is the average annual total return of the Disciplined Equity Composite for the
periods indicated.


<TABLE>
<CAPTION>
                                           Annual Total Returns for the Year Ended December 31,
<S>                          <C>       <C>      <C>       <C>       <C>       <C>       <C>        <C>       <C>       <C>

                             1990      1991     1992      1993      1994      1995      1996       1997      1998      1999
Disciplined Equity
Composite                   -3.24%   30.01%    11.42%     9.87%    1.90%     37.47%    22.90%    32.97%    31.52%    18.47%
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500                     -3.11%   30.47%     7.62%    10.08%    1.32%     37.58%    22.96%    33.36%    28.58%    21.04%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The  Disciplined  Equity  Composite  currently  includes all  discretionary
accounts managed by J.P. Morgan using substantially  similar investment strategy
as the Disciplined  Equity Fund. The inception date for the  Disciplined  Equity
Composite  was October 31, 1989.  Prior to January 1, 1993 the composite may not
have included all discretionary accounts.



18 | YOUR INVESTMENT
<PAGE>

- --------------------------------------------------------------------------------

                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)


                                                                            | 19
<PAGE>

RISK AND REWARD ELEMENTS

This table discusses the main elements that make up each fund's overall risk and
reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Potential risks                           | Potential rewards                     | Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Market conditions

o  Each fund's share price and              o  Stocks have generally                o  Under normal circumstances the
   performance will fluctuate in               outperformed more stable invest-        funds plan to remain fully
   response to stock market                    ments (such as bonds and cash           invested, with at least 65% in
   movements                                   equivalents) over the long term         stocks; stock investments may
                                                                                       include U.S. and foreign common
o  Adverse market conditions may                                                       stocks, convertible securities,
   from time to time cause a fund                                                      preferred stocks, trust or
   to take temporary defensive                                                         partnership interests, warrants,
   positions that are inconsistent                                                     rights, and investment company
   with its principal investment                                                       securities
   strategies and may hinder a fund
   from achieving its investment                                                    o  The funds seek to limit risk
   objective                                                                           through diversification

                                                                                    o  During severe market downturns,
                                                                                       the funds have the option of
                                                                                       investing up to 100% of assets
                                                                                       in investment-grade short-term
                                                                                       securities

Management choices

o  A fund could underperform its            o  A fund could outperform its          o  J.P. Morgan focuses its active
   benchmark due to its securities             benchmark due to these same             management on securities
   and asset allocation choices                choices                                 selection, the area where it
                                                                                       believes its commitment to
                                                                                       research can most enhance
                                                                                       returns

Foreign investments

o  Currency exchange rate movements         o  Favorable exchange rate              o  Each fund anticipates that its
   could reduce gains or create                movements could generate gains          total foreign investments will
   losses                                      or reduce losses                        not exceed 20% of assets

o  A fund could lose money because          o  Foreign investments, which           o  Each fund actively manages the
   of foreign government actions,              represent a major portion of the        currency exposure of its foreign
   political instability, or lack              world's securities, offer               investments relative to its
   of adequate and accurate                    attractive potential performance        benchmark, and may hedge back
   information                                 and opportunities for                   into the U.S. dollar from time
                                               diversification                         to time (see also "Derivatives")

When-issued and delayed
delivery securities

o  When a fund buys securities              o  A fund can take advantage of         o  Each fund uses segregated
   before issue or for delayed                 attractive transaction                  accounts to offset leverage risk
   delivery, it could be exposed to            opportunities
   leverage risk if it does not use
   segregated accounts

Short-term trading


o  Increased trading would raise a          o  A fund could realize gains in a      o  The funds generally avoid
   fund's brokerage and related                short period of time                    short-term trading, except to
   costs                                                                               take advantage of attractive or
                                            o  A fund could protect against            unexpected opportunities or to
o  Increased short-term capital                losses if a stock is overvalued         meet demands generated by
   gains distributions would raise             and its value later falls               shareholder activity. The
   shareholders' income tax                                                            turnover rate for each fund for
   liability                                                                           its most recent fiscal year end
                                                                                       is as follows: Disciplined
Policies to balance risk and reward                                                    Equity (51%), U.S. Equity (84%),
                                                                                       U.S. Small Company (104%), U.S.
                                                                                       Small Company Opportunities
                                                                                       (116%), and Tax Aware U.S.
                                                                                       Equity (29%)
</TABLE>



20 | FUND DETAILS
<PAGE>

- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Potential risks                           | Potential rewards                     | Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Derivatives

o  Derivatives such as futures,             o  Hedges that correlate well with      o  The funds use derivatives for
   options, swaps, and forward                 underlying positions can reduce         hedging and for risk management
   foreign currency contracts that             or eliminate losses at low cost         (i.e., to establish or adjust
   are used for hedging the                                                            exposure to particular
   portfolio or specific securities         o  A fund could make money and             securities, markets or
   may not fully offset the                    protect against losses if               currencies); risk management may
   underlying positions1 and this              management's analysis proves            include management of a fund's
   could result in losses to the               correct                                 exposure relative to its
   fund that would not have                                                            benchmark (the U.S. Small
   otherwise occurred                       o  Derivatives that involve                Company Opportunities Fund is
                                               leverage could generate                 permitted to use derivatives,
o  Derivatives used for risk                   substantial gains at low cost           however, it has no current
   management may not have the                                                         intention to do so)
   intended effects and may result
   in losses or missed                                                              o  The funds only establish hedges
   opportunities                                                                       that they expect will be highly
                                                                                       correlated with underlying
o  The counterparty to a                                                               positions
   derivatives contract could
   default                                                                          o  While the funds may use
                                                                                       derivatives that incidentally
o  Derivatives that involve                                                            involve leverage, they do not
   leverage could magnify losses                                                       use them for the specific
                                                                                       purpose of leveraging their
o  Certain types of derivatives                                                        portfolios
   involve costs to the funds which
   can reduce returns

Securities lending

o  When a fund lends a security,            o  A fund may enhance income            o  J.P. Morgan maintains a list of
   there is a risk that the loaned             through the investment of the           approved borrowers
   securities may not be returned              collateral received from the
   if the borrower defaults                    borrower                             o  The fund receives collateral
                                                                                       equal to at least 100% of the
o  The collateral will be subject                                                      current value of securities
   to the risks of the securities                                                      loaned
   in which it is invested
                                                                                    o  The lending agents indemnify a
                                                                                       fund against borrower default

                                                                                    o  J.P. Morgan's collateral
                                                                                       investment guidelines limit the
                                                                                       quality and duration of
                                                                                       collateral investment to
                                                                                       minimize losses

                                                                                    o  Upon recall, the borrower must
                                                                                       return the securities loaned
                                                                                       within the normal settlement
                                                                                       period

Illiquid holdings

o  A fund could have difficulty             o  These holdings may offer more        o  No fund may invest more than 15%
   valuing these holdings precisely            attractive yields or potential          of net assets in illiquid
                                               growth than comparable widely           holdings
o  A fund could be unable to sell              traded securities
   these holdings at the time or                                                    o  To maintain adequate liquidity
   price it desires                                                                    to meet redemptions, each fund
                                                                                       may hold investment-grade
Policies to balance risk and reward                                                    short-term securities (including
                                                                                       repurchase agreements and
                                                                                       reverse repurchase agreements)
                                                                                       and, for temporary or
                                                                                       extraordinary purposes, may
                                                                                       borrow from banks up to 331/3%
                                                                                       of the value of its total assets
</TABLE>

(1)   A futures contract is an agreement to buy or sell a set quantity of an
      underlying instrument at a future date, or to make or receive a cash
      payment based on changes in the value of a securities index. An option is
      the right to buy or sell a set quantity of an underlying instrument at a
      pre-determined price. A swap is a privately negotiated agreement to
      exchange one stream of payments for another. A forward foreign currency
      contract is an obligation to buy or sell a given currency on a future date
      and at a set price.


                                                               FUND DETAILS | 21
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The financial tables are intended to help you understand each fund's financial
performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends are distributions). Except where noted, this information has been
audited by PricewaterhouseCoopers LLP, whose reports, along with each fund's
financial statements, are included in the respective fund's annual report which
are available upon request.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN DISCIPLINED EQUITY FUND
                                                                                                                         For the
                                                                                                                        six months
Per-share data                                                                            For fiscal periods ended         ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            5/31/98(1)      5/31/99      11/30/99
                                                                                                                        (unaudited)
<S>                                                                                            <C>           <C>          <C>
Net asset value, beginning of period ($)                                                       12.98         14.95        18.22
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                                    0.03          0.12         0.09
   Net realized and unrealized gain
   on investment ($)                                                                            1.96          3.28         0.83
Total from investment operations ($)                                                            1.99          3.40         0.92
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                                                   (0.02)        (0.09)       (0.09)
   Net realized gains ($)                                                                         --         (0.04)          --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                                        (0.02)        (0.13)       (0.09)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                             14.95         18.22        19.05
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                               15.33(2)      22.86         4.09(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                       18,037       120,592      181,547
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                                             0.75(3)       0.75         0.72(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                                    1.00(3)       0.89         0.73(3)
   Expenses without reimbursement (%)                                                           3.28(3)       0.86         0.76(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)     The fund commenced operations on 12/31/97.
(2)     Not annualized.
(3)     Annualized.


22 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. EQUITY FUND
                                                                                                                        For the
                                                                                                                       six months
Per-share data                                                                      For fiscal periods ended              ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                         5/31/95  5/31/96  5/31/97   5/31/98   5/31/99  11/30/99
                                                                                                                       (unaudited)
<S>                                                                     <C>       <C>      <C>       <C>       <C>      <C>
Net asset value, beginning of period ($)                                  19.38     19.42    22.15     24.63     25.66    25.09
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                               0.32      0.38     0.25      0.18      0.18     0.09
   Net realized and unrealized gain
   on investment ($)                                                       2.17      4.23     4.72      5.92      3.91     0.31
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                       2.49      4.61     4.97      6.10      4.09     0.40
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                              (0.28)    (0.29)   (0.36)    (0.23)    (0.19)   (0.05)
   Net realized gains ($)                                                 (2.17)    (1.59)   (2.13)    (4.84)    (4.47)      --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                   (2.45)    (1.88)   (2.49)    (5.07)    (4.66)   (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                        19.42     22.15    24.63     25.66     25.09    25.44
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                          15.11     25.18    25.00     28.35     18.39     1.59(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                 259,338   330,014  362,603   448,144   440,965  434,371
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                        0.90      0.81     0.80      0.78      0.79     0.78(2)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                               1.74      1.87     1.13      0.71      0.70     0.68(2)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                      0.91      0.81     0.80      0.78      0.79     0.78(2)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Not annualized.
(2)   Annualized.


                                                               FUND DETAILS | 23
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. SMALL COMPANY FUND
                                                                                                                        For the
                                                                                                                       six months
Per-share data                                                                     For fiscal periods ended               ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                     5/31/95    5/31/96   5/31/97   5/31/98   5/31/99   11/30/99
                                                                                                                       (unaudited)
<S>                                                                 <C>        <C>       <C>       <C>       <C>       <C>
Net asset value, beginning of period ($)                              21.40      22.02     26.20     26.04     27.68     21.54
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                           0.22       0.26      0.18      0.11      0.08     (0.00)(1)
   Net realized and unrealized gain (loss)
   on investment ($)                                                   2.13       6.96      2.00      5.58     (3.30)     5.93
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                   2.35       7.22      2.18      5.69     (3.22)     5.93
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                 .                        (0.21)     (0.26)    (0.21)    (0.14)    (0.08)    (0.01)
   Net realized gain ($)                                              (1.52)     (2.78)    (2.13)    (3.91)    (2.84)       --
Total distributions to shareholders ($)      .                        (1.73)     (3.04)    (2.34)    (4.05)    (2.92)    (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                    22.02      26.20     26.04     27.68     21.54     27.46
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                      12.28      35.48      9.49     23.37    (10.95)    27.54(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                             179,130    220,917   237,985   261,804   186,879   252,971
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                    0.90       0.90      0.90      0.97      1.02      1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (loss) (%)                                    1.02       1.10      0.71      0.39      0.34      0.22(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                  1.12       1.03      1.03      1.03      1.02      1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Less than 0.01.
(2)   Not annualized.
(3)   Annualized.

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND
                                                                                                                          For the
                                                                                                                         six months
Per-share data                                                                           For fiscal periods ended          ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           5/31/981        5/31/99       11/30/99
                                                                                                                        (unaudited)
<S>                                                                                       <C>              <C>            <C>
Net asset value, beginning of period ($)                                                    10.00            12.57          12.17
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income (loss) ($)                                                         (0.02)           (0.01)         (0.02)
   Net realized and unrealized gain (loss)
   on investment ($)                                                                         2.59            (0.08)          4.28
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                         2.57            (0.09)          4.26
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net realized gain ($)                                                                       --            (0.31)            --
Total distributions to shareholders ($)      .                                                 --            (0.31)            --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                          12.57            12.17          16.43
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                           25.70(2)         (0.49)          35.00(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                   188,932         286,082         442,122
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                                          1.19(3)         1.07           1.00(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (loss) (%)                                                         (0.37)(3)       (0.42)         (0.37)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                        1.25(3)         1.07           1.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 6/16/97.
(2)   Not annualized.
(3)   Annualized.


24 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN TAX AWARE U.S. EQUITY FUND


Per-share data                                                                              For fiscal periods ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                               1997(1)      1998        1999
<S>                                                                                           <C>          <C>        <C>
Net asset value, beginning of period ($)                                                       10.00        12.57       15.19
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($)                                                                       0.06         0.08        0.10
   Net realized and unrealized gain
   on investment ($)                                                                            2.52         2.65        3.55
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                            2.58         2.73        3.65
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                                                                   (0.01)      (0.11)      (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                             12.57        15.19       18.73
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
   Total return (%)                                                                            25.83(2)     21.81       24.05
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                       25,649       76,924     163,075
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                                                             0.85(3)      0.85        0.85
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                                    0.70(3)      0.63        0.58
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                           2.16(3)      1.09        0.90
- ------------------------------------------------------------------------------------------------------------------------------------
   Portfolio turnover rate (%)                                                                    23           44          29
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 12/18/96.
(2)   Not annualized.
(3)   Annualized.


                                                               FUND DETAILS | 25
<PAGE>

- --------------------------------------------------------------------------------
FOR MORE INFORMATION
- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the funds, may be obtained by contacting:

J.P. Morgan Funds
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. Each
fund's investment company and 1933 Act registration numbers are:

J.P. Morgan Disciplined Equity Fund .................... 811-07340 and 033-54632
J.P. Morgan U.S. Equity Fund ........................... 811-07340 and 033-54632
J.P. Morgan U.S. Small Company Fund .................... 811-07340 and 033-54632
J.P. Morgan U.S. Small Company Opportunities Fund ...... 811-07340 and 033-54632
J.P. Morgan Tax Aware U.S. Equity Fund ................. 811-07795 and 333-11125

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

<PAGE>



- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL
U.S. EQUITY FUNDS


Disciplined Equity Fund
U.S. Equity Fund
U.S. Small Company Fund
Tax Aware Disciplined Equity Fund
SmartIndex(TM) Fund

                                        ----------------------------------------
                                        Seeking to outperform U.S. stock markets
                                        over the long term through a disciplined
                                        management approach

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense for anyone to state or suggest otherwise.

Distributed by Funds Distributor, Inc.                                  JPMorgan
<PAGE>
- --------------------------------------------------------------------------------
<PAGE>

CONTENTS
- --------------------------------------------------------------------------------
2 | Each fund's goal, principal strategies, principal risks, performance and
    expenses

J.P. MORGAN INSTITUTIONAL U.S. EQUITY FUNDS
J.P. Morgan Institutional Disciplined Equity Fund............................  2
J.P. Morgan Institutional U.S. Equity Fund...................................  4
J.P. Morgan Institutional U.S. Small Company Fund............................  6
J.P. Morgan Institutional Tax Aware Disciplined Equity Fund..................  8
J.P. Morgan Institutional SmartIndex(TM)Fund................................. 10

12 | Principles and techniques common to the funds in this prospectus

U.S. EQUITY MANAGEMENT APPROACH
J.P. Morgan.................................................................. 12
J.P. Morgan U.S. equity funds................................................ 12
The spectrum of U.S. equity funds............................................ 12
Who may want to invest....................................................... 12
U.S. equity investment process............................................... 13
Tax aware investing at J.P. Morgan........................................... 13

14 | Investing in the J.P. Morgan Institutional U.S. Equity Funds

YOUR INVESTMENT
Investing through a financial professional................................... 14
Investing through an employer-sponsored retirement plan...................... 14
Investing through an IRA or rollover IRA..................................... 14
Investing directly........................................................... 14
Opening your account......................................................... 14
Adding to your account....................................................... 14
Selling shares............................................................... 15
Account and transaction policies............................................. 15
Dividends and distributions.................................................. 16
Tax considerations........................................................... 16

17 | More about risk and the funds' business operations

FUND DETAILS
Business structure........................................................... 17
Management and administration................................................ 17
Performance of private accounts.............................................. 18
Risk and reward elements..................................................... 20
Financial highlights......................................................... 22

FOR MORE INFORMATION................................................. back cover
<PAGE>

J.P. MORGAN INSTITUTIONAL
DISCIPLINED EQUITY FUND                                   | TICKER SYMBOL: JPIEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a consistently high total return from a broadly
diversified portfolio of equity securities with risk characteristics similar to
the Standard & Poor's 500 Stock Index (S&P 500). This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the S&P 500.
The fund does not look to overweight or underweight industries.

Within each industry, the fund modestly overweights stocks that are ranked as
undervalued or fairly valued while modestly underweighting or not holding stocks
that appear overvalued. (The process used to rank stocks according to their
relative valuations is described on page 13.) Therefore, the fund tends to own a
larger number of stocks within the S&P 500 than the U.S. Equity Fund.

Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings of that index, the fund seeks returns that modestly exceed those of
the S&P 500 over the long term with virtually the same level of volatility.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL DISCIPLINED EQUITY FUND)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $26 billion using similar
strategies as the fund.


The portfolio management team is led by James C. Wiess and Timothy J. Devlin,
both vice presidents, who have been on the team since the fund's inception. Mr.
Wiess has been at J.P. Morgan since 1992, and prior to managing this fund
managed other structured equity portfolios for J.P. Morgan. Mr. Devlin has been
at J.P. Morgan since July 1996, and prior to that time was an equity portfolio
manager at Mitchell Hutchins Asset Management Inc.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

2 | J.P. MORGAN INSTITUTIONAL DISCIPLINED EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Disciplined Equity Fund.

The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last two calendar years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
S&P500 Index. This is a widely recognized, unmanaged index of U.S. stocks used
as a measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Total return (%)      Shows changes in returns by calendar year(1,2)
- --------------------------------------------------------------------------------
                                                         1998              1999


40%
                                                         32.35
30%

20%
                                                                           18.32
10%

0%
- --------------------------------------------------------------------------------

[ ] J.P. Morgan Institutional Disciplined Equity Fund

For the period covered by this total return chart, the fund's highest quarterly
return was 22.85% (for the quarter ended 12/31/98); and the lowest quarterly
return was -9.91% (for the quarter ended 9/30/98).

<TABLE>
<CAPTION>

Average annual total return (%)        Shows performance over time, for periods ended December 31, 1999
- -------------------------------------------------------------------------------------------------------
                                                                          Past 1 yr.    Life of fund(1)
<S>                                                                         <C>              <C>
J.P. Morgan Institutional Disciplined Equity Fund (after expenses)          18.32            26.16
- -------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                 21.04            25.81
- -------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.35
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.25
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.60

Fee waiver and
expense reimbursement(4)                                                    0.15
- --------------------------------------------------------------------------------
Net expenses(4)                                                             0.45
- --------------------------------------------------------------------------------


Expense example(4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.


- --------------------------------------------------------------------------------
                             1 yr.      3 yrs.      5 yrs.      10 yrs.
Your cost($)                  46         177         320          736
- --------------------------------------------------------------------------------


(1) The fund commenced operations on 1/3/97 and performance is
    calculated as of 1/31/97.


(2) The fund's fiscal year end is 5/31.


(3) The fund has a master/feeder structure as described on page 17. This table
    shows the fund's expenses and its share of master portfolio expenses for the
    past fiscal year, expressed as a percentage of the fund's average net
    assets.

(4) Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
    York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
    expenses (excluding extraordinary expenses) exceed 0.45% of the fund's
    average daily net assets through 2/28/01.


                           J.P. MORGAN INSTITUTIONAL DISCIPLINED EQUITY FUND | 3
<PAGE>

J.P. MORGAN INSTITUTIONAL
U.S. EQUITY FUND                                          | TICKER SYMBOL: JMUEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of selected
equity securities. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund can moderately underweight or
overweight industries when it believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the investment process described on page 13. The fund
generally considers selling stocks that appear overvalued.

Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By emphasizing undervalued stocks, the fund seeks to produce returns that exceed
those of the S&P 500. At the same time, by controlling the industry weightings
of the fund so they can differ only moderately from the industry weightings of
the S&P 500, the fund seeks to limit its volatility to that of the overall
market, as represented by this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL U.S. EQUITY FUND)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $17 billion using similar
strategies as the fund.

The portfolio management team is led by Henry D. Cavanna, managing director, who
joined the team in February 1998, and has been at J.P. Morgan since 1971. He has
served as manager of U.S. equity portfolios prior to managing the fund.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

4 | J.P. MORGAN INSTITUTIONAL U.S. EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional U.S. Equity Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the S&P500
Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>
Year-by-year total return (%)      Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>         <C>         <C>         <C>         <C>         <C>          <C>         <C>         <C>         <C>

                  1990        1991        1992        1993        1994        1995         1996        1997        1998        1999

40%
                              34.12
                                                                              32.83
30%
                                                                                                       28.58
                                                                                                                   24.79
                                                                                           21.22
20%
                                                                                                                               14.88
                                                      11.06
10%
                                          8.73
                  1.38
0%
                                                                  (0.32)

(10%)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ] J.P. Morgan Institutional U.S. Equity Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 21.46% (for the quarter ended 12/31/98); and the
lowest quarterly return was -11.83% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%)      Shows performance over time, for periods ended December 31, 1999(1)
- -----------------------------------------------------------------------------------------------------------------
                                                                    Past 1 yr.      Past 5 yrs.      Past 10 yrs.
<S>                                                                   <C>              <C>              <C>
J.P. Morgan Institutional U.S. Equity Fund (after expenses)           14.88            24.31            17.12
- -----------------------------------------------------------------------------------------------------------------
S&P 500 Index  (no expenses)                                          21.04            28.55            18.21
- -----------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
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(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.40
Marketing (12b-1) fees                                                      none
Other expenses(4)                                                           0.23
- --------------------------------------------------------------------------------
Total annual fund
operating expenses(4)                                                       0.63
- --------------------------------------------------------------------------------

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                            1 yr.      3 yrs.      5 yrs.      10 yrs.
Your cost($)                 64         202         351          786
- --------------------------------------------------------------------------------


(1) The fund commenced operations on 9/17/93. For the period 1/1/90 through
    9/30/93, returns reflect performance of The Pierpont Equity Fund, the
    predecessor of the fund.


(2) The fund's fiscal year end is 5/31.

(3) The fund has a master/feeder structure as described on page 17. This table
    shows the fund's expenses and its share of master portfolio expenses for the
    past fiscal year, before reimbursement, expressed as a percentage of the
    fund's average net assets.

(4) After reimbursement, other expenses and total operating expenses are 0.20%
    and 0.60%, respectively. This reimbursement arrangement can be changed or
    terminated at any time at the option of J.P. Morgan.

                                  J.P. MORGAN INSTITUTIONAL U.S. EQUITY FUND | 5
<PAGE>

J.P. MORGAN INSTITUTIONAL
U.S. SMALL COMPANY FUND                                   | TICKER SYMBOL: JUSSX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of small
company stocks. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests primarily in small and medium sized U.S. companies whose market
capitalizations are greater than $100 million and less than $2 billion. Industry
by industry, the fund's weightings are similar to those of the Russell 2000
Index. The fund can moderately underweight or overweight industries when it
believes it will benefit performance.

Within each industry, the fund focuses on those stocks that are ranked as most
undervalued according to the process described on page 13. The fund generally
considers selling stocks that appear overvalued or have grown into large-cap
stocks.

Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

Small-cap stocks have historically offered higher long-term growth than
large-cap stocks, and have also involved higher risks. The fund's small-cap
emphasis means it is likely to be more sensitive to economic news and is likely
to fall further in value during broad market downturns. The fund pursues returns
that exceed those of the Russell 2000 Index while seeking to limit its
volatility relative to this index.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL U.S. SMALL COMPANY FUND)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $4.5 billion using similar
strategies as the fund.

The portfolio management team is led by Marian U. Pardo, managing director, and
Alexandra F. Wells, vice president. Ms. Pardo has been at J.P. Morgan since
1968, except for five months in 1998 when she was president of a small
investment management firm. Prior to managing the fund, Ms. Pardo managed small
and large cap equity portfolios, equity and convertible funds, and several
institutional portfolios. Ms. Wells joined the team in March 1998 and has been
with J.P. Morgan since 1992. Prior to managing the fund, Ms. Wells managed large
cap equity portfolios, and prior to that served as an equity research analyst.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

6 | J.P. MORGAN INSTITUTIONAL U.S. SMALL COMPANY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional U.S. Small Company Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Russell
2000 Index. This is a widely recognized, unmanaged index of small cap U.S.
stocks used as a measure of overall U.S. small company stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>
Year-by-year total return (%)      Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>         <C>         <C>         <C>         <C>         <C>          <C>         <C>         <C>         <C>

                  1990        1991        1992        1993        1994        1995         1996        1997        1998        1999

60%
                              59.59
                                                                                                                               44.30
                                                                              31.88
30%
                                                                                                       22.70
                                                                                           20.84
                                          18.98
                                                      8.59
0%
                                                                                                                   (5.28)
                                                                  (5.81)
                  (24.34)
(30%)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ] J.P. Morgan Institutional U.S. Small Company Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 34.75% (for the quarter ended 12/31/99); and the
lowest quarterly return was -30.03% (for the quarter ended 9/30/90).


<TABLE>
<CAPTION>

Average annual total return (%)      Shows performance over time, for periods ended December 31, 1999(1)
- ----------------------------------------------------------------------------------------------------------------------
                                                                         Past 1 yr.      Past 5 yrs.      Past 10 yrs.
<S>                                                                        <C>              <C>              <C>
J.P. Morgan Institutional U.S. Small Company Fund (after expenses)         44.30            21.73            14.66
- ----------------------------------------------------------------------------------------------------------------------
Russell 2000 Index  (no expenses)                                          21.26            16.69            12.43
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
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(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.60
Marketing (12b-1) fees                                                      none
Other expenses(4)                                                           0.25
- --------------------------------------------------------------------------------
Total annual fund
operating expenses(4)                                                       0.85
- --------------------------------------------------------------------------------

Expense example
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                            1 yr.      3 yrs.      5 yrs.      10 yrs.
Your cost($)                 87          271        471         1,049
- --------------------------------------------------------------------------------


(1) The fund commenced operations on 11/4/93. For the period 1/1/90 through
    11/30/93 returns reflect performance of The Pierpont Capital Appreciation
    Fund, the predecessor of the fund.


(2) The fund's fiscal year end is 5/31.

(3) The fund has a master/feeder structure as described on page 17. This table
    shows the fund's expenses and its share of master portfolio expenses for the
    past fiscal year, before reimbursement, expressed as a percentage of the
    fund's average net assets.

(4) After reimbursement other expenses and total operating expenses are 0.20%
    and 0.80%, respectively. This reimbursement arrangement can be changed or
    terminated at any time at the option of J.P. Morgan.

                           J.P. MORGAN INSTITUTIONAL U.S. SMALL COMPANY FUND | 7
<PAGE>

J.P. MORGAN INSTITUTIONAL TAX AWARE
DISCIPLINED EQUITY FUND                                   | TICKER SYMBOL: JPDEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high after tax total return from a portfolio of
selected equity securities. This goal can be changed without shareholder
approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests primarily in large- and medium-capitalization U.S. companies.
Industry by industry, the fund's weightings are similar to those of the Standard
& Poor's 500 Stock Index (S&P 500). The fund does not look to underweight or
overweight industries.

Within each industry, the fund modestly overweights stocks that are ranked as
undervalued or fairly valued while modestly underweighting or not holding stocks
that appear overvalued. (The process used to rank stocks according to their
relative valuations is described on page 13.) Therefore, the fund tends to own a
larger number of stocks within the S&P 500 than the U.S. Equity Fund.

To this investment approach the fund adds the element of tax aware investing.
The fund's tax aware investment strategies are described on page 13.

Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance will also depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings of that index, the fund seeks returns that modestly exceed those of
the S&P 500 over the long term with virtually the same level of volatility. The
fund's tax aware strategies may reduce your capital gains but will not eliminate
them. Maximizing after-tax returns may require trade-offs that reduce pre-tax
returns.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN TAX AWARE DISCIPLINED EQUITY FUND:
INSTITUTIONAL SHARES)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $2.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robin B. Chance, vice president, and
Frederic A. Nelson, managing director, who have been on the team since the
fund's inception in January of 1997. Ms. Chance has been at J.P. Morgan since
1987, Mr. Nelson since May 1994. Prior to managing this fund, both were respon
sible for structured equity strategies. Prior to joining Morgan, Mr. Nelson was
a portfolio manager at Bankers Trust.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

8 | J.P. MORGAN INSTITUTIONAL TAX AWARE DISCIPLINED EQUITY FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Tax Aware Disciplined Equity Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the past 2 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and the life of the fund compare to those of the S&P
500 Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Total return (%)      Shows changes in returns by calendar year(1,2)
- --------------------------------------------------------------------------------
                                                         1998              1999


40%
                                                         31.82
                                                                           17.39
20%


0%
- --------------------------------------------------------------------------------

[ ] J.P. Morgan Institutional Tax Aware Disciplined Equity Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 22.98% (for the quarter ended 12/31/98) and the lowest quarterly
return was -10.05%(for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%)      Shows performance over time, for periods ended December 31, 1999
- ---------------------------------------------------------------------------------------------------------------


                                                                                Past 1 yr.      Life of fund(1)
<S>                                                                               <C>                <C>

J.P. Morgan Institutional Tax Aware Disciplined Equity Fund (after expenses)      17.39              26.33
- ---------------------------------------------------------------------------------------------------------------
S&P 500 Index (no expenses)                                                       21.04              25.81
- ---------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, 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.

Shareholder transaction expenses(3)
- --------------------------------------------------------------------------------
Redemption fees (% of your cash proceeds)
- --------------------------------------------------------------------------------
Shares held for less than one year                                          1.00
Shares held one year or longer                                              none

Annual expenses (% of fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.35
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.30
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.65
Fee waiver and
expense reimbursement(3)                                                    0.10
- --------------------------------------------------------------------------------
Net expenses(3)                                                             0.55
- --------------------------------------------------------------------------------


Expense example(3)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. In the one year example, the first number
assumes that you continued to hold your shares, the second that you sold all
shares for cash at the end of the 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($)                60/160       202         356          805
- --------------------------------------------------------------------------------

(1) The fund commenced operations on 1/30/97, and returns reflect performance of
    the fund from 1/31/97.

(2) The fund's fiscal year end is 10/31.


(3) Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
    York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
    expenses (excluding extraordinary expenses) exceed 0.55% of the fund's
    average daily net assets through 2/28/01.


                 J.P. MORGAN INSTITUTIONAL TAX AWARE DISCIPLINED EQUITY FUND | 9
<PAGE>


J.P. MORGAN INSTITUTIONAL
SMARTINDEX(TM) FUND                                       | TICKER SYMBOL: JPISX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY


For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-21.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a consistently high total return from a broadly
diversified portfolio of approximately 350 equity securities while maintaining
risk characteristics similar to the S&P 500. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests primarily in large and medium capitalization U.S. and foreign
companies included in the S&P 500. While the fund seeks to invest in a portfolio
of stocks with risk characteristics similar to the S&P 500, the fund may invest
a portion of its assets in stocks which are not part of the index. The fund's
sector weightings are expected to be similar to those of the S&P 500. Within
each industry, the fund may moderately overweight stocks that appear undervalued
or fairly valued and underweight or not hold stocks that appear overvalued,
according to the investment process described on page 13. Accordingly, the
fund's performance is expected to differ from that of the S&P 500. The fund
expects to ordinarily hold a portfolio of approximately 350 stocks. The fund
generally considers selling stocks that appear significantly overvalued.

By controlling the sector weightings of the fund so they can differ only
moderately from the sector weightings of the S&P 500, the fund seeks to limit
its volatility to that of the overall market, as represented by this index.

Principal Risks
The value of your investment in the fund will fluctuate in response to movements
in the stock market. Fund performance also will depend on the effectiveness of
J.P. Morgan's research and the management team's stock picking decisions.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN SMARTINDEX FUND: INSTITUTIONAL
SHARES)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $2.7 billion using the same
strategy as the fund.


The portfolio management team is led by James C. Wiess and Timothy J. Devlin,
both vice presidents. Mr. Wiess has been at J.P. Morgan since 1992, and prior to
managing this fund managed other structured equity portfolios for J.P. Morgan.
Mr. Devlin has been at J.P. Morgan since July of 1996, and prior to that time
was an equity portfolio manager at Mitchell Hutchins Asset Management Inc.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

10 | J.P. MORGAN INSTITUTIONAL SMARTINDEX(TM)FUND
<PAGE>


- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional SmartIndex(TM) Fund.

The bar chart indicates some of the risks by showing the performance of the
fund's during its first complete calendar year of operations.

The table indicates some of the risks by showing how the fund's average annual
returns for the past year and life of fund compare to those of the S&P 500
Index. This is a widely recognized, unmanaged index of U.S. stocks used as a
measure of overall U.S. stock performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

Total return (%)      Shows changes in returns by calendar year(1,2)
- --------------------------------------------------------------------------------
                                                                           1999
20%
                                                                           19.61


10%


0%
- --------------------------------------------------------------------------------


[ ] J.P. Morgan Institutional SmartIndex(TM) Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 12.97% (for the quarter ended 12/31/99); and the lowest quarterly
return was -6.27% (for the quarter ended 9/30/99).

<TABLE>
<CAPTION>

Average annual total return (%)      Shows performance over time, for periods ended December 31, 1999
- -----------------------------------------------------------------------------------------------------
                                                                      Past 1 yr.      Life of fund(1)
<S>                                                                      <C>               <C>
J.P. Morgan Institutional SmartIndex(TM) Fund (after expenses)           19.61             19.61
- -----------------------------------------------------------------------------------------------------
S&P 500 Index  (no expenses)                                             21.04             21.04
- -----------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3)(%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.25
Marketing (12b-1) fees                                                      none
Other expenses                                                              5.19
- --------------------------------------------------------------------------------
Total operating expenses                                                    5.44

Fee waiver and
expense reimbursement(4)                                                    5.09
- --------------------------------------------------------------------------------
Net expenses(4)                                                             0.35
- --------------------------------------------------------------------------------


Expense example(4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period.The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.


- --------------------------------------------------------------------------------
                                  1 yr.      3 yrs.
Your cost($)                       36        1,169
- --------------------------------------------------------------------------------

(1) The fund commenced operations on 12/31/98.


(2) The fund's fiscal year end is 5/31.


(3) This table shows the fund's expenses expressed as a percentage of the fund's
    average net assets.


(4) Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
    York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
    expenses (excluding extraordinary expenses) exceed 0.35% of the fund's
    average daily net assets through 2/28/01.


                               J.P. MORGAN INSTITUTIONAL SMARTINDEX(TM)FUND | 11
<PAGE>

U.S. EQUITY MANAGEMENT APPROACH
- --------------------------------------------------------------------------------


J.P. MORGAN
Known for its commitment to proprietary research and its disciplined invest ment
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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN U.S. EQUITY FUNDS
These funds invest primarily in U.S. stocks either directly or through another
fund. As a shareholder, you should anticipate risks and rewards beyond those of
a typical bond fund or a typical balanced fund.

THE SPECTRUM OF U.S. EQUITY FUNDS
The funds described in this prospectus pursue a range of goals and offer varying
degrees of risk and potential reward. Differences between these funds include:

o how much emphasis they give to the most undervalued stocks

o how closely they follow the industry weightings of their benchmarks

o how many securities they typically maintain in their portfolios

o the size or market capitalization of the companies in which they invest

o whether they focus on before-tax or after-tax returns

The table below shows degrees of the relative risk and return that these funds
potentially offer. These and other distinguishing features of each U.S. equity
fund were described on the preceding pages.

- --------------------------------------------------------------------------------
Who May Want To Invest

The funds are designed for investors who:

o are pursuing a long-term goal such as retirement

o want to add an investment with growth potential to further diversify a
  portfolio

o want funds that seek to outperform the markets in which they each invest over
  the long term

o with regard to the Tax Aware Fund, are individuals that could benefit from a
  strategy that pursues returns from an after-tax perspective

The funds are not designed for investors who:

o want funds that pursue market trends or focus only on particular industries or
  sectors

o require regular income or stability of principal

o are pursuing a short-term goal or investing emergency reserves

o with regard to the Tax Aware Fund, are investing through a tax-deferred
  account such as an IRA.

Potential risk and return
- --------------------------------------------------------------------------------

The positions of the funds in this graph reflect long-term performance goals
only and are relative, not absolute.

[GRAPHIC OMITTED]

12 | U.S. EQUITY MANAGEMENT APPROACH
<PAGE>

- --------------------------------------------------------------------------------
U.S. EQUITY INVESTMENT PROCESS
The J.P. Morgan U.S. equity funds invest primarily in U.S. stocks. The Tax Aware
Fund does so while seeking to enhance after-tax returns.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor, focuses
on stock picking while largely avoiding sector or market-timing strategies.

In managing the funds, J.P. Morgan employs a three-step process:

[GRAPHIC OMITTED]
J.P. Morgan analysts develop proprietary
                    fundamental research

Research J.P. Morgan takes an in-depth look at company prospects over a
relatively long period -- often as much as five years -- rather than focusing on
near-term expectations. This approach is designed to provide insight into a
company's real growth potential. J.P. Morgan's in-house research is developed by
an extensive worldwide network of over 120 career analysts. The team of analysts
dedicated to U.S. equities includes more than 20 members, with an average of
over ten years of experience.

[GRAPHIC OMITTED]
Stocks in each industry are ranked
           with the help of models

Valuation The research findings allow J.P. Morgan to rank the companies in each
industry group according to their relative value. The greater a company's
estimated worth compared to the current market price of its stock, the more
undervalued the company. The valuation rankings are produced with the help of a
variety of models that quantify the research team's findings.

[GRAPHIC OMITTED]
Using research and valuations,
   each fund's management team
   chooses stocks for its fund

Stock selection Each fund buys and sells stocks according to its own policies,
using the research and valuation rankings as a basis. In general, each
management team buys stocks that are identified as undervalued and considers
selling them when they appear overvalued. Along with attractive valuation, the
funds' managers often consider a number of other criteria:

o catalysts that could trigger a rise in a stock's price

o high potential reward compared to potential risk

o temporary mispricings caused by market overreactions

- --------------------------------------------------------------------------------
TAX AWARE INVESTING AT J.P. MORGAN
The Tax Aware Disciplined Equity Fund is designed to reduce, but not eliminate,
capital gains distributions to shareholders. In doing so, the fund sells
securities when the anticipated performance benefit justifies the resulting tax
liability. This strategy often includes holding securities long enough to avoid
higher, short-term capital gains taxes, selling shares with a higher cost basis
first, and offsetting gains realized in one security by selling another security
at a capital loss. The fund is aided in this process by a tax-sensitive
optimization model developed by J.P. Morgan.

The Tax Aware Disciplined Equity Fund generally intends to pay redemption
proceeds in cash; however it reserves the right at its sole discretion to pay
redemptions over $250,000 in-kind as a portfolio of representative stocks rather
than cash. An in-kind redemption payment can shield the fund -- and other
shareholders -- from tax liabilities that might otherwise be incurred. It is not
subject to a redemption fee by the fund. However, the stocks received will
continue to fluctuate in value after redemption and will be subject to brokerage
or other transaction costs when liquidated.

                                            U.S. EQUITY MANAGEMENT APPROACH | 13
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN
Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA
Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Choose a fund (or funds) and determine the amount you are investing. The
  minimum amount for initial investments is $1,000,000 for the Disciplined
  Equity and U.S. Small Company funds and $3,000,000 for the U.S. Equity, Tax
  Aware Disciplined Equity and SmartIndex(TM) funds 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 on the
  right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-766-7722.

OPENING YOUR ACCOUNT

  By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place
  a purchase order. Funds that are wired without a purchase order will be
  returned uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
  your investment to:

  Morgan Guaranty Trust Company of New York-Delaware
  Routing number: 031-100-238
  Credit: J.P. Morgan Institutional Funds
  Account number: 001-57-689
  FFC: your account number, name of registered owner(s) and fund name.

  By check

o Make out a check for the investment amount payable to J.P. Morgan
  Institutional Funds

o Mail the check with your completed application to the Shareholder Services
  Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
  wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
  amount of your investment as described above.

  By check

o Make out a check for the investment amount payable to J.P. Morgan
  Institutional Funds.

o Mail the check with a completed investment slip to the Shareholder Services
  Agent. If you do not have an investment slip, attach a note indicating your
  account number and how much you wish to invest in which fund(s).

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

14 | 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 cash amount, payable to the
  registered owner(s), will be mailed to the address of record. For checks
  payable to any other party or mailed to any other address, please make your
  request in writing (see below).

  In writing

o Write a letter of instruction that includes the following information: The
  name of the registered owner(s) of the account; the account number; the fund
  name; the amount you want to sell; and the recipient's name and address or
  wire information, if different from those of the account registration.

o Indicate whether you want the proceeds sent by check or by wire.

o Make sure the letter is signed by an authorized party. The Shareholder
  Services Agent may require additional information, such as a signature
  guarantee.

o Mail the letter to the Shareholder Services Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

  Redemption in kind

o Each fund reserves the right to make redemptions of over $250,000 in
  securities rather than in cash.

ACCOUNT AND TRANSACTION POLICIES
Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan 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 minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business days and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE(normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using market quotes or pricing services. When
these methods are not available or do not represent a security's value at the
time of pricing, (e.g., when an event occurs after the close of trading that
would materially impact a security's value) the security is valued in accordance
with the fund's fair valuation procedures.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares, as
permitted by law, and to postpone payment of proceeds for up to seven days.

- --------------------------------------------------------------------------------
        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 | 15
<PAGE>

- --------------------------------------------------------------------------------
Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, cash proceeds are generally available the day following
execution and will be forwarded according to your instructions. In-kind
redemptions (described on page 15) will be available as promptly as is feasible.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), each fund reserves the right to request that you buy more shares
or close your account. If your account balance is still below the minimum 60
days after notification, each fund reserves the right to close out your account
and send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS
Income dividends are typically paid four times a year for the Disciplined
Equity, U.S. Equity, Tax Aware Disciplined Equity and SmartIndex(TM) funds; and
twice a year for the U.S. Small Company fund. Each fund typically makes capital
gains distributions, if any, once per year. However, a fund may make more or
fewer payments in a given year, depending on its investment results and its tax
compliance situation. Each fund's dividends and distributions consist of most or
all of its 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 for cash, exchanging shares, and receiving
distributions (whether reinvested or taken in cash) are all taxable events.
These transactions typically create the following tax liabilities for taxable
accounts:

- --------------------------------------------------------------------------------
Transaction                            | Tax status
- --------------------------------------------------------------------------------
Income dividends                         Ordinary income
- --------------------------------------------------------------------------------
Short-term capital gains                 Ordinary income
distributions
- --------------------------------------------------------------------------------
Long-term capital gains                  Capital gains
distributions
- --------------------------------------------------------------------------------
Sales or exchanges of shares             Capital gains or losses
owned for more than one year
- --------------------------------------------------------------------------------
Sales or exchanges of shares             Gains are treated as ordinary
owned for one year or less               income; losses are subject
                                         to special rules
- --------------------------------------------------------------------------------

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution.

Every January, each fund issues tax information on its distributions for the
previous year.

Any investor for whom a fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.

The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.

Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.

16 | YOUR INVESTMENT
<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
As noted earlier, each fund (except the Tax Aware Disciplined Equity and
SmartIndex(TM) funds) is a series of J.P Morgan Institutional Funds, a
Massachusetts business trust, and is a "feeder" fund that invests in a master
portfolio. (Except where indicated, this prospectus uses the term "the fund" to
mean the feeder fund and its master portfolio taken together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-766-7722. Generally, when a master
portfolio seeks a vote, its feeder fund will hold a shareholder meeting and cast
its vote proportionately, as instructed by its shareholders. Fund shareholders
are entitled to one full or fractional vote for each dollar or fraction of a
dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether a fund should hire its own investment adviser,
invest in a different master portfolio, or take other action.

The Tax Aware Disciplined Equity and SmartIndex(TM) funds are each 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.

MANAGEMENT AND ADMINISTRATION
The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers.

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:

- --------------------------------------------------------------------------------
Advisory services                       Percentage of the master
                                        portfolio's average net assets
Disciplined Equity                      0.35%
U.S. Equity                             0.40%
U.S. Small Company                      0.60%
- --------------------------------------------------------------------------------
Administrative services                 Master portfolio's and fund's pro-
(fee shared with Funds                  rata portions of 0.09% of the
Distributor, Inc.)                      first $7 billion in J.P. Morgan-
                                        advised portfolios, plus 0.04% of
                                        average net assets over
                                        $7 billion
- --------------------------------------------------------------------------------
Shareholder services                    0.10% of the fund's average
                                        net assets
- --------------------------------------------------------------------------------

The Tax Aware Disciplined Equity and SmartIndex(TM) funds, subject to the
expense reimbursements described earlier in this prospectus, pay J.P. Morgan the
following fees for investment advisory and other services:

- --------------------------------------------------------------------------------
Advisory services                       Percentage of the fund's
                                        average net assets
Tax Aware Disciplined                   0.35%
  Equity
SmartIndex(TM)                          0.25%
- --------------------------------------------------------------------------------
Administrative services                 Fund's pro-rata portion of 0.09%
(fee shared with Funds                  of the first $7 billion of
Distributor, Inc.)                      average net assets in
                                        J.P. Morgan-advised portfolios,
                                        plus 0.04% of average
                                        net assets over $7 billion
- --------------------------------------------------------------------------------
Shareholder services                    0.10% of the fund's average
                                        net assets
- --------------------------------------------------------------------------------

J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.


                                                               FUND DETAILS | 17
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE OF PRIVATE ACCOUNTS


     The  Disciplined  Equity  Fund's  investment  objective  and  policies  are
substantially  similar  to  those  used  by  J.P.  Morgan  in  managing  certain
discretionary   investment  management  accounts.  The  chart  below  shows  the
historical investment performance for a composite of these private accounts (the
"Disciplined Equity Composite").

The performance of the Disciplined Equity Composite does not represent the
fund's performance nor should it be interpreted as indicative of the fund's
future performance. The accounts in the Disciplined Equity Composite are not
subject to the same limitations imposed on mutual funds. If the accounts
included in the Disciplined Equity Composite had been subject to these
limitations, their performance might have been lower.


Additionally, although it is anticipated that the Disciplined Equity Fund and
the Disciplined Equity Composite will hold similar securities, their investment
results are expected to differ. In particular, difference in asset size and cash
flow resulting from purchases and redemptions of fund shares may result in
different securities selections, differences in the relative weightings of
securities or differences in the prices paid for particular fund holdings.


The performance of the Disciplined Equity Composite reflects the deductions of
the Disciplined Equity Fund's total operating expenses, after expense
reimbursement, and the reinvestment of dividends and other distributions. The
performance information is the average annual total return of the Disciplined
Equity Composite for the periods indicated.


<TABLE>
<CAPTION>
                                                 Annual Total Returns for the Year Ended December 31,


                       1990       1991       1992       1993       1994       1995       1996       1997       1998       1999
<S>                   <C>        <C>        <C>        <C>         <C>       <C>        <C>        <C>        <C>        <C>
Disciplined Equity
Composite             -2.94%     30.39%     11.75%     10.20%      2.21%     37.87%     23.26%     33.37%     31.91%     18.82%
- -------------------------------------------------------------------------------------------------------------------------------
S&P 500               -3.11%     30.47%      7.62%     10.08%      1.32%     37.58%     22.96%     33.36%     28.58%     21.04%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The  Disciplined  Equity  Composite  currently  includes all  discretionary
accounts managed by J.P. Morgan using substantially  similar investment strategy
as the Disciplined  Equity Fund. The inception date for the  Disciplined  Equity
Composite  was October 31, 1989.  Prior to January 1, 1993 the composite may not
have included all discretionary accounts.

The SmartIndex(TM) Fund's investment objective and policies are substantially
similar to those used by J.P. Morgan in managing certain discretionary
investment management accounts. The chart below shows the historical investment
performance for a composite of these private accounts (the "SmartIndex(TM)
Composite").


The performance of the SmartIndex(TM) Composite does not represent the fund's
performance nor should it be interpreted as indicative of the fund's future
performance. The accounts in the SmartIndex(TM) Composite are not subject to the
same limitations imposed on mutual funds. If the accounts included in the
SmartIndex(TM) Composite had been subject to these limitations, their
performance might have been lower.

Additionally, although it is anticipated that the SmartIndex(TM) Fund and the
SmartIndex(TM) Composite will hold similar securities, their investment results
are expected to differ. In particular, difference in asset size and cash flow
resulting from purchases and redemptions of fund shares may result in different
securities selections, differences in the relative weightings of securities or
differences in the prices paid for particular SmartIndex(TM) Fund holdings.


The performance of the SmartIndex(TM) Composite reflects the deductions of the
SmartIndex(TM) Fund's total operating expenses, after expense reimbursement, and
the reinvestment of dividends and other distributions. The performance
information is the average annual total return of the SmartIndex(TM) Composite
for the periods indicated.


<TABLE>
<CAPTION>
                                                  Annual Total Returns for the Year Ended December 31,
<S>                  <C>       <C>        <C>        <C>      <C>        <C>       <C>        <C>        <C>        <C>       <C>
SmartIndex(TM)Fund    1989      1990       1991      1992      1993      1994       1995       1996       1997       1998      1999
Composite            30.24%    -2.43%     29.76%     9.94%    10.44%     2.27%     38.38%     23.72%     33.98%     31.64%    19.21%
- ------------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index        31.69%    -3.11%     30.47%     7.62%    10.08%     1.32%     37.58%     22.96%     33.36%     28.58%    21.04%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


The SmartIndex(TM) Composite currently includes all discretionary accounts
managed by J.P. Morgan using the same investment strategy as the fund. The
inception date for the SmartIndex(TM) Composite was December 31, 1988. Prior to
January 1, 1993 the composite may not
have included all discretionary accounts.


18 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)

<PAGE>

- --------------------------------------------------------------------------------
RISK AND REWARD ELEMENTS
This table discusses the main elements that make up each fund's overall risk and
reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Potential risks                  |  Potential rewards                  |  Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                   <C>
Market conditions

o Each fund's share price and       o Stocks have generally               o Under normal circumstances the funds plan to remain
  performance will fluctuate          outperformed more stable              fully invested, with at least 65% in stocks; stock
  in response to stock market         investments (such as bonds            investments may include U.S. and foreign common stocks,
  movements                           and cash equivalents) over            convertible securities, preferred stocks, trust or
                                      the long term                         partnership interests, warrants, rights, and investment
o Adverse market conditions                                                 company securities
  may from time to time cause
  a fund to take temporary                                                o The funds seek to limit risk through diversification
  defensive positions that are
  inconsistent with its                                                   o During severe market downturns, the funds have the
  principal investment                                                      option of investing up to 100% of assets in
  strategies and may hinder a                                               investment-grade short-term securities
  fund from achieving its
  investment objective

Management choices

o A fund could underperform         o A fund could outperform its         o J.P. Morgan focuses its active management on securities
  its benchmark due to its            benchmark due to these same           selection, the area where it believes its commitment to
  securities and asset                choices                               research can most enhance returns
  allocation choices

Foreign investments

o Currency exchange rate            o Favorable exchange rate             o Each fund anticipates that its total foreign investments
  movements could reduce gains        movements could generate              will not exceed 20% of assets
  or create losses                    gains or reduce losses
                                                                          o Each fund actively manages the currency exposure of its
o A fund could lose money           o Foreign investments, which            foreign investments relative to its benchmark, and may
  because of foreign                  represent a major portion of          hedge back into the U.S. dollar from time to time (see
  government actions,                 the world's securities,               also "Derivatives")
  political instability, or           offer attractive potential
  lack of adequate and                performance and
  accurate information                opportunities for
                                      diversification

When-issued and delayed
  delivery securities

o When a fund buys securities       o A fund can take advantage of        o Each fund uses segregated accounts to offset leverage
  before issue or for delayed         attractive transaction                risk
  delivery, it could be               opportunities
  exposed to leverage risk if
  it does not use segregated
  accounts


Short-term trading


o Increased trading would           o A fund could realize gains          o The funds generally avoid short-term trading, except to
  raise a fund's brokerage and        in a short period of time             take advantage of attractive or unexpected opportunities
  related costs                                                             or to meet demands generated by shareholder activity.
                                    o A fund could protect against          The turnover rate for each fund for its most recent
o Increased short-term capital        losses if a stock is                  fiscal year end is as follows: Disciplined Equity (51%),
  gains distributions would           overvalued and its value              U.S. Equity (84%), U.S. Small Company (104%), Tax Aware
  raise shareholders' income          later falls                           Disciplined Equity (40%), and SmartIndex(TM) (19%)
  tax liability
</TABLE>


20 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Potential risks                  |  Potential rewards                  |  Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                   <C>
Derivatives

o Derivatives such as futures,      o Hedges that correlate well          o The funds use derivatives for hedging and for risk
  options, swaps, and forward         with underlying positions             management (i.e., to establish or adjust exposure to
  foreign currency contracts          can reduce or eliminate               particular securities, markets or currencies); risk
  that are used for hedging           losses at low cost                    management may include management of a fund's exposure
  the portfolio or specific                                                 relative to its benchmark
  securities may not fully          o A fund could make money and
  offset the underlying               protect against losses if           o The funds only establish hedges that they expect will be
  positions(1) and this could         management's analysis proves          highly correlated with underlying positions
  result in losses to the fund        correct
  that would not have                                                     o While the funds may use derivatives that incidentally
  otherwise occurred                o Derivatives that involve              involve leverage, they do not use them for the specific
                                      leverage could generate               purpose of leveraging their portfolios
o Derivatives used for risk           substantial gains at low
  management may not have the         cost
  intended effects and may
  result in losses or missed
  opportunities

o The counterparty to a
  derivatives contract could
  default

o Derivatives that involve
  leverage could magnify
  losses

o Certain types of derivatives
  involve costs to the funds
  which can reduce returns

Securities lending

o When a fund lends a               o A fund may enhance income           o J.P. Morgan maintains a list of approved borrowers
  security, there is a risk           through the investment of
  that the loaned securities          the collateral received from        o The fund receives collateral equal to at least 100% of
  may not be returned if the          the borrower                          the current value of securities loaned
  borrower defaults
                                                                          o The lending agents indemnify a fund against borrower
o The collateral will be                                                    default
  subject to the risks of the
  securities in which it is                                               o J.P. Morgan's collateral investment guidelines limit the
  invested                                                                  quality and duration of collateral investment to
                                                                            minimize losses

                                                                          o Upon recall, the borrower must return the securities
                                                                            loaned within the normal settlement period

Illiquid holdings

o A fund could have difficulty      o These holdings may offer            o No fund may invest more than 15% of net assets in
  valuing these holdings              more attractive yields or             illiquid holdings
  precisely                           potential growth than
                                      comparable widely traded            o To maintain adequate liquidity to meet redemptions, each
o A fund could be unable to           securities                            fund may hold investment-grade short-term securities
  sell these holdings at the                                                (including repurchase agreements and reverse repurchase
  time or price it desires                                                  agreements) and, for temporary or extraordinary
                                                                            purposes, may borrow from banks up to 331 1/43% of the
                                                                            value of its total assets
</TABLE>

(1) A futures contract is an agreement to buy or sell a set quantity of an
    underlying instrument at a future date, or to make or receive a cash payment
    based on changes in the value of a securities index. An option is the right
    to buy or sell a set quantity of an underlying instrument at a
    pre-determined price. A swap is a privately negotiated agreement to exchange
    one stream of payments for another. A forward foreign currency contract is
    an obligation to buy or sell a given currency on a future date and at a set
    price.

                                                               FUND DETAILS | 21
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The financial tables are intended to help you understand each fund's financial
performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions). Except where noted, this information has been
audited by PricewaterhouseCoopers LLP, whose reports, along with each fund's
financial statements, are included in the respective fund's annual report, which
are available upon request.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL DISCIPLINED EQUITY FUND


                                                                                                For the six
Per-share data                                   For fiscal periods ended                      months ended
- -------------------------------------------------------------------------------------------------------------
                                                 5/31/97(1)      5/31/98          5/31/99         11/30/99
                                                                                               (unaudited)
<S>                                               <C>            <C>            <C>              <C>
Net asset value, beginning of period ($)           10.00           11.47            14.96            17.57
- -------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                        0.04            0.12             0.17             0.15
   Net realized and unrealized gain
   on investment ($)                                1.43            3.62             3.18             0.74
- -------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                1.47            3.74             3.35             0.89
- -------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                          --           (0.12)           (0.15)           (0.08)
   Net realized gains ($)                             --           (0.13)           (0.59)              --
- -------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)               --           (0.25)           (0.74)           (0.08)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                 11.47           14.96            17.57            18.38
- -------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------
Total return (%)                                   14.70(2)        32.98            23.07             5.08(2)
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)           49,726         296,191        1,008,435        1,293,751
- -------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- -------------------------------------------------------------------------------------------------------------
   Net expenses (%)                                 0.45(3)         0.45             0.45             0.45(3)
- -------------------------------------------------------------------------------------------------------------
   Net investment income (%)                        1.58(3)         1.27             1.14             0.99(3)
- -------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)               1.34(3)         0.72             0.60             0.54(3)
- -------------------------------------------------------------------------------------------------------------
</TABLE>


(1) The fund commenced operations on 1/3/97.
(2) Not annualized.
(3) Annualized.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL U.S. EQUITY FUND


                                                                                                                 For the six
Per-share data                                For fiscal periods ended                                          months ended
- ------------------------------------------------------------------------------------------------------------------------------
                                              5/31/95       5/31/96       5/31/97       5/31/98       5/31/99      11/30/99
                                                                                                                (unaudited)
<S>                                           <C>           <C>           <C>           <C>           <C>           <C>
Net asset value, beginning of period ($)        10.92         12.10         14.00         15.66         16.73         15.08
- ------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                     0.18          0.27          0.17          0.15          0.16          0.07
   Net realized and unrealized gain
   on investment ($)                             1.42          2.66          3.02          3.81          2.39          0.18
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)             1.60          2.93          3.19          3.96          2.55          0.25
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                    (0.14)        (0.20)        (0.25)        (0.18)        (0.17)        (0.04)
   Net realized gains ($)                       (0.28)        (0.83)        (1.28)        (2.71)        (4.03)           --
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)         (0.42)        (1.03)        (1.53)        (2.89)        (4.20)        (0.04)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)              12.10         14.00         15.66         16.73         15.08         15.29
- ------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                15.40         25.43         25.21         28.53         18.66          1.66(1)
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)       172,497       221,368       329,776       378,988       278,253       276,962
- ------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- ------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                              0.60          0.60          0.60          0.60          0.60          0.60(2)
- ------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                     2.07          2.08          1.33          0.89          0.89          0.86(2)
- ------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)            0.71          0.62          0.65          0.63          0.63          0.62(2)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1) Not annualized.
(2) Annualized.

22 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL U.S. SMALL COMPANY FUND


                                                                                                                     For the six
Per-share data                                For fiscal periods ended                                              months ended
- -----------------------------------------------------------------------------------------------------------------------------------
                                              5/31/95        5/31/96        5/31/97        5/31/98        5/31/99      11/30/99
                                                                                                                     (unaudited)
<S>                                           <C>            <C>            <C>            <C>            <C>            <C>
Net asset value, beginning of period ($)        10.03          11.16          13.97          14.09          15.30          11.98
- -----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                     0.10           0.13           0.10           0.09           0.08           0.02
   Net realized and unrealized gain (loss)
   on investment ($)                             1.12           3.66           1.07           3.04          (1.83)          3.30
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)             1.22           3.79           1.17           3.13          (1.75)          3.32
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                    (0.09)         (0.12)         (0.13)         (0.08)         (0.08)         (0.01)
   Net realized gain ($)                           --          (0.86)         (0.92)         (1.84)         (1.49)            --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)         (0.09)         (0.98)         (1.05)         (1.92)         (1.57)         (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)              11.16          13.97          14.09          15.30          11.98          15.29
- -----------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                12.26          35.60           9.44          23.55         (10.79)        27.732
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)       149,279        291,931        401,797        420,413        344,776        390,985
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
- -----------------------------------------------------------------------------------------------------------------------------------
   Net expenses (%)                              0.80           0.80           0.80           0.80           0.80           0.80(3)
- -----------------------------------------------------------------------------------------------------------------------------------
   Net investment income (loss) (%)              1.14           1.20           0.81           0.55           0.55           0.42(3)
- -----------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement and
   including interest expense (%)                0.91           0.83           0.85           0.85           0.85           0.82(3)
- -----------------------------------------------------------------------------------------------------------------------------------
   Interest expense (%)                            --             --             --           0.00(1)          --             --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1) Less than 0.01%.
(2) Not annualized.
(3) Annualized.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
J.P. Morgan Institutional Tax Aware Disciplined Equity Fund


Per-share data                                 For fiscal periods ended October 31
- -----------------------------------------------------------------------------------
                                                 1997(1)         1998          1999
<S>                                            <C>             <C>          <C>
Net asset value, beginning of period ($)        10.00           12.08         14.71
- -----------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                     0.06            0.11          0.15
   Net realized and unrealized gain
   on investment ($)                             2.02            2.68          3.48
- -----------------------------------------------------------------------------------
Total from investment operations ($)             2.08            2.79          3.63
- -----------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income ($)                       --           (0.16)        (0.15)
- -----------------------------------------------------------------------------------
Net asset value, end of period ($)              12.08           14.71         18.19
- -----------------------------------------------------------------------------------

Ratios and supplemental data
- -----------------------------------------------------------------------------------
Total return (%)                                20.80(2)        23.26         24.72
- -----------------------------------------------------------------------------------
Net assets, end of period ($ thousands)        12,026          90,079       340,812
- -----------------------------------------------------------------------------------
Ratio to average net assets:
- -----------------------------------------------------------------------------------
   Net expenses (%)                              0.55(3)         0.55          0.55
- -----------------------------------------------------------------------------------
   Net investment income (%)                     1.19(3)         0.97          0.94
- -----------------------------------------------------------------------------------
   Expenses without reimbursement (%)            4.59(3)         1.02          0.65
- -----------------------------------------------------------------------------------
   Portfolio turnover rate (%)                     35              57            40
- -----------------------------------------------------------------------------------
</TABLE>


(1) The fund commenced operations on 1/30/97.
(2) Not annualized.
(3) Annualized.

                                                               FUND DETAILS | 23
<PAGE>

- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL SMARTINDEX(TM) FUND
                                                                 For the six
Per-share data                     For fiscal periods ended      months ended
- --------------------------------------------------------------------------------

                                                    5/31/99(1)      11/30/99
                                                                 (unaudited)
Net asset value, beginning of period ($)              15.00            16.06
- --------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                           0.07             0.05
   Net realized and unrealized gain
   on investment ($)                                   1.02             0.94
- --------------------------------------------------------------------------------
Total from investment operations ($)                  (1.09)            0.99
- --------------------------------------------------------------------------------
Less distributions to shareholders from:
   Net investment income                              (0.03)           (0.05)
- --------------------------------------------------------------------------------
Net asset value, end of period ($)                    16.06            17.00
- --------------------------------------------------------------------------------

Ratios and supplemental data
- --------------------------------------------------------------------------------
Total return (%)                                       7.27(2)          6.18(2)
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands)               5,363          126,956
- --------------------------------------------------------------------------------
Ratios to average net assets:
  Net expenses (%)                                     0.35(3)          0.35(3)
- --------------------------------------------------------------------------------
  Net investment income(%)                             1.13(3)          1.30(3)
- --------------------------------------------------------------------------------
  Expenses without reimbursement (%)                   5.44(3)          0.62(3)
- --------------------------------------------------------------------------------
  Portfolio turnover (%)                                 19               17
- --------------------------------------------------------------------------------


(1) The fund commenced operations on 12/31/98.
(2) Not annualized.
(3) Annualized.

24 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

                     (this page is intentionally left blank)
<PAGE>

- --------------------------------------------------------------------------------
FOR MORE INFORMATION
- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the funds, may be obtained by contacting:

J.P. Morgan Institutional Funds
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. Each
fund's investment company and 1933 Act registration numbers are:

J.P. Morgan Institutional Disciplined Equity Fund ...... 811-07342 and 033-54642
J.P. Morgan Institutional U.S. Equity Fund ............. 811-07342 and 033-54642
J.P. Morgan Institutional U.S. Small Company Fund ...... 811-07342 and 033-54642
J.P. Morgan Institutional Tax Aware Disciplined
  Equity Fund .......................................... 811-07795 and 333-11125
J.P. Morgan Institutional SmartIndex(TM)Fund ........... 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.

JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds

Advisor                                          Distributor
J.P. Morgan Investment Management Inc.           Funds Distributor, Inc.
522 Fifth Avenue                                 60 State Street
New York, NY 10036                               Boston, MA 02109
1-800-766-7722                                   1-800-221-7930

                                                                          IMPR09

<PAGE>



- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------


J.P. MORGAN FIXED INCOME FUNDS

Short Term Bond Fund
Bond Fund
Global Strategic Income Fund
Emerging Markets Debt Fund
Tax Exempt Bond Fund
New York Tax Exempt Bond Fund
California Bond Fund


                                            ------------------------------------
                                            Seeking high total return or current
                                            income by investing primarily in
                                            fixed income securities.


This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense to state or suggest otherwise.

Distributed by Funds Distributor, Inc.

                                                                        JPMorgan
<PAGE>
- --------------------------------------------------------------------------------

<PAGE>

CONTENTS
- --------------------------------------------------------------------------------


2 | Each fund's goal, principal strategies, principal risks, performance and
    expenses


J.P. MORGAN FIXED INCOME FUNDS
J.P. Morgan Short Term Bond Fund ..........................................    2
J.P. Morgan Bond Fund .....................................................    4
J.P. Morgan Global Strategic Income Fund ..................................    6
J.P. Morgan Emerging Markets Debt Fund ....................................    8
J.P. Morgan Tax Exempt Bond Fund ..........................................   10
J.P. Morgan New York Tax Exempt Bond Fund .................................   12
J.P. Morgan California Bond Fund ..........................................   14

16 | Principles and techniques common to the funds in this prospectus

FIXED INCOME MANAGEMENT APPROACH
J.P. Morgan ...............................................................   16
J.P. Morgan fixed income funds ............................................   16
The spectrum of fixed income funds ........................................   16
Who may want to invest ....................................................   16
Fixed income investment process ...........................................   17

18 | Investing in the J.P. Morgan Fixed Income funds

YOUR INVESTMENT
Investing through a financial professional ................................   18
Investing through an employer-sponsored retirement plan ...................   18
Investing through an IRA or rollover IRA ..................................   18
Investing directly ........................................................   18
Opening your account ......................................................   18
Adding to your account ....................................................   18
Selling shares ............................................................   19
Account and transaction policies ..........................................   19
Dividends and distributions ...............................................   20
Tax considerations ........................................................   20

21 | More about risk and the funds' business operations

FUND DETAILS
Business structure ........................................................   21
Management and administration .............................................   21
Risk and reward elements ..................................................   22
Investments ...............................................................   24
Financial highlights ......................................................   26

FOR MORE INFORMATION .................................................back cover
<PAGE>

J.P. MORGAN SHORT TERM BOND FUND            | TICKER SYMBOL: JPSBX
- --------------------------------------------------------------------------------
                                              REGISTRANT: J.P. MORGAN FUNDS
                                              (J.P. MORGAN SHORT TERM BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return, consistent with low volatility
of principal. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, domestic and foreign corporate bonds, private placements,
asset-backed and mortgage-related securities, and money market instruments, that
it believes have the potential to provide a high total return over time. These
securities may be of any maturity, but under normal market conditions the fund's
duration will range between one and three years, similar to that of the Merrill
Lynch 1-3 Year Treasury Index. For a description of duration, please see fixed
income investment process on page 17.

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. The fund
typically hedges its non-dollar investments back to the U.S. dollar. 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,
including at least 75% A or better. No more than 10% of assets may be invested
in securities rated B or BB.

Principal Risks

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
duration fixed income funds will depend on the success of the investment
process, which is described on page 17.

Although any rise in interest rates is likely to cause a fall in the price of
bonds, the fund's comparatively short duration is designed to help keep its
share price within a relatively narrow range. Because it seeks to minimize risk,
the fund will generally offer less income, and during periods of declining
interest rates, may offer lower total returns than bond funds with longer
durations. Because of the sensitivity of the fund's mortgage related securities
to changes in interest rates, the performance and duration of the fund may be
more volatile than if it did not hold these securities. The fund uses futures
contracts and other derivatives to help manage duration, yield curve exposure,
and credit and spread volatility. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, often called junk bonds, it
takes on additional risks, since these bonds are more sensitive to economic news
and their issuers have a less secure financial position. To the extent the fund
invests in foreign securities, it could lose money because of foreign government
actions, political instability, currency fluctuation or lack of adequate and
accurate information. The fund may engage in active and frequent trading,
leading to increased portfolio turnover and the possibility of increased capital
gains. See page 20 for further discussion on the tax treatment of capital gains.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $53 billion using similar
strategies as the fund.


The portfolio management team is led by Connie J. Plaehn, managing director, who
has been on the team since the fund's inception and has been at J.P. Morgan
since 1984, and William G. Tennille, vice president, who joined the team in
January of 1994 and has been at J.P. Morgan since 1992.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


2 | J.P. MORGAN SHORT TERM BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Short Term Bond Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 6 calendar years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one year, five years and life of the fund compare to those
of the Merrill Lynch 1-3 Year Treasury Index. This is a widely recognized,
unmanaged index of U.S. Treasury notes and bonds with maturities of 1-3 years
used as a measure of overall short-term bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Year-by-year total return (%)                                                         Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                1994             1995               1996           1997         1998          1999
<S>                                             <C>              <C>                <C>            <C>          <C>           <C>
20%




                                                                 10.58
10%
                                                                                                                6.84
                                                                                                   6.14
                                                                                    4.94
                                                                                                                              2.81

0%                                              0.11
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ]  J.P. Morgan Short Term Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 3.41% (for the quarter ended 6/30/95); and the
lowest quarterly return was -0.54% (for the quarter ended 3/31/94).


<TABLE>
<CAPTION>

Average annual total return            Shows performance over time, for periods ended December 31, 1999
- --------------------------------------------------------------------------------------------------------
                                                              Past 1 yr.   Past 5 yrs.   Life of fund(1)
<S>                                                             <C>           <C>            <C>
J.P. Morgan Short Term Bond Fund (after expenses)               2.81          6.23           5.06
- --------------------------------------------------------------------------------------------------------
Merrill Lynch 1-3 Year Treasury Index (no expenses)             3.06          6.51           5.42
- --------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                            0.25
Marketing (12b-1) fees                                                     none
Other expenses                                                             0.55
- --------------------------------------------------------------------------------
Total operating expenses                                                   0.80

Fee waiver and expense
reimbursement(4)                                                           0.20
- --------------------------------------------------------------------------------
Net expenses(4)                                                            0.60
- --------------------------------------------------------------------------------

Expense example(4)
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all
shares sold at
the end of each time period. The example is for comparison only; the fund's
actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                                1 yr.      3 yrs.      5 yrs.    10 yrs.
Your cost($)                     61         235         425        971
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 7/8/93 and returns reflect performance of
      the fund from 7/31/93.

(2)   The fund's fiscal year end is 10/31.


(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of the fund's average net
      assets.

(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.60% of the fund's
      average daily net assets through 2/28/01. Actual net expenses for the
      fiscal year ended 10/31/99 were 0.57% of the fund's average daily net
      assets.


                                            J.P. MORGAN SHORT TERM BOND FUND | 3
<PAGE>

J.P. MORGAN BOND FUND                            | TICKER SYMBOL: PPBDX
- --------------------------------------------------------------------------------
                                                   REGISTRANT: J.P. MORGAN FUNDS
                                                   (J.P. MORGAN BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return consistent with moderate risk of
capital and maintenance of liquidity. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, corporate bonds, private placements, asset-backed and
mortgage-backed securities, that it believes have the potential to provide a
high total return over time. These securities may be of any maturity, but under
normal market conditions the management team will keep the fund's duration
within one year of that of the Salomon Smith Barney Broad Investment Grade Bond
Index (currently about five years). For a description of duration, please see
fixed income investment process on page 17.

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. The fund
typically hedges its non-dollar investments back to the U.S. dollar. At least
75% 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,
including at least 65% A or better. No more than 25% of assets may be invested
in securities rated B or BB.

Principal Risks

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 17.


To the extent that the fund seeks higher returns by investing in
non-investment-grade bonds, often called junk bonds, it takes on additional
risks, since these bonds are more sensitive to economic news and their issuers
have a less secure financial position. The fund may use futures contracts and
other derivatives to help manage duration, yield curve exposure, and credit and
spread volatility. To the extent the fund invests in foreign securities, it
could lose money because of foreign government actions, political instability,
currency fluctuation or lack of adequate and accurate information. The fund's
mortgage-backed investments involve risk of losses due to default or to
prepayments that occur earlier or later than expected. The fund may engage in
active and frequent trading, leading to increased portfolio turnover and the
possibility of increased capital gains. See page 20 for further discussion on
the tax treatment of capital gains.


An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $29 billion using similar
strategies as the fund.


The portfolio management team is led by William G. Tennille, vice president, who
has been at J.P. Morgan since 1992, Connie J. Plaehn, managing director, who has
been at J.P. Morgan since 1984, and John Snyder, vice president, who has been at
J.P. Morgan since 1993. Mr. Tennille and Ms. Plaehn have been on the team since
January of 1994. Mr. Snyder has been a fixed income portfolio manager since
joining J.P. Morgan.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

4 | J.P. MORGAN BOND FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (UNAUDITED)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Bond Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 10 calendar years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years and compare to those of the Salomon
Smith Barney Broad Investment Grade Bond Index. This is a widely recognized,
unmanaged index of U.S. Treasury and agency securities and investment-grade
mortgage and corporate bonds used as a measure of overall bond market
performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Year-by-year total return (%)                                                         Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                 1990         1991        1992        1993         1994         1995         1996       1997        1998        1999
<S>              <C>          <C>         <C>         <C>          <C>          <C>          <C>        <C>         <C>         <C>
20%
                                                                                18.17


                              13.45

10%              10.09
                                                      9.87
                                                                                                        9.13
                                                                                                                    7.36
                                          6.53
                                                                                             3.13
0%----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              (0.73)
                                                                   (2.97)



(10%)
</TABLE>

[ ]  J.P. Morgan Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 6.25% (for the quarter ended 6/30/95); and the
lowest quarterly return was -2.39% (for the quarter ended 3/31/94).


<TABLE>
<CAPTION>

Average annual total return (%)                                     Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Past 1 yr.    Past 5 yrs.    Past 10 yrs.(1)
<S>                                                                                       <C>            <C>             <C>
J.P. Morgan Bond Fund (after expenses)                                                    (0.73)         7.23            7.23
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney Broad Investment Grade Bond Index (no expenses)                      (0.83)         7.74            7.65
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.


Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.30
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.39
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          0.69
- --------------------------------------------------------------------------------


Expense example
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                         1 yr.      3 yrs.    5 yrs.      10 yrs.


Your cost($)              70         221       384          859
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/12/93. Returns for the period 1/1/90
      through 7/31/93 reflect performance of The Pierpont Bond Fund, the fund's
      predecessor, which commenced operations on 3/11/88.


(2)   The fund's fiscal year end is 10/31.

(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of average net assets.


                                                       J.P. MORGAN BOND FUND | 5
<PAGE>


J.P. MORGAN GLOBAL STRATEGIC
INCOME FUND                         | TICKER SYMBOL: JPGSX
- --------------------------------------------------------------------------------
                                      REGISTRANT: J.P. MORGAN FUNDS
                                      (J.P. MORGAN GLOBAL STRATEGIC INCOME FUND)


[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of fixed income
securities of foreign and domestic issuers. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests in a wide range of debt securities from the U.S. and other
markets, both developed and emerging. Issuers may include governments,
corporations, financial institutions, and supranational organizations (such as
the World Bank) that the fund believes have the potential to provide a high
total return over time. The fund may invest directly in mortgages and in
mortgage-backed securities. The fund's securities may be of any maturity, but
under normal market conditions its duration will generally be similar to that of
the Lehman Brothers Aggregate Bond Index (currently about four and a half
years). For a description of duration, please see fixed income investment
process on page 17. At least 40% 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. The balance of assets must be invested in securities
rated B or higher at the time of purchase (or the unrated equivalent), except
that the fund's emerging market component has no minimum quality rating and may
invest without limit in securities that are in the lowest rating categories (or
are the unrated equivalent).

The management team uses the process described on page 17, and also makes
country allocations, based primarily on macro-economic factors. The team uses
the model allocation shown at right as a basis for its sector allocation,
although the actual allocations are adjusted periodically within the indicated
ranges. Within each sector, a dedicated team handles securities selection. The
fund typically hedges its non-dollar investments in developed countries back to
the U.S. dollar.

Principal Risks

The fund's share price and total return will vary in response to changes in
global bond markets, interest rates, and currency exchange rates. How well the
fund's performance compares to that of similar fixed income funds will depend on
the success of the investment process. Because of credit and foreign and
emerging markets investment risks, the fund's performance is likely to be more
volatile than that of most fixed income funds. Foreign and emerging market
investment risks include foreign government actions, political instability,
currency fluctuations and lack of adequate and accurate information. To the
extent that the fund seeks higher returns by investing in non-investment-grade
bonds, often called junk bonds, it takes on additional risks, since these bonds
are more sensitive to economic news and their issuers have a less secure
financial position. The fund's mortgage-backed investments involve the risk of
losses due to default or to prepayments that occur earlier or later than
expected. Some investments, including directly owned mortgages, may be illiquid.
The fund has the potential for long-term total returns that exceed those of more
traditional bond funds, but investors should also be prepared for risks that
exceed those of more traditional bond funds. The fund may engage in frequent
trading, leading to increased portfolio turnover and the possibility of
increased capital gains. See page 20 for further discussion on the tax treatment
of capital gains.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

MODEL SECTOR ALLOCATION

                            9% international
                            non-dollar
                            (range 0-25%)

35% public/private                                  13% public/private
         mortgages                                  corporates
    (range 20-45%)                                  (range 5-25%)
                            [PIE CHART]
                                                    16% emerging
27% high yield                                      markets
    corporates                                      (range 0-25%)
(range 17-37%)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $3 billion using similar
strategies as the fund.


The portfolio management team is led by Mark E. Smith, managing director, who
joined J.P. Morgan in 1994 from Allied Signal, Inc. where he managed fixed
income portfolios and oversaw asset allocation activities. He has been on the
team since the fund's inception.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


6 | J.P. MORGAN GLOBAL STRATEGIC INCOME FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Global Strategic Income Fund.


The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last 2 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past one year and life of the fund compare to those of the
Lehman Brothers Aggregate Bond Index. This is a widely recognized, unmanaged
index used as a measure of overall bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Total return (%)                                                                      Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                1998        1999
<S>                                                                                                             <C>         <C>
20%




10%


                                                                                                                2.31
                                                                                                                            2.08
0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


[ ]  J.P. Morgan Global Strategic Income Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 3.04% (for the quarter ended 3/31/98); and the lowest quarterly
return was -1.58% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return                                         Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Past 1 yr.       Life of fund(1)
<S>                                                                                           <C>                <C>
J.P. Morgan Global Strategic Income Fund (after expenses)                                     2.08               5.03
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index (no expenses)                                           (0.83)              6.49
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.45
Marketing (12b-1) fees                                                      none
Other expenses                                                              1.09
- --------------------------------------------------------------------------------
Total operating expenses                                                    1.54

Fee waiver and expense
reimbursement(4)                                                            0.54
- --------------------------------------------------------------------------------
Net expenses(4)                                                             1.00
- --------------------------------------------------------------------------------

Expense example(4)
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                               1 yr.    3 yrs.    5 yrs.    10 yrs.
Your cost($)                    102      433       788       1,789
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 11/5/97. For the period 3/31/97 through
      11/30/97, returns reflect performance of the J.P. Morgan Institutional
      Global Strategic Income Fund (a separate feeder fund investing in the same
      master portfolio). These returns reflect lower operating expenses than
      those of the fund. Therefore these returns may be higher than the fund's
      would have been had it existed during the same period.

(2)   The fund's fiscal year end is 10/31.


(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of average net assets.


(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 1.00% of the fund's
      average daily net assets through 2/28/01.


                                    J.P. MORGAN GLOBAL STRATEGIC INCOME FUND | 7
<PAGE>


J.P. MORGAN EMERGING
MARKETS DEBT FUND                     | TICKER SYMBOL: JEMDX
- --------------------------------------------------------------------------------
                                        REGISTRANT: J.P. MORGAN FUNDS
                                        (J.P. MORGAN EMERGING MARKETS DEBT FUND)


[GRAPHIC OMITTED]
RISKS/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of fixed income
securities of emerging markets issuers. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APROACH

Principal Strategies

The fund invests primarily in debt securities that it believes have the
potential to provide a high total return from countries whose economies or bond
markets are less developed. This designation currently includes most countries
in the world except Australia, Canada, Hong Kong, Japan, New Zealand, the U.S.,
the United Kingdom, and most Western European countries. Issuers of portfolio
securities may include foreign governments, corporations, and financial
institutions. These securities may be of any maturity and quality, but under
normal market conditions the fund's duration will generally range between three
and five years, similar to that of the Emerging Markets Bond Index Plus. For a
description of duration, please see fixed income investment process on page 17.
The fund does not have any minimum quality rating and may invest without limit
in securities that are rated in the lowest rating categories (or are the unrated
equivalent).

In addition to the investment process described on page 17, the management team
makes country allocation decisions, based primarily on financial and economic
forecasts and other macro-economic factors.

Principal Risks

The fund's share price and total return will vary in response to changes in
emerging bond markets, interest rates, and currency exchange rates. How well the
fund's performance compares to that of similar fixed income funds will depend on
the success of the investment process.

Because the fund is non-diversified and may invest more than 5% of its assets in
a single issuer and its primary securities combine the risks of emerging markets
and low credit quality, its performance is likely to be more volatile than that
of other fixed income investments. These risks and fund volatility are likely to
be compounded when the fund concentrates its investments in a small number of
countries. Emerging market investment risks include foreign government actions,
political instability, currency fluctuations and lack of adequate and accurate
information. The fund may engage in active and frequent trading, leading to
increased portfolio turnover and the possibility of increased capital gains. See
page 20 for further discussion on the tax treatment of capital gains. Since the
fund seeks higher returns by investing in non-investment-grade bonds, often
called junk bonds, it takes on additional risks, since these bonds are more
sensitive to economic news and their issuers have a less secure financial
position. Investors should be prepared to ride out periods of negative return.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $2.7 million using similar
strategies as the fund.

The portfolio management team is led by Michael Cembalest, managing director,
who has been at J.P. Morgan from 1988 to January 1998 and since June 1998, and
Paul Dickson, vice president, who has been at J.P. Morgan since November 1999.
Prior to joining the portfolio management team, Mr. Cembalest was responsible
for sovereign debt analysis in the emerging markets group. From January 1998 to
June 1998, Mr. Cembalest was a portfolio manager at Morgan Stanley. Previously,
Mr. Dickson was the senior emerging markets debt strategist at Lehman Brothers.
From 1993 to 1997, Mr. Dickson served as a strategist with Chase Manhattan Bank.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


8 | J.P. MORGAN EMERGING MARKETS DEBT FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Emerging Markets Debt Fund.

The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last 2 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and life of fund compare to those of the Emerging
Markets Bond Index Global. This is a broad-based unmanaged index which tracks
total return for U.S. dollar denominated emerging markets debt, including Brady
bonds, Eurobonds and loans. Previously, the fund's benchmark was the Emerging
Markets Bond Index Plus.


The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Total return (%)                                                                      Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          1998        1999
<S>                                                                                                       <C>         <C>
40%


                                                                                                                      25.97

20%




0%
- ------------------------------------------------------------------------------------------------------------------------------------


                                                                                                          (15.93)

(20%)
</TABLE>


[ ] J.P. Morgan Emerging Market Debt Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 14.16% (for the quarter ended 12/31/99) and the lowest quarterly
return was -21.73% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return (%)                                      Shows performance over time, for period ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Past 1 yr.     Life of fund(1)
<S>                                                                                                  <C>              <C>
J.P. Morgan Emerging Market Debt Fund (after expenses)                                               25.97            3.46
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Bond Index Global (no expenses)                                                     24.19            6.41
- ------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets Bond Index Plus (no expenses)                                                       25.98            6.24
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------

INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.70
Marketing (12b-1) fees                                                      none
Other expenses                                                              1.81
- --------------------------------------------------------------------------------
Total operating expenses                                                    2.51

Fee waiver and expense
reimbursement(4)                                                            1.26
- --------------------------------------------------------------------------------
Net expenses(4)                                                             1.25
- --------------------------------------------------------------------------------


Expense example(4)
- --------------------------------------------------------------------------------


The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
8/1/99 through 11/28/00 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                              1 yr.     3 yrs.     5 yrs.     10 yrs.
Your cost($)                   127       661       1,222       2,751
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 4/17/97 and returns reflect performance
      of the fund from 4/30/97.

(2)   The fund's fiscal year end is 7/31. Prior to 1999, the fund's fiscal year
      end was 12/31.

(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of average net assets.

(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 1.25% of the fund's
      average daily net assets through 11/28/00.


                                      J.P. MORGAN EMERGING MARKETS DEBT FUND | 9
<PAGE>

J.P. MORGAN TAX EXEMPT
BOND FUND                                   | TICKER SYMBOL: PPTBX
- --------------------------------------------------------------------------------
                                              REGISTRANT: J.P. MORGAN FUNDS
                                              (J.P. MORGAN TAX EXEMPT BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a high level of current income that is exempt from
federal income tax consistent with moderate risk of capital. This goal can be
changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in high quality municipal securities that it believes
have the potential to provide high current income that is free from federal
personal income tax. While the fund's goal is high tax-exempt income, the fund
may invest to a limited extent in taxable securities, including U.S. government,
government agency, corporate, or taxable municipal securities. The fund's
securities may be of any maturity, but under normal market conditions the fund's
duration will generally range between four and seven years, similar to that of
the Lehman Brothers 1-16 Year Municipal Bond Index (currently 5.4 years). For a
description of duration, please see fixed income investment process on page 17.
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 rated B or
BB.

Principal Risks

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
tax-exempt funds will depend on the success of the investment process, which is
described on page 17.

Investors should be prepared for higher share price volatility than from a tax
exempt fund of shorter duration. The fund's performance could also be affected
by market reaction to proposed tax legislation. To the extent that the fund
seeks higher returns by investing in non-investment-grade bonds, often called
junk bonds, it takes on additional risks, since these bonds are more sensitive
to economic news and their issuers have a less secure financial position.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in June of 1997 and has been at J.P. Morgan since 1987, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


10 | J.P. MORGAN TAX EXEMPT BOND FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Tax Exempt Bond Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Lehman
Brothers 1-16 Year Municipal Bond Index, the fund's current benchmark. Since
this index has not been in existence during all of the past ten years, the table
also shows the performance of the Lehman Quality Intermediate Municipal Bond
Index, the fund's previous benchmark. Both are unmanaged indices that measure
municipal bond market performance.


The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Year-by-year total return (%)                                                         Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                    1990        1991        1992       1993        1994        1995         1996       1997        1998        1999
<S>                 <C>         <C>         <C>        <C>         <C>         <C>          <C>        <C>         <C>         <C>
20%




                                                                               13.40


                                10.92
10%
                                                       9.58
                                            7.47                                                       7.42
                    6.87
                                                                                                                   5.47

                                                                                            3.54


0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              (0.88)

                                                                   (2.70)





(10%)
</TABLE>


[ ]  J.P. Morgan Tax Exempt Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 5.09% (for the quarter ended 3/31/95); and the
lowest quarterly return was -3.08% (for the quarter ended 3/31/94).


<TABLE>
<CAPTION>

Average annual total return (%)                                     Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Past 1 yr.   Past 5 yrs.   Past 10 yrs.(1)
<S>                                                                                       <C>           <C>            <C>
J.P. Morgan Tax Exempt Bond Fund (after expenses)                                         (0.88)        5.69           6.00
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index  (no expenses)                             (0.06)        6.32            N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Quality Intermediate Municipal Bond Index (no expenses)                             0.30         6.25           6.60
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------

INVESTOR EXPENSES

The expenses of the fund are shown at right. The fund has no sales, redemption,
exchange, or account fees, although some institutions may charge you a fee for
shares you buy through them. The annual fund expenses are deducted from fund
assets prior to performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.30
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.38
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                          0.68
- --------------------------------------------------------------------------------

Expense example
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
unchanged, and all shares sold at the end of each time period. The example is
for comparison only; the fund's actual return and your actual costs may be
higher or lower.

- --------------------------------------------------------------------------------
                                       1 yr.    3 yrs.    5 yrs.    10 yrs.
Your cost($)                            69       218       379        847
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 7/12/93. For the period 1/1/90 through
      7/31/93 returns reflect performance of The Pierpont Tax Exempt Bond Fund,
      the predecessor of the fund.

(2)   The fund's fiscal year end is 7/31. Prior to 1999, the fund's fiscal year
      end was 8/31.


(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of average net assets.


                                           J.P. MORGAN TAX EXEMPT BOND FUND | 11
<PAGE>

J.P. MORGAN NEW YORK
TAX EXEMPT BOND FUND               | TICKER SYMBOL: PPNYX
- --------------------------------------------------------------------------------
                                     REGISTRANT: J.P. MORGAN FUNDS
                                     (J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a high level of tax exempt income for New York
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in New York municipal securities that it believes
have the potential to provide high current income which is free from federal,
state, and New York City personal income taxes for New York residents. The fund
may also 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 New York residents but would be subject to New York
state and New York City personal income taxes. For non-New York residents, the
income from New York 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 seven years, similar to that of
the Lehman Brothers 1-16 Year Municipal Bond Index (currently 5.4 years). For a
description of duration, please see fixed income investment process on page 17.
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 rated B or
BB.

Principal Risks

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 17. Because most of the fund's investments will typically
be from issuers in the State of New York, 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, often called junk bonds, it
takes on additional risks, since these bonds are more sensitive to economic news
and their issuers have a less secure financial condition.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in June of 1997 and has been at J.P. Morgan since 1987, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


12 | J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan New York Tax Exempt Bond Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 5 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and the life of the fund 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 used as a measure of overall tax-exempt bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Year-by-year total return (%)                                                         Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                            1995         1996       1997        1998        1999
<S>                                                                        <C>           <C>        <C>         <C>         <C>
20%


                                                                           13.03

10%
                                                                                                    7.41
                                                                                                                5.39
                                                                                         3.96

0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            (0.84)



(10%)
</TABLE>


[ ] J.P. Morgan New York Tax Exempt Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 4.80% (for the quarter ended 3/31/95) and the
lowest quarterly return was -1.83% (for the quarter ended 6/30/99).


<TABLE>
<CAPTION>

Average annual total return (%)                                     Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Past 1 yr.       Life of fund(1)
<S>                                                                                                 <C>                <C>
J.P. Morgan New York Tax Exempt Bond Fund (after expenses)                                          (0.84)             5.06
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses)                                        (0.06)             5.95
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------

INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.30
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.48
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.78

Fee waiver and expense
reimbursement(4)                                                            0.08
- --------------------------------------------------------------------------------
Net expenses(4)                                                             0.70
- --------------------------------------------------------------------------------


Expense example(4)
- --------------------------------------------------------------------------------


The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
8/1/99 through 11/28/00 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                              1 yr.       3 yrs.       5 yrs.       10 yrs.
Your cost($)                   72          241          425           959
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 4/11/94 and returns reflect performance
      of the fund from 4/30/94.


(2)   The fund's fiscal year end is 7/31. Prior to 1999, the fund's fiscal year
      end was 3/31.

(3)   The fund has a master/feeder structure as described on page 21. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.


(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.70% of the fund's
      average daily net assets through 11/28/00.


                                  J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND | 13
<PAGE>


J.P. MORGAN CALIFORNIA
BOND FUND                    | TICKER SYMBOL: JPCBX
- --------------------------------------------------------------------------------
                               REGISTRANT: J.P. MORGAN SERIES TRUST
                               (J.P. MORGAN CALIFORNIA BOND FUND: SELECT SHARES)


[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 22-25.

[GRAPHIC OMITTED]
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 OMITTED]
INVESTMENT APPROACH

Principal Strategies

The fund invests primarily in California municipal securities that it believes
have the potential to provide high current income which 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 (currently 5.4 years). For a description of duration, please see
fixed income investment process on page 17. 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 rated B or BB.

Principal Risks

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 17. 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, often called junk bonds, it
takes on additional risks, because these bonds are more sensitive to economic
news and their issuers have a less secure financial condition.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in June of 1997 and has been at J.P. Morgan since 1987, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


14 | J.P. MORGAN CALIFORNIA BOND FUND
<PAGE>

- --------------------------------------------------------------------------------

PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan California Bond Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 3 calendar years.


The table indicates some of the risks by showing how the fund's average annual
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 used as a measure of
overall tax-exempt bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

<TABLE>
<CAPTION>

Total return (%)                                                                      Shows changes in returns by calendar year(1,2)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              1997        1998        1999
<S>                                                                                           <C>         <C>         <C>
10%

                                                                                              7.61

                                                                                                          5.48
5%




0%
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      (0.78)



(10%)
</TABLE>


[ ] J.P. Morgan California Bond Fund: Select Shares(1) (a separate class of
    shares)


For the period covered by this total return chart, the fund's highest quarterly
return was 3.46% (for the quarter ended 9/30/98) and the lowest quarterly return
was -2.02% (for the quarter ended 6/30/99).


<TABLE>
<CAPTION>

Average annual total return (%)                                      Shows performance over time, for period ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Past 1 yr.    Life of fund(1)
<S>                                                                                                    <C>              <C>
J.P. Morgan California Bond Fund: Select Shares (a separate class of shares) (after expenses)          (0.78)           4.04
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses)                                           (0.06)           4.66
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------

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(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.30
Marketing (12b-1) fees                                                      none
Other expenses(4)                                                           0.57
- --------------------------------------------------------------------------------
Total annual fund
operating expenses(4)                                                       0.87
- --------------------------------------------------------------------------------

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($)                   89         278        482          1,073
- --------------------------------------------------------------------------------


     (1) The fund  commenced  operations  on 4/21/97  and  returns  reflect  the
performance  of the fund from  5/1/97  forward.  For the period  1/1/97  through
4/30/97,  returns reflect the  performance of J.P. Morgan  California Bond Fund:
Institutional  Shares (a  separate  class of  shares).  Performance  during this
period  reflects  operating  expenses  which are 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.

(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 are 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 | 15
<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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN FIXED INCOME FUNDS

These funds invest primarily in bonds and other fixed income securities, either
directly or through a master portfolio (another fund with the same goal). The
funds seek high total return or high current income.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor,
emphasizes the potential for consistently enhancing performance while managing
risk.

THE SPECTRUM OF FIXED INCOME FUNDS

The funds described in this prospectus pursue different goals and offer varying
degrees of risk and potential reward. The table below shows degrees of the
relative risk and return that these funds potentially offer. These and other
distinguishing features of each fixed income fund were described on the
preceding pages. Differences among these funds include:

o the types of securities they hold

o the tax status of the income they offer

o the relative emphasis on current income versus total return

Who May Want to Invest
- --------------------------------------------------------------------------------

The funds are 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     with regard to the Tax Exempt Bond Fund, are seeking income that is exempt
      from federal personal income tax

o     with regard to the state-specific funds, are seeking income that is exempt
      from federal, state, and local (if applicable) personal income taxes in
      New York or California

The funds are not designed for investors who:

o     are investing for aggressive long-term growth

o     require stability of principal

o     with regard to the Global Strategic Income or Emerging Markets Debt funds,
      are not prepared to accept a higher degree of risk than most traditional
      bond funds

o     with regard to the federal or state tax-exempt funds, are investing
      through a tax-deferred account such as an IRA

Potential risk and return

[The following table was represented as an x-y chart in the printed material.]

Lower Risk, Lower Return (after taxes)
               |
               |                                Short Term Bond Fund
               |
               |                                Bond Fund
               |
               |                                Tax Exempt Bond Fund*
               |
               |                                New York Tax Exempt Bond Fund*
               |                                California Bond Fund*
               |
               |                                Global Strategic Income Fund
               |
               |                                Emerging Markets Debt Fund
               V
Higher Risk, Higher Return (after taxes)

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*     Based on tax-equivalent returns for an investor in the highest income tax
      bracket.


16 | 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 when consistent with a fund's investment approach,
takes positions in many different areas, helping the funds to limit exposure to
concentrated sources of risk.

In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process that combines sector allocation, fundamental research for
identifying portfolio securities, and duration management.

[GRAPHIC OMITTED]
The funds invest 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 a fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.

[GRAPHIC OMITTED]
Each 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 each fund's goal
and strategy.

 [GRAPHIC OMITTED]
 J.P. Morgan uses a disciplined process
     to control each 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 each fund's target duration, a common
measurement of a security's sensitivity to interest rate movements. For
securities owned by a fund, duration measures the average time needed to receive
the present value of all principal and interest payments by analyzing cash flows
and interest rate movements. A fund's duration is generally shorter than a
fund's average maturity because the maturity of a security only measures the
time until final payment is due. Each fund's target duration typically remains
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the funds and make tactical
adjustments as necessary.


                                           FIXED INCOME MANAGEMENT APPROACH | 17
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Choose a fund (or funds) and determine the amount you are investing. The
  minimum amount for initial investments in a fund is $2,500 and for additional
  investments $500, although these minimums may be less for some investors. For
  more information on minimum investments, call 1-800-521-5411.

o Complete the application, indicating how much of your investment you want to
  allocate to which fund(s). Please apply now for any account privileges you may
  want to use in the future, in order to avoid the delays associated with adding
  them later on.

o Mail in your application, making your initial investment as shown at right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

OPENING YOUR ACCOUNT

  By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place a
  purchase order. Funds that are wired without a purchase order will be returned
  uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
  your investment to:

  State Street Bank & Trust Company
  Routing number: 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

o Make out a check for the investment amount payable to J.P. Morgan Funds.

o Mail the check with your completed application to the Transfer Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
  wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
  amount of your investment as described above.

  By check

o Make out a check for the investment amount payable to J.P. Morgan Funds.

o Mail the check with a completed investment slip to the Transfer Agent. If you
  do not have an investment slip, attach a note indicating your account number
  and how much you wish to invest in which fund(s).

  By exchange

o Call the Shareholder Services Agent to effect an exchange.


18 | 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.

  Redemption In Kind

o Each fund reserves the right to make redemptions of over $250,000 in
  securities rather than in cash.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business hours and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE (normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using pricing services or market quotes. When
these methods are not available or do not represent a security's value at the
time of pricing (e.g., when an event occurs after the close of trading that
would materially impact a security's value), the security is valued in
accordance with the fund's fair valuation procedures.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares as
permitted by law and to postpone payment of proceeds for up to seven days.

- --------------------------------------------------------------------------------
Transfer Agent                                  Shareholder Services Agent
State Street Bank and Trust Company             J.P. Morgan Funds Services
P.O. Box 8411                                   522 Fifth Avenue
Boston, MA 02266-8411                           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 | 19
<PAGE>

- --------------------------------------------------------------------------------

Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), each fund reserves the right to request that you buy more shares
or close your account. If your account balance is still below the minimum 60
days after notification, each fund reserves the right to close out your account
and send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS

Income dividends are typically declared daily and paid monthly. If an investor's
shares are redeemed during the month, accrued but unpaid dividends are paid with
the redemption proceeds. Shares of a fund earn dividends on the business day the
purchase is effective, but not on the business day the redemption is effective.
Each fund distributes capital gains, if any, once a year. However, a fund may
make more or fewer payments in a given year, depending on its investment results
and its tax compliance situation. Each fund's dividends and distributions
consist of most or all of its 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 from the         Exempt from federal, state,
  New York Tax Exempt Bond          and New York City personal
  Fund                              income taxes for New York
                                    residents only

  Income dividends from the         Exempt from federal and state
  California Bond Fund              personal income taxes for
                                    California residents only

  Income dividends from the         Exempt from federal personal
  Tax Exempt Bond Fund              income taxes

  Income dividends from             Ordinary income
  all other funds

  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 a fund is about to declare a long-term capital
gains distribution. A portion of the Tax Exempt Bond, New York Tax Exempt Bond
and California Bond funds' returns may be subject to federal, state, or local
tax, or the alternative minimum tax. Every January, each fund issues tax
information on its distributions for the previous year. Any investor for whom a
fund does not have a valid taxpayer identification number will be subject to
backup withholding for taxes. The tax considerations described in this section
do not apply to tax-deferred accounts or other non-taxable entities. Because
each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.


20 | YOUR INVESTMENT
<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------

BUSINESS STRUCTURE

As noted earlier, each fund (except the California Bond Fund) is a series of
J.P. Morgan Funds, a Massachusetts business trust, and a "feeder" fund that
invests in a master portfolio. (Except where indicated, this prospectus uses the
term "the fund" to mean the feeder fund and its master portfolio taken
together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-521-5411. Generally, when a master
portfolio seeks a vote, each of its feeder funds will hold a shareholder meeting
and cast its vote proportionately, as instructed by its shareholders. Fund
shareholders are entitled to one full or fractional vote for each dollar or
fraction of a dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether it should hire its own investment adviser, invest in
a different master portfolio, or take other action.

The California Bond 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.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers.

J.P. Morgan, as co-administrator, oversees each fund's other service providers.

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:

  Advisory services            Percentage of the master
                               portfolio's average net assets

  Short Term Bond                      0.25%

  Bond                                 0.30%

  Global Strategic Income              0.45%

  Emerging Markets Debt                0.70%

  Tax Exempt Bond                      0.30%

  New York Tax Exempt Bond             0.30%

  Administrative services      Master portfolio's and fund's pro-
  (fee shared with Funds       rata portions of 0.09% of the
  Distributor, Inc.)           first $7 billion of average net
                               assets in J.P. Morgan-advised
                               portfolios, plus 0.04% of average
                               net assets over $7 billion

  Shareholder services         0.25% of each fund's average
                               net assets

The California Bond Fund, subject to the expense reimbursements described
earlier in this prospectus, pays J.P. Morgan 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 of
  Distributor, Inc.)           average net assets in 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 a fund.



                                                               FUND DETAILS | 21
<PAGE>

- --------------------------------------------------------------------------------

RISK AND REWARD ELEMENTS

This table discusses the main elements that make up each fund's overall risk and
reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Potential risks                   Potential rewards               Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>
Market conditions

o Each fund's share price,        o Bonds have generally          o Under normal circumstances the funds plan to remain fully
  yield, and total return will      outperformed money market       invested in bonds and other fixed income securities as noted in
  fluctuate in response to          investments over the long       the table on pages 24-25
  bond market movements             term, with less risk than
                                    stocks                        o The funds seek to limit risk and enhance total return or yields
o The value of most bonds will                                      through careful management, sector allocation, individual
  fall when interest rates        o Most bonds will rise in         securities selection, and duration management
  rise; the longer a bond's         value when interest rates
  maturity and the lower its        fall                          o During severe market downturns, the funds have the option of
  credit quality, the more its                                      investing up to 100% of assets in investment-grade short-term
  value typically falls           o Mortgage-backed and             securities
                                    asset-backed securities can
o Adverse market conditions         offer attractive returns      o J.P. Morgan monitors interest rate trends, as well as
  may from time to time cause                                       geographic and demographic information related to
  a fund to take temporary                                          mortgage-backed securities and mortgage prepayments
  defensive positions that are
  inconsistent with its
  principal investment
  strategies and may hinder a
  fund from achieving its
  investment objective

o Mortgage-backed and
  asset-backed securities
  (securities representing an
  interest in, or secured by,
  a pool of mortgages or other
  assets such as receivables)
  could generate capital
  losses or periods of low
  yields if they are paid off
  substantially earlier or
  later than anticipated

Credit quality

o The default of an issuer        o Investment-grade bonds have   o Each fund maintains its own policies for balancing credit
  would leave a fund with           a lower risk of default         quality against potential yields and gains in light of its
  unpaid interest or principal                                      investment goals
                                  o Junk bonds offer higher
o Junk bonds (those rated           yields and higher potential   o J.P. Morgan develops its own ratings of unrated securities and
  BB/Ba or lower) have a            gains                           makes a credit quality determination for unrated securities
  higher risk of default, tend
  to be less liquid, and may
  be more difficult to value

Foreign investments

o A fund could lose money         o Foreign bonds, which          o Foreign bonds are a primary investment only for the Global
  because of foreign                represent a major portion of    Strategic Income and Emerging Markets Debt funds and may be a
  government actions,               the world's fixed income        significant investment for the Short Term Bond and Bond funds;
  political instability, or         securities, offer attractive    the Tax Exempt Bond, New York Tax Exempt Bond and California
  lack of adequate and              potential performance and       Bond funds are not permitted to invest any assets in foreign
  accurate information              opportunities for               bonds
                                    diversification
o Currency exchange rate                                          o To the extent that a fund invests in foreign bonds, it may
  movements could reduce gains    o Favorable exchange rate         manage the currency exposure of its foreign investments
  or create losses                  movements could generate        relative to its benchmark, and may hedge a portion of its
                                    gains or reduce losses          foreign currency exposure into the U.S. dollar from time to
o Currency and investment                                           time (see also "Derivatives"); these currency management
  risks tend to be higher in      o Emerging markets can offer      techniques may not be available for certain emerging markets
  emerging markets                  higher returns                  investments

Management choices

o A fund could underperform       o A fund could outperform its   o J.P. Morgan focuses its active management on those areas where
  its benchmark due to its          benchmark due to these same     it believes its commitment to research can most enhance returns
  sector, securities or             choices                         and manage risks in a consistent way
  duration choices
</TABLE>


22 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Potential risks                   Potential rewards               Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>
Derivatives

o Derivatives such as futures,    o Hedges that correlate well    o The funds use derivatives, such as futures, options, swaps and
  options, swaps and forward        with underlying positions       forward foreign currency contracts, for hedging and for risk
  foreign currency contracts        can reduce or eliminate         management (i.e., to adjust duration or yield curve exposure,
  that are used for hedging         losses at low cost              or to establish or adjust exposure to particular securities,
  the portfolio or specific                                         markets, or currencies); risk management may include management
  securities may not fully        o A fund could make money and     of a fund's exposure relative to its benchmark; the Tax Exempt
  offset the underlying             protect against losses if       Bond, New York Tax Exempt Bond and California Bond funds are
  positions(1) and this could       management's analysis proves    permitted to enter into futures and options transactions,
  result in losses to the fund      correct                         however, these transactions result in taxable gains or losses
  that would not have                                               so it is expected that these funds will utilize them
  otherwise occurred              o Derivatives that involve        infrequently; forward foreign currency contracts are not
                                    leverage could generate         permitted to be used by the Tax Exempt Bond, New York Tax
o Derivatives used for risk         substantial gains at low        Exempt Bond and California Bond funds
  management may not have the       cost
  intended effects and may                                        o The funds only establish hedges that they expect will be highly
  result in losses or missed                                        correlated with underlying positions
  opportunities
                                                                  o While the funds may use derivatives that incidentally involve
o The counterparty to a                                             leverage, they do not use them for the specific purpose of
  derivatives contract could                                        leveraging their portfolios
  default

o Certain types of derivatives
  involve costs to the funds
  which can reduce returns

o Derivatives that involve
  leverage could magnify
  losses

Securities lending

o When a fund lends a             o A fund may enhance income     o J.P. Morgan maintains a list of approved borrowers
  security, there is a risk         through the investment of
  that the loaned securities        the collateral received from  o The fund receives collateral equal to at least 100% of the
  may not be returned if the        the borrower                    current value of securities loaned
  borrower defaults
                                                                  o The lending agents indemnify a fund against borrower default
o The collateral will be
  subject to the risks of the                                     o J.P. Morgan's collateral investment guidelines limit the
  securities in which it is                                         quality and duration of collateral investment to minimize
  invested                                                          losses

                                                                  o Upon recall, the borrower must return the securities loaned
                                                                    within the normal settlement period

Illiquid holdings

o A fund could have difficulty    o These holdings may offer      o No fund may invest more than 15% of net assets in illiquid
  valuing these holdings            more attractive yields or       holdings
  precisely                         potential growth than
                                    comparable widely traded      o To maintain adequate liquidity to meet redemptions, each fund
o A fund could be unable to         securities                      may hold investment-grade short-term securities (including
  sell these holdings at the                                        repurchase agreements and reverse purchase agreements) and, for
  time or price desired                                             temporary or extraordinary purposes, may borrow from banks up
                                                                    to 33 1/3% of the value of its total assets

When-issued and delayed
delivery securities

o When a fund buys securities     o A fund can take advantage of  o Each fund uses segregated accounts to offset leverage risk
  before issue or for delayed       attractive transaction
  delivery, it could be             opportunities
  exposed to leverage risk if
  it does not use segregated
  accounts

Short-term trading


o Increased trading would         o A fund could realize gains    o The funds may use short-term trading to take advantage of
  raise a fund's transaction        in a short period of time       attractive or unexpected opportunities or to meet demands
  costs                                                             generated by shareholder activity. The turnover rate for each
                                  o A fund could protect against    fund for its most recent fiscal year end is as follows: Short
o Increased short-term capital      losses if a bond is             Term Bond (398%), Bond (465%), Global Strategic Income (318%),
  gains distributions would         overvalued and its value        Emerging Markets Debt, for the seven months ended 7/31/99
  raise shareholders' income        later falls                     (555%), Tax Exempt Bond, for the eleven months ended 7/31/99
  tax liability                                                     (29%), New York Tax Exempt Bond, for the four months ended
                                                                    7/31/99 (8%), and California Bond (40%).


(1)   A futures contract is an agreement to buy or sell a set quantity of an underlying instrument at a future date, or to make or
      receive a cash payment based on changes in the value of a securities index. An option is the right to buy or sell a set
      quantity of an underlying instrument at a pre-determined price. A swap is a privately negotiated agreement to exchange one
      stream of payments for another. A forward foreign currency contract is an obligation to buy or sell a given currency on a
      future date and at a set price.
</TABLE>


                                                               FUND DETAILS | 23
<PAGE>

- --------------------------------------------------------------------------------

Investments

This table discusses the customary types of investments which can be held by
each fund. In each case the principal types of risk are listed on the following
page (see below for definitions).This table reads across two pages.

O   Permitted (and if applicable, percentage limitation)
         percentage of total assets   - bold
         percentage of net assets     - italic
*   Permitted, but not typically used
+   Permitted, but no current intention of use
- --  Not permitted

<TABLE>
<CAPTION>

                                                                              Global     Emerging    Tax      New York
                                                        Short Term           Strategic   Markets    Exempt   Tax Exempt   California
                           Principal Types of Risk         Bond       Bond    Income       Debt      Bond       Bond         Bond
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                            <C>         <C>      <C>        <C>       <C>        <C>          <C>
Asset-backed securities      credit, interest
Interests in a stream of     rate, market,
payments from specific       prepayment                     O           O        O          *         *          *            *
assets, such as auto or
credit card receivables.
- ------------------------------------------------------------------------------------------------------------------------------------
Bank obligations             credit, currency,
Negotiable certificates      liquidity, political
of deposit, time deposits                                   O(1)        O(1)     O          O         *          *            *
and bankers' acceptances                                                                            Domestic  Domestic     Domestic
of domestic and foreign                                                                               Only      Only         Only
issuers.
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial paper             credit, currency,
Unsecured short term debt    interest rate,
issued by domestic and       liquidity, market,
foreign banks or             political                      O(1)        O(1)     *          *         O          O            O
corporations. These
securities are usually
discounted and are rated
by S&P or Moody's.
- ------------------------------------------------------------------------------------------------------------------------------------
Convertible securities       credit, currency,
Domestic and foreign debt    interest rate,
securities that can be       liquidity, market,             O(1)        O(1)     *          O         --         --           --
converted into equity        political, valuation
securities at a future
time and price.
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate bonds Debt         credit, currency,
securities of domestic       interest rate,
and foreign industrial,      liquidity, market,             O(1)        O(1)     O          O         --         --           --
utility, banking, and        political, valuation
other financial
institutions.
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgages (directly held)    credit,
Domestic debt instrument     environmental,
which gives the lender a     extension, interest
lien on property as          rate, liquidity,               O           O        O          +         +          +            +
security for the loan        market, natural
payment.                     event, political,
                             prepayment,
                             valuation
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage-backed              credit, currency,
securities Domestic and      extension, interest
foreign securities (such     rate, leverage,
as Ginnie Maes, Freddie      market, political,
Macs, Fannie Maes) which     prepayment
represent interests in                                      O(1)        O(1)     O          *         --         --           --
pools of mortgages,
whereby the principal and
interest paid every month
is passed through to the
holder of the securities.
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage dollar rolls The    currency, extension,
purchase of domestic or      interest rate,
foreign mortgage-backed      leverage, liquidity,
securities with the          market, political,
promise to purchase          prepayment
similar securities upon                                     O(1)        O(1)     O          --        --         --           --
the maturity of the                                        33 1/3%     33 1/3%  33 1/3%
original security.
Segregated accounts are
used to offset leverage
risk.
- ------------------------------------------------------------------------------------------------------------------------------------
Participation interests      credit, currency,
Interests that represent     extension, interest
a share of domestic or       rate, liquidity,               O(1)        O(1)     O          O         --         --           --
foreign bank debt or         political,
similar securities or        prepayment
obligations.
- ------------------------------------------------------------------------------------------------------------------------------------
Private placements Bonds     credit, interest
or other investments that    rate, liquidity,
are sold directly to an      market, valuation              O           O        O          O         O          O            O
institutional investor.
- ------------------------------------------------------------------------------------------------------------------------------------
REITs and other              credit, interest
real-estate related          rate, liquidity,
instruments Securities of    market, natural                O           O        O          --        --         --           --
issuers that invest in       event, prepayment,
real estate or are           valuation
secured by real estate.
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreements        credit
Contracts whereby the
fund agrees to purchase a
security and resell it to                                   O           O        O          O         *          *            *
the seller on a
particular date and at a
specific price.
- ------------------------------------------------------------------------------------------------------------------------------------
Reverse repurchase           credit
agreements Contracts
whereby the fund sells a
security and agrees to                                      O(3)        O(3)     O(3)       O(3)      *(3)       *(3)         *(3)
repurchase it from the
buyer on a particular
date and at a specific
price. Considered a form
of borrowing.
- ------------------------------------------------------------------------------------------------------------------------------------
Sovereign debt, Brady        credit, currency,
bonds, and debt of           interest rate,
supranational                market, political
organizations Dollar- or
non-dollar-denominated
securities issued by                                        O(1)        O(1)     O          O         --         --           --
foreign governments or
supranational
organizations. Brady
bonds are issued in
connection with debt
restructurings.
- ------------------------------------------------------------------------------------------------------------------------------------
Swaps Contractual            credit, currency,
agreement whereby a          interest rate,
domestic or foreign party    leverage, market,
agrees to exchange           political                      O(1)        O(1)     O          O         O          --           --
periodic payments with a
counterparty. Segregated
accounts are used to
offset leverage risk.
- ------------------------------------------------------------------------------------------------------------------------------------
Synthetic variable rate      credit, interest
instruments Debt             rate, leverage,
instruments whereby the      liquidity, market
issuer agrees to exchange                                   --          --       --         --        O          O            O
one security for another
in order to change the
maturity or quality of a
security in the fund.
- ------------------------------------------------------------------------------------------------------------------------------------
Tax exempt municipal         credit, interest
securities Securities,       rate, market,
generally issued as          natural event,
general obligation and       political
revenue bonds, whose                                        *           *        --         --        O(2)       O(2)         O(2)
interest is exempt from
federal taxation and
state and/or local taxes
in the state where the
securities were issued.
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. government              interest rate
securities Debt
instruments (Treasury
bills, notes, and bonds)                                    O           O        O          O         O          O            O
guaranteed by the U.S.
government for the timely
payment of principal and
interest.
- ------------------------------------------------------------------------------------------------------------------------------------
Zero coupon, pay-in-kind,    credit, currency,
and deferred payment         interest rate,
securities Domestic and      liquidity, market,
foreign securities           political, valuation
offering non-cash or
delayed-cash payment.                                       O(1)        O(1)     O          O         O          O            O
Their prices are
typically more volatile
than those of some other
debt instruments and
involve certain special
tax considerations.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


Risk related to certain investments held by J.P. Morgan fixed income funds:

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.

Currency risk The risk currency exchange rate fluctuations may reduce gains or
increase losses on foreign investments.

Environmental risk The risk that an owner or operator of real estate may be
liable for the costs associated with hazardous or toxic substances located on
the property.

Extension risk The risk a rise in interest rates will extend the life of a
mortgage-backed security to a date later than the anticipated prepayment date,
causing the value of the investment to fall.

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 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)   For each of the Short Term Bond and Bond funds, all foreign securities in
      the aggregate may not exceed 25% of such fund's assets.


(2)   At least 65% of the California Bond Fund's assets must be in California
      municipal securities, at least 65% of the New York Tax Exempt Bond Fund's
      assets must be in New York municipal securities, and at least 80% of the
      New York Tax Exempt and Tax Exempt Bond Funds' assets must be in tax
      exempt securities.


(3)   All forms of borrowing (including securities lending and reverse
      repurchase agreements) in the aggregate may not exceed 33 1/3 of the
      fund's total assets.


24 & 25 | FUND DETAILS
<PAGE>


- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each fund's
financial performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions). Except where noted, this information has been
audited by PricewaterhouseCoopers LLP, whose reports, along with each fund's
financial statements, are included in the respective fund's annual report, which
are available upon request.

- --------------------------------------------------------------------------------

J.P. MORGAN SHORT TERM BOND FUND

<TABLE>
<CAPTION>

Per-share data                                                               For fiscal years ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                   1995           1996           1997           1998           1999
<S>                                                              <C>             <C>           <C>            <C>            <C>
Net asset value, beginning of year ($)                             9.60           9.84           9.86           9.85           9.98
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                       0.57           0.53           0.58           0.56           0.57
   Net realized and unrealized gain (loss)
   on investment ($)                                               0.24           0.02          (0.01)          0.13          (0.31)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                               0.81           0.55           0.57           0.69           0.26
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                      (0.57)         (0.53)         (0.58)         (0.56)         (0.51)
   Net realized gain ($)                                             --             --             --             --          (0.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                           (0.57)         (0.53)         (0.58)         (0.56)         (0.56)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($)                                   9.84           9.86           9.85           9.98           9.68
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                   8.70           5.77           5.98           7.24           2.70
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands)                            10,330          8,207         14,519         30,984         38,714
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                0.67           0.62           0.50           0.50           0.57
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                       5.88           5.42           5.94           5.66           5.24
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                              1.48           1.61           1.38           0.98           0.80
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Not annualized.
(2)   Annualized.


26 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

J.P. MORGAN BOND FUND

<TABLE>
<CAPTION>

Per-share data                                                               For fiscal years ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                               1995            1996            1997            1998            1999
<S>                                                         <C>             <C>             <C>             <C>             <C>
Net asset value, beginning of year ($)                         9.64           10.41           10.30           10.42           10.59
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                   0.64            0.62            0.66            0.65            0.58
   Net realized and unrealized gain (loss)
   on investment ($)                                           0.77           (0.11)           0.18            0.17           (0.60)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                           1.41            0.51            0.84            0.82           (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                  (0.64)          (0.62)          (0.65)          (0.65)          (0.59)
   Net realized gain ($)                                         --              --           (0.07)             --           (0.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                       (0.64)          (0.62)          (0.72)          (0.65)          (0.70)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($)                              10.41           10.30           10.42           10.59            9.87
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                              15.10            5.13            8.58            8.06           (0.23)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands)                       143,004         149,207         169,233         216,285         234,874
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                            0.69            0.66            0.68            0.66            0.69
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                   6.40            6.08            6.41            6.14            5.72
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                          0.69            0.66            0.68            0.66            0.69
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   Not annualized.
(2)   Annualized.

- --------------------------------------------------------------------------------

J.P. MORGAN GLOBAL STRATEGIC INCOME FUND

<TABLE>
<CAPTION>

Per-share data                                                                                   For fiscal periods ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          1998(1)              1999
<S>                                                                                                     <C>                   <C>
Net asset value, beginning of period ($)                                                                 10.21                 9.77
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                                              0.70                 0.60
   Net realized and unrealized loss
   on investment ($)                                                                                     (0.49)               (0.38)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                                      0.21                 0.22
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                                                             (0.63)               (0.59)
   Return of capital                                                                                     (0.02)                  --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                                                  (0.65)               (0.59)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                                        9.77                 9.40
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                                          1.97(2)              2.26
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                                 10,166                9,073
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                                                       1.00(3)              1.00
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                                              6.24(3)              6.35
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                                     1.89(3)              1.54
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 11/5/97.
(2)   Not annualized.
(3)   Annualized.


                                                               FUND DETAILS | 27
<PAGE>

- --------------------------------------------------------------------------------

J.P. MORGAN EMERGING MARKETS DEBT FUND

<TABLE>
<CAPTION>

                                                                                                                      For the seven
                                                                                                                             months
Per-share data                                                                           For periods ended                    ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                     12/31/97(1)        12/31/98            7/31/99
<S>                                                                                    <C>                <C>              <C>
Net asset value, beginning of period ($)                                                10.00               9.76             7.30
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                             0.58               1.15             0.49
   Net realized and unrealized loss
   on investment ($)                                                                    (0.05)             (2.64)            0.02
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                     0.53              (1.49)            0.51
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                                            (0.58)             (0.81)           (0.52)
   Excess of net investment income ($)                                                  (0.02)             (0.16)              --
   Net realized gain ($)                                                                (0.17)               .--               --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                                 (0.77)             (0.97)           (0.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                       9.76               7.30             7.29
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                         5.47(2)          (15.93)            7.27(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                                11,978             19,313           26,216
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                                      1.25(3)            1.25             1.25(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                             9.71(3)           10.05            12.28(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                    2.40(3)            2.09             2.51(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Interest Expense                                                                        --                 --             0.02(3)
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 4/17/97.
(2)   Not annualized.
(3)   Annualized.

- --------------------------------------------------------------------------------

J.P. MORGAN TAX EXEMPT BOND FUND

<TABLE>
<CAPTION>
                                                                                                                      For the 11
                                                                                                                          months
Per-share data                                                            For periods ended                                ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                              8/31/94        8/31/95        8/31/96        8/31/97        8/31/98        7/31/99
<S>                                           <C>            <C>            <C>            <C>            <C>            <C>
Net asset value, beginning of period ($)        12.04          11.45          11.73          11.63          11.85          12.15
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                     0.51           0.55           0.55           0.55           0.54           0.46
   Net realized and unrealized gain (loss)
   on investment ($)                            (0.35)          0.29          (0.08)          0.24           0.30          (0.36)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)             0.16           0.84           0.47           0.79           0.84           0.10
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                    (0.51)         (0.55)         (0.55)         (0.55)         (0.54)          0.46
   Net realized gain ($)                        (0.24)         (0.01)         (0.02)         (0.02)         (0.00)(1)      (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)         (0.75)         (0.56)         (0.57)         (0.57)         (0.54)         (0.48)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)              11.45          11.73          11.63          11.85          12.15          11.77
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                 1.35           7.63           4.01           6.95           7.21           0.83(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)       392,460        352,005        369,987        401,007        439,225        431,685
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                              0.71           0.71           0.64           0.64           0.64           0.68(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                     4.39           4.87           4.67           4.67           4.44           4.21(3)
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Less than $0.01 per share.
(2)   Not annualized.
(3)   Annualized.


28 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

J.P. MORGAN NEW YORK TAX EXEMPT BOND FUND

<TABLE>
<CAPTION>
                                                                                                                     For the four
                                                                                                                           months
Per-share data                                                             For periods ended                                ended
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>              <C>           <C>           <C>          <C>           <C>
                                                 3/31/95(1)       3/31/96       3/31/97       3/31/98       3/31/99       7/31/99
Net asset value, beginning of period ($)          10.00            10.11         10.34         10.28         10.62         10.66
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                       0.40             0.46          0.46          0.46          0.42          0.13
   Net realized and unrealized gain (loss)
   on investment ($)                               0.11             0.26         (0.03)         0.40          0.14         (0.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)               0.51             0.72          0.43          0.86          0.56         (0.15)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                      (0.40)           (0.46)        (0.46)        (0.46)        (0.42)        (0.13)
   Net realized gain ($)                             --            (0.03)        (0.03)        (0.06)        (0.10)        (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)           (0.40)           (0.49)        (0.49)        (0.52)        (0.52)        (0.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                10.11            10.34         10.28         10.62         10.66         10.35
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                   5.26(2)          7.16          4.19          8.49          5.39         (1.41)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)          38,137           50,523        56,198        85,161       119,152       115,690
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                0.75(3)          0.75          0.75          0.71          0.70          0.70(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                       4.31(3)          4.43          4.44          4.33          3.95          3.82(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)              0.97(3)          0.79          0.81          0.77          0.74          0.78(3)
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   The fund commenced operations on 4/11/94.
(2)   Not annualized.
(3)   Annualized.

- --------------------------------------------------------------------------------

J.P. MORGAN CALIFORNIA BOND FUND-SELECT SHARES

<TABLE>
<CAPTION>

                                                                                                                      For the six
                                                                                                                           months
Per-share data                                                                    For fiscal periods ended                  ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          4/30/97(1)        4/30/98       4/30/99        10/31/99
                                                                                                                        (unaudited)
<S>                                                                        <C>               <C>           <C>            <C>
Net asset value, beginning of period ($)                                   10.00             10.04          10.35          10.57
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                0.01              0.41           0.40           0.20
   Net realized and unrealized gain (loss)
   on investment ($)                                                        0.04              0.31           0.26          (0.39)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                        0.05              0.72           0.66          (0.19)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($)                                                  (0.01)            (0.41)         (0.40)         (0.20)
   Net realized gain ($)                                                      --                --          (0.04)            --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                    (0.01)            (0.41)         (0.44)         (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                         10.04             10.35          10.57          10.18
- ------------------------------------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                            0.51(2)           7.20           6.43          (1.84)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                      302             5,811         17,391         15,209
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                         0.62(3)           0.65           0.65           0.65(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                4.52(3)           3.94           3.76           3.76(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                       1.17(3)           1.00           0.87           0.83(3)
   ---------------------------------------------------------------------------------------------------------------------------------
   Portfolio turnover (%)                                                     40                44             40           0.54
   ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)   The fund commenced operations on 4/21/97.
(2)   Not annualized.
(3)   Annualized.


                                                               FUND DETAILS | 29
<PAGE>

- --------------------------------------------------------------------------------

FOR MORE INFORMATION

- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:

J.P. Morgan Funds
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
funds' investment company and 1933 Act registration numbers are:

J.P. Morgan Short Term Bond Fund .......................811-07340 and 033-54632
J.P. Morgan Bond Fund ..................................811-07340 and 033-54632
J.P. Morgan Global Strategic Income Fund ...............811-07340 and 033-54632
J.P. Morgan Emerging Markets Debt Fund .................811-07340 and 033-54632
J.P. Morgan Tax Exempt Bond Fund .......................811-07340 and 033-54632
J.P. Morgan New York Tax Exempt Bond Fund ..............811-07340 and 033-54632
J.P. Morgan California Bond Fund .......................811-07795 and 333-11125

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


<PAGE>

- --------------------------------------------------------------------------------
                                                      March 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------


J.P. MORGAN INSTITUTIONAL
FIXED INCOME FUNDS

Short Term Bond Fund
Bond Fund
Global Strategic Income Fund
Tax Exempt Bond Fund
New York Tax Exempt Bond Fund
California Bond Fund

                                     -------------------------------------------
                                     Seeking high total return or current income
                                     by investing primarily in
                                     fixed income securities.

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense to state or suggest otherwise.

Distributed by Funds Distributor, Inc.                                  JPMorgan

<PAGE>

- --------------------------------------------------------------------------------

<PAGE>


CONTENTS
- --------------------------------------------------------------------------------
2 | Each fund's goal, principal strategies, principal risks, performance and
    expenses


J.P. MORGAN INSTITUTIONAL FIXED INCOME FUNDS
J.P. Morgan Institutional Short Term Bond Fund ............................   2
J.P. Morgan Institutional Bond Fund .......................................   4
J.P. Morgan Institutional Global Strategic Income Fund ....................   6
J.P. Morgan Institutional Tax Exempt Bond Fund ............................   8
J.P. Morgan Institutional New York Tax Exempt Bond Fund ...................  10
J.P. Morgan Institutional California Bond Fund ............................  12

14 | Principles and techniques common to the funds in this prospectus

FIXED INCOME MANAGEMENT APPROACH
J.P. Morgan ...............................................................  14
J.P. Morgan Institutional fixed income funds ..............................  14
The spectrum of fixed income funds ........................................  14
Who may want to invest ....................................................  14
Fixed income investment process ...........................................  15

16 | Investing in the J.P. Morgan Institutional Fixed Income funds

YOUR INVESTMENT
Investing through a financial professional ................................  16
Investing through an employer-sponsored retirement plan ...................  16
Investing through an IRA or rollover IRA ..................................  16
Investing directly ........................................................  16
Opening your account ......................................................  16
Adding to your account ....................................................  16
Selling shares ............................................................  17
Account and transaction policies ..........................................  17
Dividends and distributions ...............................................  18
Tax considerations ........................................................  18

19 | More about risk and the funds' business operations

FUND DETAILS
Business structure ........................................................  19
Management and administration .............................................  19
Risk and reward elements ..................................................  20
Investments ...............................................................  22
Financial highlights ......................................................  24

FOR MORE INFORMATION ................................................back cover

<PAGE>

J.P. MORGAN INSTITUTIONAL
SHORT TERM BOND FUND                                        TICKER SYMBOL: JMSBX
- --------------------------------------------------------------------------------
                                REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
                                (J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return, consistent with low volatility
of principal. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, domestic and foreign corporate bonds, private placements,
asset-backed and mortgage-related securities, and money market instruments, that
it believes have the potential to provide a high total return over time. These
securities may be of any maturity, but under normal market conditions the fund's
duration will range between one and three years, similar to that of the Merrill
Lynch 1-3 Year Treasury Index. For a description of duration, please see fixed
income investment process on page 15.

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. The fund
typically hedges its non-dollar investments back to the U.S. dollar. 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,
including at least 75% A or better. No more than 10% of assets may be invested
in securities rated B or BB.

Principal Risks

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
duration fixed income funds will depend on the success of the investment
process, which is described on page 15.

Although any rise in interest rates is likely to cause a fall in the price of
bonds, the fund's comparatively short duration is designed to help keep its
share price within a relatively narrow range. Because it seeks to minimize risk,
the fund will generally offer less income, and during periods of declining
interest rates, may offer lower total returns than bond funds with longer
durations. Because of the sensitivity of the fund's mortgage related securities
to changes in interest rates, the performance and duration of the fund may be
more volatile than if it did not hold these securities. The fund uses futures
contracts and other derivatives to help manage duration, yield curve exposure,
and credit and spread volatility. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, often called junk bonds, it
takes on additional risks, since these bonds are more sensitive to economic news
and their issuers have a less secure financial position. To the extent the fund
invests in foreign securities, it could lose money because of foreign government
actions, political instability, currency fluctuation or lack of adequate and
accurate information. The fund may engage in active and frequent trading,
leading to increased portfolio turnover and the possibility of increased capital
gains. See page 18 for further discussion on the tax treatment of capital gains.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $53 billion using similar
strategies as the fund.

The portfolio management team is led by Connie J. Plaehn, managing director, who
has been on the team since the fund's inception and has been at J.P. Morgan
since 1984, and William G. Tennille, vice president, who joined the team in
January 1994 and has been at J.P. Morgan since 1992.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


2 | J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND

<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Short Term Bond Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 6 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past one year, five years and life of the fund compare to those
of the Merrill Lynch 1-3 Year Treasury Index. This is a widely recognized,
unmanaged index of U.S. Treasury notes and bonds with maturities of 1-3 years
used as a measure of overall short-term bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Year-by-year total return (%)    Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
                               1994     1995     1996     1997     1998    1999


20%



                                       10.80
10%


                                                                    7.04
                                                           6.40
                                                  5.10


                                                                            3.21

                                0.36
0%
- --------------------------------------------------------------------------------


[_] J.P. Morgan Institutional Short Term Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 3.36% (for the quarter ended 6/30/95); and the
lowest quarterly return was -0.47% (for the quarter ended 3/31/94).


<TABLE>
<CAPTION>

Average annual total return                            Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Past 1 yr.   Past 5 yrs.  Life of fund(1)
<S>                                                                                           <C>          <C>           <C>
J.P. Morgan Institutional Short Term Bond Fund (after expenses)                               3.21         6.48          5.30
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch 1-3 Year Treasury Index (no expenses)                                           3.06         6.51          5.42
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Annual fund operating expenses(3) %
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.25
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.26
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.51

Fee waiver and expense
reimbursement(4)                                                            0.21
- --------------------------------------------------------------------------------
Net expenses(4)                                                             0.30

Expense example (4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                    1 yr.      3 yrs.      5 yrs.      10 yrs.
Your cost($)         31         142         264         620
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 9/13/93. For the period 7/31/93 through
      9/30/93, life of fund returns reflect performance of the Pierpont Short
      Term Bond Fund.

(2)   The fund's fiscal year end is 10/31.


(3)   The fund has a master/feeder structure as described on page 19. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.

(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.30% of the fund's
      average daily net assets through 2/28/01. Actual net expenses for the
      fiscal year ended 10/31/99 were 0.29% of the fund's average daily net
      assets.



                              J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND | 3
<PAGE>

J.P. MORGAN INSTITUTIONAL BOND FUND                         TICKER SYMBOL: JMIBX
- --------------------------------------------------------------------------------
                                     REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
                                     (J.P. MORGAN INSTITUTIONAL BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return consistent with moderate risk of
capital and maintenance of liquidity. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, corporate bonds, private placements, asset-backed and
mortgage-backed securities, that it believes have the potential to provide a
high total return over time. These securities may be of any maturity, but under
normal market conditions the management team will keep the fund's duration
within one year of that of the Salomon Smith Barney Broad Investment Grade Bond
Index (currently about five years). For a description of duration, please see
fixed income investment process on page 15.

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. The fund
typically hedges its non-dollar investments back to the U.S. dollar. At least
75% 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,
including at least 65% A or better. No more than 25% of assets may be invested
in securities rated B or BB.

Principal Risks

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 15.


To the extent that the fund seeks higher returns by investing in
non-investment-grade bonds, often called junk bonds, it takes on additional
risks, since these bonds are more sensitive to economic news and their issuers
have a less secure financial position. The fund may use futures contracts and
other derivatives to help manage duration, yield curve exposure, and credit and
spread volatility. To the extent the fund invests in foreign securities, it
could lose money because of foreign government actions, political instability,
currency fluctuation or lack of adequate and accurate information. The fund's
mortgage-backed investments involve risk of losses due to default or to
prepayments that occur earlier or later than expected. The fund may engage in
active and frequent trading, leading to increased portfolio turnover and the
possibility of increased capital gains. See page 18 for further discussion on
the tax treatment of capital gains.


An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $29 billion using similar
strategies as the fund.


The portfolio management team is led by William G. Tennille, vice president, who
has been at J.P. Morgan since 1992, Connie J. Plaehn, managing director, who has
been at J.P. Morgan since 1984, and John Snyder, vice president, who has been at
J.P. Morgan since 1993. Mr. Tennille and Ms. Plaehn have been on the team since
January 1994. Mr. Snyder has been a fixed income portfolio manager since joining
J.P. Morgan.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


4 | J.P. MORGAN INSTITUTIONAL BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Bond Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 10 calendar years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Salomon
Smith Barney Broad Investment Grade Bond Index. This is a widely recognized,
unmanaged index of U.S. Treasury and agency securities and investment-grade
mortgage and corporate bonds used as a measure of overall bond market
performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Year-by-year total return (%)    Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
            1990   1991   1992   1993   1994   1995   1996   1997   1998   1999



20%

                                               18.42



                  13.45


           10.09
10%
                                 9.98                       9.29

                                                                   7.54
                         6.53


                                                      3.30


0%
- --------------------------------------------------------------------------------
                                                                          (0.55)

                                       (2.68)



(10%)

[ ] J.P. Morgan Institutional Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 6.30% (for the quarter ended 6/30/95); and the
lowest quarterly return was -2.38% (for the quarter ended 3/31/94).


<TABLE>
<CAPTION>

Average annual total return (%)                               Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Past 1 yr.   Past 5 yrs.  Past 10 yrs.(1)
<S>                                                                                          <C>           <C>           <C>
J.P. Morgan Institutional Bond Fund (after expenses)                                         (0.55)        7.41          7.37
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney Investment Grade Bond Index (no expenses)                               (0.83)        7.74          7.05
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                            0.30
Marketing (12b-1) fees                                                     none
Other expenses                                                             0.21
- --------------------------------------------------------------------------------
Total operating expenses                                                   0.51


Fee waiver and expense
reimbursement(4)                                                           0.01
- --------------------------------------------------------------------------------
Net expenses(4)                                                            0.50
- --------------------------------------------------------------------------------

Expense example(4)
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
7/30/99 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                            1 yr.     3 yrs.    5 yrs.     10 yrs.
Your cost($)                 51        163       284         640
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 7/26/93. Returns for the period 1/1/90
      through 7/31/93 reflect performance of The Pierpont Bond Fund, the fund's
      predecessor, which commenced operations on 3/11/88.


(2)   The fund's fiscal year end is 10/31.

(3)   The fund has a master/feeder structure as described on page 19. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.

(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.50% of the fund's
      average daily net assets through 2/28/01.


                                         J.P. MORGAN INSTITUTIONAL BOND FUND | 5
<PAGE>

J.P. MORGAN INSTITUTIONAL
GLOBAL STRATEGIC INCOME FUND                               TICKER SYMBOL:  JPIGX
- --------------------------------------------------------------------------------
                        REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
                        (J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high total return from a portfolio of fixed income
securities of foreign and domestic issuers. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests in a wide range of debt securities from the U.S. and other
markets, both developed and emerging. Issuers may include governments,
corporations, financial institutions, and supranational organizations (such as
the World Bank), that the fund believes have the potential to provide a high
total return over time. The fund may invest directly in mortgages and in
mortgage-backed securities. The fund's securities may be of any maturity, but
under normal market conditions its duration will generally be similar to that of
the Lehman Brothers Aggregate Bond Index (currently about four and a half
years). For a description of duration, please see fixed income investment
process on page 15. At least 40% 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. The balance of assets must be invested in securities
rated B or higher at the time of purchase (or the unrated equivalent), except
that the fund's emerging market component has no minimum quality rating and may
invest without limit in securities that are in the lowest rating categories (or
are the unrated equivalent).

The management team uses the process described on page 15, and also makes
country allocations, based primarily on macro-economic factors. The team uses
the model allocation shown at right as a basis for its sector allocation,
although the actual allocations are adjusted periodically within the indicated
ranges. Within each sector, a dedicated team handles securities selection. The
fund typically hedges its non-dollar investments in developed countries back to
the U.S. dollar.

Principal Risks

The fund's share price and total return vary in response to changes in global
bond markets, interest rates, and currency exchange rates. How well the fund's
performance compares to that of similar fixed income funds will depend on the
success of the investment process. Because of credit and foreign and emerging
markets investment risks, the fund's performance is likely to be more volatile
than that of most fixed income funds. Foreign and emerging market investment
risks include foreign government actions, political instability, currency
fluctuations and lack of adequate and accurate information. To the extent that
the fund seeks higher returns by investing in non-investment-grade bonds, often
called junk bonds, it takes on additional risks, since these bonds are more
sensitive to economic news and their issuers have a less secure financial
position. The fund's mortgage-backed investments involve the risk of losses due
to default or to prepayments that occur earlier or later than expected. Some
investments, including directly owned mortgages, may be illiquid. The fund has
the potential for long-term total returns that exceed those of more traditional
bond funds, but investors should also be prepared for risks that exceed those of
more traditional bond funds. The fund may engage in active and frequent trading,
leading to increased portfolio turnover and the possibility of increased capital
gains. See page 18 for further discussion on the tax treatment of capital gains.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

Model Sector Allocation

    [THE FOLLOWING WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIALS]

9% international non-dollar
(range 0-25%)

35% public/private mortgages
(range 20-45%)

13% public/private corporates
(range 5-25%)

16% emerging markets
(range 0-25%)

27% high yield corporates
(range 17-37%)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $3 billion using similar
strategies as the fund.


The portfolio management team is led by Mark E. Smith, managing director, who
joined J.P. Morgan in 1994 from Allied Signal, Inc. where he managed fixed
income portfolios and oversaw asset allocation activities. He has been on the
team since the fund's inception.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


6 | J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND

<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Global Strategic Income Fund.

The bar chart indicates some of the risks by showing the performance of the
fund's shares from year to year for each of the last 2 calendar years.

The table indicates some of the risks by showing how the fund's average annual
returns for the past one year and life of the fund compare to those of the
Lehman Brothers Aggregate Bond Index. This is a widely recognized, unmanaged
index used as a measure of overall bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.



Total return (%)                Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
                                                           1998        1999


10%



5%

                                                           2.59        2.51

0%
- --------------------------------------------------------------------------------


[_] J.P. Morgan Institutional Global Strategic Income Fund


For the period covered by this total return chart, the fund's highest quarterly
return was 3.13% (for the quarter ended 3/31/98); and the lowest quarterly
return was -1.45% (for the quarter ended 9/30/98).


<TABLE>
<CAPTION>

Average annual total return                                 Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Past 1 yr.   Life of fund(1)
<S>                                                                                                       <C>            <C>
J.P. Morgan Institutional Global Strategic Income Fund (after expenses)                                   2.51           5.35
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index (no expenses)                                                       (0.83)          6.49
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.


Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                            0.45
Marketing (12b-1) fees                                                     none
Other expenses                                                             0.33
- --------------------------------------------------------------------------------
Total operating expenses                                                   0.78


Fee waiver and expense
reimbursement(4)                                                           0.13
- --------------------------------------------------------------------------------
Net expenses(4)                                                            0.65

Expense example(4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
7/30/99 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                                   1 yr.        3 yrs.      5 yrs.     10 yrs.
Your cost($)                        66           236         420         954
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 3/14/97 and performance is calculated as
      of 3/31/97.

(2)   The fund's fiscal year is 10/31.


(3)   The fund has a master/feeder structure as described on page 19. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.


(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.65% of the fund's
      average daily net assets through 2/28/01.


                      J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND | 7
<PAGE>

J.P. MORGAN INSTITUTIONAL
TAX EXEMPT BOND FUND                                       TICKER SYMBOL:  JITBX
- --------------------------------------------------------------------------------
                                REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
                                (J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a high level of current income that is exempt from
federal income tax consistent with moderate risk of capital. This goal can be
changed without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests primarily in high quality municipal securities that it believes
have the potential to provide current income that is free from federal personal
income tax. While the fund's goal is high tax-exempt income, the fund may invest
to a limited extent in taxable securities, including U.S. government, government
agency, corporate, or taxable municipal securities. The fund's securities may be
of any maturity, but under normal market conditions the fund's duration will
generally range between four and seven years, similar to that of the Lehman
Brothers 1-16 Year Municipal Bond Index (currently 5.4 years). For a description
of duration, please see fixed income investment process on page 15. 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 rated B or BB.

Principal Risks

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
tax-exempt funds will depend on the success of the investment process, which is
described on page 15.

Investors should be prepared for higher share price volatility than from a tax
exempt fund of shorter duration. The fund's performance could also be affected
by market reaction to proposed tax legislation. To the extent that the fund
seeks higher returns by investing in non-investment-grade bonds, often called
junk bonds, it takes on additional risks, since these bonds are more sensitive
to economic news and their issuers have a less secure financial position.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
Approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in May 1997 and has been at J.P. Morgan since 1987, and Benjamin
Thompson, vice president, who joined the team in June of 1999. Prior to joining
J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at Goldman
Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


8 | J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional Tax Exempt Bond Fund.

The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the fund's last 10 calendar
years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past one, five and ten years compare to those of the Lehman
Brothers 1-16 Year Municipal Bond Index, the fund's current benchmark. Since
this index has not been in existence during all of the past ten years, the table
also shows the performance of the Lehman Quality Intermediate Municipal Bond
Index, the fund's previous benchmark. Both are unmanaged indices that measure
municipal bond market performance.


The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Year-by-year total return (%)    Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
            1990   1991   1992   1993   1994   1995   1996   1997   1998   1999


20%


                                              13.50
                  10.92
10%
                                 9.58

                         7.47                               7.58
            6.87                                                    5.65


                                                      3.71
0%
- --------------------------------------------------------------------------------
                                                                          (0.75)

                                       (2.53)



(10%)


[_] J.P. Morgan Institutional Tax Exempt Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 5.16% (for the quarter ended 3/31/95); and the
lowest quarterly return was 3.05% (for the quarter ended 3/31/94).



<TABLE>
<CAPTION>

Average annual total return (%)                         Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Past 1 yr.   Past 5 yrs.   Past 10 yrs.(1)
<S>                                                                                         <C>           <C>            <C>
J.P. Morgan Institutional Tax Exempt Bond Fund (after expenses)                             (0.75)        5.83           6.09
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses)                                (0.06)        6.32           6.63
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Quality Intermediate Municipal Bond Index (no expenses)                               0.30         6.25           7.79
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                           0.30
Marketing (12b-1) fees                                                    none
Other expenses                                                            0.23
- --------------------------------------------------------------------------------
Total operating expenses                                                  0.53

Fee waiver and expense
reimbursement(4)                                                          0.03
- --------------------------------------------------------------------------------
Net expenses(4)                                                           0.50
- --------------------------------------------------------------------------------


Expense example (4)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
8/1/99 through 11/28/00 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.


- --------------------------------------------------------------------------------
                        1 yr.       3 yrs.        5 yrs.       10 yrs.
Your cost($)             51          167           293           662
- --------------------------------------------------------------------------------


(1)   The fund commenced operations on 7/12/93. For the period 1/1/90 through
      7/31/93 returns reflect performance of The Pierpont Tax Exempt Bond Fund,
      the predecessor of the fund, which commenced operations on 10/3/84.

(2)   The fund's fiscal year end is 7/31. Prior to 1999, the fiscal year end was
      8/31.

(3)   The fund has a master/feeder structure as described on page 19. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year, expressed as a percentage of average net assets.


(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.50% of the fund's
      average daily net assets through 11/28/00.


                              J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND | 9
<PAGE>

J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND                                       TICKER SYMBOL:  JPNTX
- --------------------------------------------------------------------------------
                       REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
                       (J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide a high level of tax exempt income for New York
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests primarily in New York municipal securities that it believes
have the potential to provide high current income which is free from federal,
state, and New York City personal income taxes for New York residents. The fund
may also 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 New York residents but would be subject to New York
State and New York City personal income taxes. For non-New York residents, the
income from New York 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 seven years, similar to that of
the Lehman Brothers 1-16 Year Municipal Bond Index (currently 5.4 years). For a
description of duration, please see fixed income investment process on page 15.
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 rated B or
BB.

Principal Risks

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 15. Because most of the fund's investments will typically
be from issuers in the State of New York, 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, often called junk bonds, it
takes on additional risks, since these bonds are more sensitive to economic news
and their issuers have a less secure financial condition.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in June of 1997 and has been at J.P. Morgan since 1987, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


10 | J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional New York Tax Exempt Bond Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 5 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and the life of the fund 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 used as a measure of overall tax-exempt bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Year-by-year total return (%)    Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
                                      1995     1996     1997     1998    1999



20%


                                     13.28
10%

                                                        7.68
                                                                 5.61
                                               4.21

0%
- --------------------------------------------------------------------------------
                                                                         (0.73)


(10%)


[_] J.P. Morgan Institutional New York Tax Exempt Bond Fund


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 4.86% (for the quarter ended 3/31/95) and the
lowest quarterly return was -1.78%(for the quarter ended 6/30/99).


<TABLE>
<CAPTION>

Average annual total return (%)                      Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Past 1 yr.    Life of fund(1)
<S>                                                                                                     <C>              <C>
J.P. Morgan Institutional New York Tax Exempt Bond Fund (after expenses)                                (0.73)           5.30
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses)                                            (0.06)           5.95
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES

The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                           0.30
Marketing (12b-1) fees                                                    none
Other expenses                                                            0.29
- --------------------------------------------------------------------------------
Total operating expenses                                                  0.59

Fee waiver and expense
reimbursement(4)                                                          0.09
- --------------------------------------------------------------------------------
Net expenses(4)                                                           0.50
- --------------------------------------------------------------------------------

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, net expenses for the period
8/1/99 through 11/28/00 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                                   1 yr.    3 yrs.   5 yrs.   10 yrs.
Your cost($)                        51       180      320       729
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 4/11/94, and returns reflect performance
      of the fund from 4/30/94.


(2)   The fund's fiscal year end is 7/31. Prior to 1999 the fiscal year end was
      3/31.

(3)   The fund has a master/feeder structure as described on page 19. This table
      shows the fund's expenses and its share of master portfolio expenses for
      the past fiscal year expressed as a percentage of average net assets.


(4)   Reflects an agreement dated 7/30/99 by Morgan Guaranty Trust Company of
      New York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 0.50% of the fund's
      average daily net assets through 11/28/00.


                    J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND | 11
<PAGE>

J.P. MORGAN INSTITUTIONAL
CALIFORNIA BOND FUND                                        TICKER SYMBOL: JPICX
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                        REGISTRANT: J.P. MORGAN SERIES TRUST
                        (J.P. MORGAN CALIFORNIA BOND FUND: INSTITUTIONAL SHARES)

[GRAPHIC OMITTED]
RISK/RETURN SUMMARY

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 20-23.

[GRAPHIC OMITTED]
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 OMITTED]
INVESTMENT APPROACH
Principal Strategies

The fund invests primarily in California municipal securities that it believes
have the potential to provide high current income which 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 (currently 5.4 years). For a description of duration, please see
fixed income investment process on page 15. 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 rated B or BB.

Principal Risks

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 15. 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, often called junk bonds, it
takes on additional risks, because these bonds are more sensitive to economic
news and their issuers have a less secure financial condition.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $1.3 billion using similar
strategies as the fund.


The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in June of 1997 and has been at J.P. Morgan since 1987, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o     There is no assurance that the fund will meet its investment goal.

o     The fund does not represent a complete investment program.


12 | J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND
<PAGE>

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PERFORMANCE (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Institutional California Bond Fund.


The bar chart indicates some of the risks by showing changes in the performance
of the fund's shares from year to year for each of the last 3 calendar years.


The table indicates some of the risks by showing how the fund's average annual
returns for the past year and life of fund 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 used
as a measure of overall tax-exempt bond market performance.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.


Year-by-year total return (%)    Shows changes in returns by calendar year (1,2)
- --------------------------------------------------------------------------------
                                                    1997       1998       1999


10%

                                                    7.72

                                                               5.60
5%



0%
- --------------------------------------------------------------------------------
                                                                          (0.61)


(5%)


[ ] J.P. Morgan California Bond Fund: Institutional Shares


For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 3.44%(for the quarter ended 9/30/98) and the lowest
quarterly return was -2.03% (for the quarter ended 6/30/99).


<TABLE>
<CAPTION>

Average annual total return %                                  Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Past 1 yr.   Life of fund(1)
<S>                                                                                                       <C>             <C>
J.P. Morgan California Bond Fund:Institutional Shares (after expenses)                                    (0.61)          4.18
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses)                                              (0.06)          4.66
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
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(3) %
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                          0.30
Marketing (12b-1) fees                                                   none
Other expenses4                                                          0.42
- --------------------------------------------------------------------------------
Total annual fund
operating expenses                                                      40.72
- --------------------------------------------------------------------------------

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($)                  74        230        401          894
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 12/23/96, and returns reflect performance
      of the fund from 12/31/96.

(2)   The fund's fiscal year end is 4/30.


(3)   This table shows the fund's expenses for the past fiscal year, expressed
      as a percentage of average net assets.


(4)   After reimbursement, other expenses and total operating expenses are
      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 | 13
<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 380 analysts and portfolio managers
around the world and approximately $349 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN INSTITUTIONAL FIXED INCOME FUNDS

These funds invest primarily in bonds and other fixed income securities, either
directly or through a master portfolio (another fund with the same goal). The
funds seek high total return or high current income.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor,
emphasizes the potential for consistently enhancing performance while managing
risk.

THE SPECTRUM OF FIXED INCOME FUNDS

The funds described in this prospectus pursue different goals and offer varying
degrees of risk and potential reward. The table below shows degrees of the
relative risk and return that these funds potentially offer. These and other
distinguishing features of each fixed income fund were described on the
preceding pages. Differences among these funds include:

o the types of securities they hold

o the tax status of the income they offer

o the relative emphasis on current income versus total return


- --------------------------------------------------------------------------------
Potential risk and return
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

* Based on tax-equivalent returns for an investor in the highest income tax
bracket.

- --------------------------------------------------------------------------------
Who May Want to Invest

The funds are 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     with regard to the Tax Exempt Bond Fund, are seeking income that is exempt
      from federal personal income tax

o     with regard to the state-specific funds, are seeking income that is exempt
      from federal, state, and local (if applicable) personal income taxes in
      New York or California

The funds are not designed for investors who:

o     are investing for aggressive long-term growth

o     require stability of principal

o     with regard to the Global Strategic Income Fund, are not prepared to
      accept a higher degree of risk than most traditional bond funds

o     with regard to the federal or state tax-exempt funds, are investing
      through a tax-deferred account such as an IRA


14 | 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 takes positions in many different areas, helping the
funds to limit exposure to concentrated sources of risk.

In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process that combines sector allocation, fundamental research for
identifying portfolio securities, and duration management.

[GRAPHIC OMITTED]
The funds invest 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 a fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.

[GRAPHIC OMITTED]

Each 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 each fund's goal
and strategy.

[GRAPHIC OMITTED]
J.P. Morgan uses a disciplined process
    to control each 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 each fund's target duration, a common
measurement of a security's sensitivity to interest rate movements. For
securities owned by a fund, duration measures the average time needed to receive
the present value of all principal and interest payments by analyzing cash flows
and interest rate movements. A fund's duration is generally shorter than a
fund's average maturity because the maturity of a security only measures the
time until final payment is due. Each fund's target duration typically remains
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the funds and make tactical
adjustments as necessary.


                                           FIXED INCOME MANAGEMENT APPROACH | 15
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o     Choose a fund (or funds) and determine the amount you are investing. The
      minimum amount for initial investments is $5,000,000 for the Short Term
      Bond, Bond, Tax Exempt Bond, New York Tax Exempt Bond and California Bond
      funds and $1,000,000 for the Global Strategic Income Fund 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-Delaware
Routing number: 031-100-238
Credit: J.P. Morgan Institutional Funds
Account number: 001-57-689
FFC: your account number, name of registered owner(s) and fund name

  By check

o     Make out a check for the investment amount payable to J.P. Morgan
      Institutional Funds.

o     Mail the check with your completed application to the Shareholder Services
      Agent.

  By exchange

o     Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o     Call the Shareholder Services Agent to place a purchase order. Funds that
      are wired without a purchase order will be returned uninvested.

o     Once you have placed your purchase order, instruct your bank to wire the
      amount of your investment as described above.

  By check

o     Make out a check for the investment amount payable to J.P. Morgan
      Institutional Funds.

o     Mail the check with a completed investment slip to the Shareholder
      Services Agent. If you do not have an investment slip, attach a note
      indicating your account number and how much you wish to invest in which
      fund(s).

  By exchange

o     Call the Shareholder Services Agent to effect an exchange.


16 | 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.

  Redemption In Kind

o     Each fund reserves the right to make redemptions of over $250,000 in
      securities rather than in cash.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders  The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges  You may exchange shares in these funds for shares in any other J.P.
Morgan 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 minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.


Business hours and NAV calculations  The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE (normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using pricing services or market quotes. When
these methods are not available or do not represent a security's value at the
time of pricing (e.g., when an event occurs after the close of trading that
would materially impact a security's value), the security is valued in
accordance with the fund's fair valuation procedures.


Timing of orders  Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares as
permitted by law and to postpone payment of proceeds for up to seven days.

- --------------------------------------------------------------------------------

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 | 17
<PAGE>

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Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), each fund reserves the right to request that you buy more shares
or close your account. If your account balance is still below the minimum 60
days after notification, each fund reserves the right to close out your account
and send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS

Income dividends are typically declared daily and paid monthly. If an investor's
shares are redeemed during the month, accrued but unpaid dividends are paid with
the redemption proceeds. Shares of a fund earn dividends on the business day the
purchase is effective, but not on the business day the redemption is effective.
Each fund distributes capital gains, if any, once a year. However, a fund may
make more or fewer payments in a given year, depending on its investment results
and its tax compliance situation. Each fund's dividends and distributions
consist of most or all of its 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 from the     Exempt from federal, state, and New York City
New York Tax Exempt Bond      personal income taxes for New York residents
Fund                          only


Income dividends from the     Exempt from federal and state personal income
California Bond Fund          taxes for California residents only

Income dividends from the     Exempt from federal personal income taxes
Tax Exempt Bond Fund

Income dividends from         Ordinary income
all other funds

Short-term capital gains      Ordinary income
distributions

Long-term capital gains       Capital gains
distributions

Sales or exchanges of         Capital gains or losses
shares owned for more
than one year

Sales or exchanges of         Gains are treated as ordinary income; losses are
shares owned for one year     subject to special rules
or less

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution. A portion of the Tax Exempt Bond, New York Tax Exempt Bond
and California Bond funds' returns may be subject to federal, state, or local
tax, or the alternative minimum tax. Every January, each fund issues tax
information on its distributions for the previous year. Any investor for whom a
fund does not have a valid taxpayer identification number will be subject to
backup withholding for taxes. The tax considerations described in this section
do not apply to tax-deferred accounts or other non-taxable entities. Because
each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.


18 | YOUR INVESTMENT
<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------

BUSINESS STRUCTURE

As noted earlier, each fund (except the California Bond Fund) is a series of
J.P. Morgan Institutional Funds, a Massachusetts business trust, and is a
"feeder" fund that invests in a master portfolio. (Except where indicated, this
prospectus uses the term "the fund" to mean the feeder fund and its master
portfolio taken together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-766-7722. Generally, when a master
portfolio seeks a vote, each of its feeder funds will hold a shareholder meeting
and cast its vote proportionately, as instructed by its shareholders. Fund
shareholders are entitled to one full or fractional vote for each dollar or
fraction of a dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether it should hire its own investment adviser, invest in
a different master portfolio, or take other action.

The California Bond 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.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers.

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:


  Advisory services             Percentage of the master portfolio's average net
                                assets
  Short Term Bond                        0.25%
  Bond                                   0.30%
  Global Strategic Income                0.45%
  Tax Exempt Bond                        0.30%
  New York Tax Exempt Bond               0.30%

  Administrative services       Master portfolio's and fund's pro-rata portions
  (fee shared with Funds        of 0.09% of the first $7 billion in J.P.
  Distributor, Inc.)            Morgan-advised portfolios, plus 0.04% of average
                                net assets over $7 billion

  Shareholder services          0.10% of each fund's average net assets

The California Bond Fund, subject to the expense reimbursements described
earlier in this prospectus, pays J.P. Morgan 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 of average net assets in J.P.
  Distributor, Inc.)            Morgan-advised portfolios, plus 0.04% of average
                                assets over $7 billion

  Shareholder services          0.10% of the fund's average net assets

J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.



                                                               FUND DETAILS | 19
<PAGE>

RISK AND REWARD ELEMENTS

This table discusses the main elements that make up each fund's overall risk and
reward characteristics. It also outlines each fund's policies toward various
investments, including those that are designed to help certain funds manage
risk.

<TABLE>
<CAPTION>
Potential risks                      Potential rewards                     Policies to balance risk and reward
- --------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                   <C>
Market conditions

o Each fund's share price,           o Bonds have generally                o Under normal circumstances
  yield, and total return will         outperformed money market             the funds plan to remain
  fluctuate in response to             investments over the long             fully invested in bonds and
  bond market movements                term, with less risk than             other fixed income
                                       stocks                                securities as noted in the
o The value of most bonds will                                               table on pages 22-23
  fall when interest rates           o Most bonds will rise in
  rise; the longer a bond's            value when interest rates           o The funds seek to limit risk
  maturity and the lower its           fall                                  and enhance total return or
  credit quality, the more its                                               yields through careful
  value typically falls              o Mortgage-backed and                   management, sector
                                       asset-backed securities can           allocation, individual
o Adverse market conditions            offer attractive returns              securities selection, and
  may from time to time cause                                                duration management
  a fund to take temporary
  defensive positions that are                                             o During severe market
  inconsistent with its                                                      downturns, the funds have
  principal investment                                                       the option of investing up
  strategies and may hinder a                                                to 100% of assets in
  fund from achieving its                                                    investment-grade short-term
  investment objective                                                       securities

o Mortgage-backed and                                                      o J.P. Morgan monitors
  asset-backed securities                                                    interest rate trends, as
  (securities representing an                                                well as geographic and
  interest in, or secured by,                                                demographic information
  a pool of mortgages or other                                               related to mortgage-backed
  assets such as receivables)                                                securities and mortgage
  could generate capital                                                     prepayments
  losses or periods of low
  yields if they are paid off
  substantially earlier or
  later than anticipated

Credit quality

o The default of an issuer           o Investment-grade bonds have         o Each fund maintains its own
  would leave a fund with              a lower risk of default               policies for balancing
  unpaid interest or principal                                               credit quality against
                                     o Junk bonds offer higher               potential yields and gains
o Junk bonds (those rated              yields and higher potential           in light of its investment
  BB/Ba or lower) have a               gains                                 goals
  higher risk of default, tend
  to be less liquid, and may                                               o J.P. Morgan develops its own
  be more difficult to value                                                 ratings of unrated
                                                                             securities and makes a
                                                                             credit quality determination
                                                                             for unrated securities

Foreign investments

o A fund could lose money            o Foreign bonds, which                o Foreign bonds are a primary
  because of foreign                   represent a major portion of          investment only for the
  government actions,                  the world's fixed income              Global Strategic Income fund
  political instability, or            securities, offer attractive          and may be a significant
  lack of adequate and                 potential performance and             investment for the Short
  accurate information                 opportunities for                     Term Bond and Bond funds;
                                       diversification                       the Tax Exempt Bond, New
o Currency exchange rate                                                     York Tax Exempt Bond and
  movements could reduce gains       o Favorable exchange rate               California Bond funds are
  or create losses                     movements could generate              not permitted to invest any
                                       gains or reduce losses                assets in foreign bonds
o Currency and investment
  risks tend to be higher in         o Emerging markets can offer          o To the extent that a fund
  emerging markets                     higher returns                        invests in foreign bonds, it
                                                                             may manage the currency
                                                                             exposure of its foreign
                                                                             investments relative to its
                                                                             benchmark, and may hedge a
                                                                             portion of its foreign
                                                                             currency exposure into the
                                                                             U.S. dollar from time to
                                                                             time (see also
                                                                             "Derivatives"); these
                                                                             currency management
                                                                             techniques may not be
                                                                             available for certain
                                                                             emerging markets investments

When-issued and delayed delivery
securities

o When a fund buys securities        o A fund can take advantage of        o Each fund uses segregated
  before issue or for delayed          attractive transaction                accounts to offset leverage
  delivery, it could be                opportunities                         risk
  exposed to leverage risk if
  it does not use segregated
  accounts
</TABLE>


20 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>
Potential risks                      Potential rewards                     Policies to balance risk and reward
- --------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                   <C>

Management choices

o A fund could underperform          o A fund could outperform its         o J.P. Morgan focuses its
  its benchmark due to its             benchmark due to these same           active management on those
  sector, securities or                choices                               areas where it believes its
  duration choices                                                           commitment to research can
                                                                             most enhance returns and
                                                                             manage risks in a consistent
                                                                             way

Derivatives

o Derivatives such as futures,       o Hedges that correlate well          o The funds use derivatives,
  options, swaps and forward           with underlying positions             such as futures, options,
  foreign currency contracts           can reduce or eliminate               swaps and forward foreign
  that are used for hedging            losses at low cost                    currency contracts for
  the portfolio or specific                                                  hedging and for risk
  securities may not fully           o A fund could make money and           management (i.e., to adjust
  offset the underlying                protect against losses if             duration or yield curve
  positions(1) and this could          management's analysis proves          exposure, or to establish or
  result in losses to the fund         correct                               adjust exposure to
  that would not have                                                        particular securities,
  otherwise occurred                 o Derivatives that involve              markets, or currencies);
                                       leverage could generate               risk management may include
o Derivatives used for risk            substantial gains at low              management of a fund's
  management may not have the          cost                                  exposure relative to its
  intended effects and may                                                   benchmark; the Tax Exempt
  result in losses or missed                                                 Bond, New York Tax Exempt
  opportunities                                                              Bond and California Bond
                                                                             funds are permitted to enter
o The counterparty to a                                                      into futures and options
  derivatives contract could                                                 transactions, however, these
  default                                                                    transactions result in
                                                                             taxable gains or losses so
o Certain types of derivatives                                               it is expected that these
  involve costs to the funds                                                 funds will utilize them
  which can reduce returns                                                   infrequently; forward
                                                                             foreign currency contracts
o Derivatives that involve                                                   are not permitted to be used
  leverage could magnify                                                     by the Tax Exempt Bond, New
  losses                                                                     York Tax Exempt Bond and
                                                                             California Bond funds

                                                                           o The funds only establish
                                                                             hedges that they expect will
                                                                             be highly correlated with
                                                                             underlying positions

                                                                           o While the funds may use
                                                                             derivatives that
                                                                             incidentally involve
                                                                             leverage, they do not use
                                                                             them for the specific
                                                                             purpose of leveraging their
                                                                             portfolios

Securities lending

o When a fund lends a                o A fund may enhance income           o J.P. Morgan maintains a list
  security, there is a risk            through the investment of             of approved borrowers
  that the loaned securities           the collateral received from
  may not be returned if the           the borrower                        o The fund receives collateral
  borrower defaults                                                          equal to at least 100% of
                                                                             the current value of
o The collateral will be                                                     securities loaned
  subject to the risks of the
  securities in which it is                                                o The lending agents indemnify
  invested                                                                   a fund against borrower
                                                                             default

                                                                           o J.P. Morgan's collateral
                                                                             investment guidelines limit
                                                                             the quality and duration of
                                                                             collateral investment to
                                                                             minimize losses

                                                                           o Upon recall, the borrower
                                                                             must return the securities
                                                                             loaned within the normal
                                                                             settlement period

Illiquid holdings

o A fund could have difficulty       o These holdings may offer            o No fund may invest more than
  valuing these holdings               more attractive yields or             15% of net assets in
  precisely                            potential growth than                 illiquid holdings
                                       comparable widely traded
o A fund could be unable to            securities                          o To maintain adequate
  sell these holdings at the                                                 liquidity to meet
  time or price desired                                                      redemptions, each fund may
                                                                             hold investment-grade
                                                                             short-term securities
                                                                             (including repurchase
                                                                             agreements and reverse
                                                                             repurchase agreements) and,
                                                                             for temporary or
                                                                             extraordinary purposes, may
                                                                             borrow from banks up to
                                                                             331/3% of the value of its
                                                                             total assets

Short-term trading


o Increased trading would            o A fund could realize gains          o The funds may use short-term
  raise a fund's transaction           in a short period of time             trading to take advantage of
  costs                                                                      attractive or unexpected
                                     o A fund could protect against          opportunities or to meet
o Increased short-term capital         losses if a bond is                   demands generated by
  gains distributions would            overvalued and its value              shareholder activity. The
  raise shareholders' income           later falls>                          turnover rate for each fund
  tax liability                                                              for its most recent fiscal
                                                                             year end is as follows:
                                                                             Short Term Bond (398%), Bond
                                                                             (465%), Global Strategic
                                                                             Income (318%), Tax Exempt
                                                                             Bond, for the eleven months
                                                                             ended 7/31/99 (29%), New
                                                                             York Tax Exempt Bond, for
                                                                             the four months ended
                                                                             7/31/99 (8%), and California
                                                                             Bond (40%)
</TABLE>


(1)   A futures contract is an agreement to buy or sell a set quantity of an
      underlying instrument at a future date, or to make or receive a cash
      payment based on changes in the value of a securities index. An option is
      the right to buy or sell a set quantity of an underlying instrument at a
      pre-determined price. A swap is a privately negotiated agreement to
      exchange one stream of payments for another. A forward foreign currency
      contract is an obligation to buy or sell a given currency on a future date
      and at a set price.


                                                               FUND DETAILS | 21
<PAGE>

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
INVESTMENTS
- --------------------------------------------------------------------------------
This table discusses the customary types of investments which can be held by
each fund.  In each case the principal types of risk are listed on the following
page (see below for definitions). This table reads across two pages.

|X|  Permitted (and if applicable, percentage limitation)
                percentage of total assets  - bold
                percentage of net assets    - italics
|_|  Permitted, but not typically used
+    Permitted, but no current intention of use
++   Not permitted

<TABLE>
<CAPTION>
                                                                                                                New
                                                                                                                York
                                                                      Short             Global       Tax        Tax        Cali-
                                                                      Term              Strategic    Exempt     Exempt     fornia
                                                                      Bond     Bond     Income       Bond       Bond       Bond
<S>                               <C>                                 <C>      <C>      <C>          <C>        <C>        <C>

- -------------------------------                                       -----    -----    ------       -----      -----      -----
Asset-backed securities           credit, interest rate, market,      |X|      |X|      |X|          |_|        |_|        |_|
Interests in a stream of          prepayment
payments from specific assets,
such as auto or credit card
receivables.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Bank obligations Negotiable       credit, currency, liquidity,        |X|(1)   |X|(1)   |X|          |_|        |_|        |_|
certificates of deposit, time     political                                                          Domestic   Domestic   Domestic
deposits and bankers'                                                                                Only       Only       Only
acceptances of domestic and
foreign issuers.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Commercial paper Unsecured        credit, currency, interest rate,    |X|(1)   |X|(1)   |_|          |X|        |X|        |X|
short term debt issued by         liquidity, market, political
domestic and foreign banks or
corporations. These securities
are usually discounted and are
rated by S&P or Moody's.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Convertible securities            credit, currency, interest rate,    |X|(1)   |X|(1)   |_|          ++         ++         ++
Domestic and foreign debt         liquidity, market, political,
securities that can be            valuation
converted into equity
securities at a future time
and price.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Corporate bonds Debt              credit, currency, interest rate,    |X|(1)   |X|(1)   |X|          ++         ++         ++
securities of domestic and        liquidity, market, political,
foreign industrial, utility,      valuation
banking, and other financial
institutions.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Mortgages (directly held)         credit, environmental, extension,   |X|      |X|      |X|          +          +          +
Domestic debt instrument which    interest rate, liquidity, market,
gives the lender a lien on        natural event, political,
property as security for the      prepayment, valuation
loan payment.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Mortgage-backed securities        credit, currency, extension,        |X|(1)   |X|(1)   |X|          ++         ++         ++
Domestic and foreign              interest rate, leverage, market,
securities (such as Ginnie        political, prepayment
Maes, Freddie Macs, Fannie
Maes) which represent
interests in pools of
mortgages, whereby the
principal and interest paid
every month is passed through
to the holder of the
securities.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Mortgage dollar rolls The         currency, extension, interest       |X|(1)   |X|(1)   |X|(3)       ++         ++         ++
purchase of domestic or           rate, leverage, liquidity, market,     (3)      (3)
foreign mortgage-backed           political, prepayment
securities with the promise to
purchase similar securities
upon the maturity of the
original security. Segregated
accounts are used to offset
leverage risk.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Participation interests           credit, currency, extension,        |X|(1)   |X|(1)   |X|          ++         ++         ++
Interests that represent a        interest rate, liquidity,
share of domestic or foreign      political, prepayment
bank debt or similar
securities or obligations.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Private placements Bonds or       credit, interest rate, liquidity,   |X|      |X|      |X|          |X|        |X|        |X|
other investments that are        market, valuation
sold directly to an
institutional investor.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
REITs and other real-estate       credit, interest rate, liquidity,   |X|      |X|      |X|          ++         ++         ++
related instruments Securities    market, natural event, prepayment,
of issuers that invest in real    valuation
estate or are secured by real
estate.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Repurchase agreements             credit                              |X|      |X|      |X|          |_|        |_|        |_|
Contracts whereby the fund
agrees to purchase a security
and resell it to the seller on
a particular date and at a
specific price.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Reverse repurchase agreements     credit                              |X|(3)   |X|(3)   |X|(3)       |_|(3)     |_|(3)     |_|(3)
Contracts whereby the fund
sells a security and agrees to
repurchase it from the buyer
on a particular date and at a
specific price. Considered a
form of borrowing.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Sovereign debt, Brady bonds,      credit, currency, interest rate,    |X|(1)   |X|(1)   |X|          ++         ++         ++
and debt of supranational         market, political
organizations Dollar- or
non-dollar-denominated
securities issued by foreign
governments or supranational
organizations. Brady bonds are
issued in connection with debt
restructurings.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Swaps Contractual agreement       credit, currency, interest rate,    |X|(1)   |X|(1)   |X|          |X|        ++         ++
whereby a domestic or foreign     leverage, market, political
party agrees to exchange
periodic payments with a
counterparty. Segregated
accounts are used to offset
leverage risk.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Synthetic variable rate           credit, interest rate, leverage,    ++       ++       ++           |X|        |X|        |X|
instruments Debt instruments      liquidity, market
whereby the issuer agrees to
exchange one security for
another in order to change the
maturity or quality of a
security in the fund.
- -------------------------------                                       -----    -----    ------       -----      -----      -----
Tax exempt municipal              credit, interest rate, market,      |_|      |_|      ++           |X|(2)     |X|(2)     |X|(2)
securities Securities,            natural event, political
generally issued as general
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        interest rate                       |X|      |X|      |X|          |X|        |X|        |X|
Debt 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     credit, currency, interest rate,    |X|(1)   |X|(1)   |X|          |X|        |X|        |X|
deferred payment securities       liquidity, market, political,
Domestic and foreign              valuation
securities offering 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 investments held by J.P. Morgan Institutional fixed
income funds:

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.

Currency risk The risk currency exchange rate fluctuations may reduce gains or
increase losses on foreign investments.

Environmental risk The risk that an owner or operator of real estate may be
liable for the costs associated with hazardous or toxic substances located on
the property.

Extension risk The risk a rise in interest rates will extend the life of a
mortgage-backed security to a date later than the anticipated prepayment date,
causing the value of the investment to fall.

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 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)   For each of the Short Term Bond and Bond funds, all foreign securities in
      the aggregate may not exceed 25% of such fund's assets.


(2)   At least 65% of the California Bond Fund's assets must be in California
      municipal securities, at least 65% of the New York Tax Exempt Bond Fund's
      assets must be in New York municipal securities, and at least 80% of the
      New York Tax Exempt and Tax Exempt Bond Funds' assets must be in tax
      exempt securities.


(3)   All forms of borrowing (including securities lending and reverse
      repurchase agreements) in the aggregate may not exceed 33 1/3% of the
      fund's total assets.


22 & 23 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each fund's
financial performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions). Except where noted, this information has been
audited by PricewaterhouseCoopers LLP, whose reports, along with each fund's
financial statements, are included in the respective fund's annual report, which
are available upon request.

================================================================================
J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND

<TABLE>
<CAPTION>

Per-share data                               For years ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                     1995          1996          1997           1998           1999
<S>                                                                <C>           <C>           <C>           <C>            <C>
Net asset value, beginning of year ($)                               9.60          9.83          9.85           9.84           9.96
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                         0.58          0.55          0.61           0.59           0.58
   Net realized and unrealized gain (loss) on investment ($)         0.24          0.02         (0.01)          0.12          (0.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                 0.82          0.57          0.60           0.71          (0.29)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                        (0.59)        (0.55)        (0.61)         (0.59)         (0.54)
   Net realized gain ($)                                               --            --            --             --          (0.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                             (0.59)        (0.55)        (0.61)         (0.59)         (0.58)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($)                                     9.83          9.85          9.84           9.96           9.67
- ------------------------------------------------------------------------------------------------------------------------------------


<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>           <C>           <C>           <C>            <C>
Total return (%)                                                     8.81          6.01          6.27           7.40           3.03
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands)                              18,916        17,810        27,375        232,986        354,267
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
  Net expenses (%)                                                   0.45          0.37          0.25           0.25           0.29
- ------------------------------------------------------------------------------------------------------------------------------------
  Net investment income (%)                                          6.09          5.69          6.19           5.84           5.51
- ------------------------------------------------------------------------------------------------------------------------------------
  Expenses without reimbursement (%)                                 0.67          1.37          0.96           0.62           0.51
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


24 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------
================================================================================
J.P. MORGAN INSTITUTIONAL BOND FUND

<TABLE>

<CAPTION>
Per-share data                                For years ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                   1995           1996           1997           1998           1999
<S>                                                                <C>            <C>           <C>           <C>            <C>
Net asset value, beginning of year ($)                             9.23           9.98           9.84          10.01          10.10
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                       0.63           0.61           0.65           0.64           0.57
   Net realized and unrealized gain (loss) on investment ($)       0.75          (0.11)          0.18           0.15          (0.57)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                               1.38           0.50           0.83           0.79             --
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                      (0.63)         (0.61)         (0.64)         (0.63)         (0.57)
   Net realized gain ($)                                             --          (0.03)         (0.02)         (0.07)         (0.12)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                           (0.63)         (0.64)         (0.66)         (0.70)         (0.69)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($)                                   9.98           9.84          10.01          10.10           9.41
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>            <C>          <C>            <C>
Total return (%)                                                  15.50           5.21           8.78           8.18           0.03
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ thousands)                           438,610        836,066        912,054      1,001,411      1,041,330
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                0.47           0.50           0.50           0.49           0.50
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                       6.62           6.28           6.59           6.32           5.92
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                              0.52           0.53           0.50           0.50           0.51
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

================================================================================

J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND

<TABLE>
<CAPTION>

Per-share data                                For periods ended October 31
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                       1997(1)            1998               1999
<S>                                                                                 <C>                <C>                <C>
Net asset value, beginning of period ($)                                              10.00              10.16               9.72
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                           0.46               0.75               0.62
- ------------------------------------------------------------------------------------------------------------------------------------
   Net realized and unrealized gain (loss)  on investment ($)                          0.15              (0.45)             (0.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                   0.61               0.30               0.25
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                                          (0.45)             (0.70)             (0.62)
   Net realized gain ($)                                                                 --              (0.02)                --
   Return of capital                                                                     --              (0.02)                --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                                               (0.45)             (0.74)             (0.62)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                    10.16               9.72               9.35
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%)                                                                       6.15(2)            2.91               2.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                             105,051            223,700            183,085
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
   Net expenses (%)                                                                    0.65(3)            0.65               0.65
- ------------------------------------------------------------------------------------------------------------------------------------
   Net investment income (%)                                                           7.12(3)            6.59               6.70
- ------------------------------------------------------------------------------------------------------------------------------------
   Expenses without reimbursement (%)                                                  1.18(3)            0.83               0.78
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  The fund commenced operations on 3/17/97.
(2)  Not annualized.
(3)  Annualized.


                                                               FUND DETAILS | 25
<PAGE>

- --------------------------------------------------------------------------------
================================================================================
J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND

<TABLE>
<CAPTION>

                                                                                                                          For the 11
                                                                                                                            months
Per-share data                              For periods ended                                                               ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                               8/31/94     8/31/95     8/31/96     8/31/97     8/31/98     7/31/99
<S>                                                            <C>         <C>        <C>         <C>         <C>         <C>
Net asset value, beginning of period ($)                        10.07        9.75       10.01        9.92       10.12       10.38
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                     0.48        0.49        0.48        0.48        0.47        0.41
   Net realized and unrealized gain (loss) on investment ($)    (0.32)       0.26       (0.07)       0.20        0.26       (0.30)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                             0.16        0.75        0.41        0.68        0.73        0.11
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:

   Net investment income ($)                                    (0.48)      (0.49)      (0.48)      (0.48)      (0.47)      (0.41)
   Net realized gain ($)                                           --          --       (0.02)      (0.00)(1)      --       (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                         (0.48)      (0.49)      (0.50)      (0.48)      (0.47)      (0.42)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                               9.75       10.01        9.92       10.12       10.38       10.07
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>         <C>        <C>         <C>         <C>         <C>
Total return (%)                                                 1.61        8.00        4.13        7.06        7.37        1.01(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                        16,415      59,867     121,131     201,614     316,594     388,933
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%)                                                 0.50        0.50        0.50        0.50        0.50        0.50(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (%)                                        4.70        5.09        4.82        4.83        4.58        4.37(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses without reimbursement (%)                               1.98        0.71        0.60        0.56        0.53        0.53(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1) Less than $0.01 per share.
(2) Not annualized.
(3) Annualized.


================================================================================
J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND

<TABLE>
<CAPTION>
                                                                                                                          For the
                                                                                                                         four months
Per-share data                          For fiscal periods ended                                                           ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                              3/31/95(1)   3/31/96     3/31/97     3/31/98     3/31/99    7/31/99
<S>                                                            <C>         <C>         <C>        <C>         <C>        <C>
Net asset value, beginning of period ($)                        10.00       10.11       10.34       10.31       10.67      10.72
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                     0.42        0.49        0.48        0.48        0.45       0.14
   Net realized and unrealized gain (loss) on investment ($)     0.11        0.25       (0.02)       0.40        0.13      (0.28)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                             0.53        0.74        0.46        0.88        0.58      (0.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                    (0.42)      (0.49)      (0.48)      (0.48)      (0.45)     (0.14)
   Net realized gain ($)                                           --       (0.02)      (0.01)      (0.04)      (0.08)     (0.02)
- ------------------------------------------------------------------------------------------------------------------------------------
  Total distributions to shareholders ($)                       (0.42)      (0.51)      (0.49)      (0.52)      (0.53)     (0.16)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                              10.11       10.34       10.31       10.67       10.72      10.42
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>         <C>         <C>        <C>         <C>        <C>
Total return (%)                                                 5.49(2)     7.40        4.54        8.64        5.51      (1.25)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                        20,621      47,926      90,792     111,418     204,986    161,373
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Net expenses (%)                                                 0.50(3)     0.50        0.50        0.50        0.50       0.50(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (%)                                        4.65(3)     4.67        4.70        4.54        4.15       4.01(3)
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses without reimbursement (%)                               1.05(3)     0.67        0.64        0.59        0.57       0.59(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The fund commenced operations on 4/11/94.
(2) Not annualized.
(3) Annualized.


26 | FUND DETAILS
<PAGE>


- --------------------------------------------------------------------------------
================================================================================
J.P. MORGAN CALIFORNIA BOND FUND - INSTITUTIONAL SHARES


<TABLE>
<CAPTION>

                                                                                                                   For the six
                                                                                                                  months ended
Per-share date                          For fiscal periods ended                                                     ended
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                   4/30/97(1)       4/30/98         4/30/99        10/31/99
                                                                                                                  (unaudited)
<S>                                                                 <C>             <C>             <C>             <C>
Net asset value, beginning of period ($)                             10.00            9.90           10.20           10.40
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                          0.16            0.42            0.41            0.20
   Net realized and unrealized gain (loss) on investment ($)         (0.10)           0.30            0.25           (0.38)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                  0.06            0.72            0.66           (0.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
   Net investment income ($)                                         (0.16)          (0.42)          (0.41)          (0.20)
   Net realized gain ($)                                                --              --           (0.05)             --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ($)                              (0.16)          (0.42)          (0.46)          (0.20)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                    9.90           10.20           10.40           10.02
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>             <C>             <C>
Total return (%)                                                      0.56(2)         7.35            6.55           (1.73)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                             14,793          46,280          64,102          58,055
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
  Net expenses (%)                                                    0.45(3)         0.45            0.49            0.50(3)
- ------------------------------------------------------------------------------------------------------------------------------------
  Net investment income (%)                                           4.43(3)         4.11            3.92            3.93(3)
- ------------------------------------------------------------------------------------------------------------------------------------
  Expenses without reimbursement (%)                                  3.46(3)         0.79            0.71            0.68(3)
- ------------------------------------------------------------------------------------------------------------------------------------
  Portfolio turnover (%)                                                40              44              40            0.54
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1) The fund commenced operations on 12/23/96.
(2) Not annualized.
(3) Annualized.


                                                               FUND DETAILS | 27
<PAGE>

- --------------------------------------------------------------------------------

                    (THIS PAGE IS INTENTIONALLY LEFT BLANK)


<PAGE>

- --------------------------------------------------------------------------------

                    (THIS PAGE IS INTENTIONALLY LEFT BLANK)


<PAGE>

funds. The fund may engage in active and frequent trading, leading to increased
portfolio turnover and the possibility of increased capital gains. See page 18
for further discussion on the tax treatment of capital gains.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.>

<PAGE>

- --------------------------------------------------------------------------------
FOR MORE INFORMATION
- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:

J.P. Morgan Institutional Funds
J.P. Morgan Funds Services
522 Fifth Avenue New
York, NY 10036

Telephone:  1-800-766-7722

Hearing impaired:  1-888-468-4015

Email:  J[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
funds' investment company and 1933 Act registration numbers are:

J.P. Morgan Institutional Short Term Bond Fund .................. 811-07342 and
                                                                      033-54642

J.P. Morgan Institutional Bond Fund ............................. 811-07342 and
                                                                      033-54642

J.P. Morgan Institutional Global Strategic Income Fund .......... 811-07342 and
                                                                      033-54642

J.P. Morgan Institutional Tax Exempt Bond Fund .................. 811-07342 and
                                                                      033-54642

J.P. Morgan Institutional New York Tax Exempt Bond Fund ......... 811-07342 and
                                                                      033-54642

J.P. Morgan Institutional California Bond Fund .................. 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.

JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds              |

Advisor                                      Distributor
J.P. Morgan Investment Management Inc.       Funds Distributor, Inc.
522 Fifth Avenue                             60 State Street
New York, NY 10036                           Boston, MA 02109
1-800-766-7722                               1-800-221-7930


<PAGE>



- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | Prospectus
- --------------------------------------------------------------------------------
J.P. MORGAN TAX AWARE ENHANCED INCOME FUND


                                       -----------------------------------------
                                       Seeking high current after tax income
                                       consistent with principal preservation by
                                       investing in tax exempt and taxable 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 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>

- --------------------------------------------------------------------------------

<PAGE>


CONTENTS
- --------------------------------------------------------------------------------
2 | The fund's goal, principal strategies, principal risks, performance and
    expenses


J.P. MORGAN TAX AWARE ENHANCED INCOME FUND
Fund description ............................................................  2
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 Tax Aware Enhanced Income 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
TAX AWARE ENHANCED INCOME FUND                           |  TICKER SYMBOL: JPTEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY


For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 10-13.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high current after tax income consistent with
principal preservation. This goal can be changed without shareholder approval.


[GRAPHIC OMITTED]
INVESTMENT APPROACH


Principal Strategies
The fund invests in municipal securities that J.P. Morgan believes have the
potential to provide high current income that is free from federal income tax.
The fund also may invest in taxable fixed income securities, including U.S.
government and agency securities, domestic and foreign corporate bonds,
asset-backed and mortgage-related securities, and money market instruments, that
J.P. Morgan believes have the potential to provide higher current after tax
income. These securities may be of any maturity, but under normal market
conditions the fund's duration will range between three and eighteen months. The
fund's tax aware investment strategies are described on page 4. For a
description of duration, please see fixed income investment process on page 5.

Up to 25% of the fund's assets may be invested in foreign securities. All of the
securities purchased by the fund, at the time of purchase, must be rated
investment grade (BBB/Baa or better) by a nationally recognized statistical
rating organization or the unrated equivalent, including at least 75% in
securities rated A or better.


Principal Risks
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.


Although any rise in interest rates is likely to cause a fall in the price of
fixed income securities, the fund's comparatively short duration is designed to
help keep its share price within a relatively narrow range. Because it seeks to
minimize risk, the fund will generally offer less income and, during periods of
declining interest rates, may offer lower total returns than funds with longer
durations. Because of the sensitivity of the fund's mortgage related securities
to changes in interest rates, the performance and duration of the fund may be
more volatile than if it did not hold these securities. The fund may use
interest rate swaps, futures contracts and options to help manage duration. The
fund's tax aware strategies may reduce your taxable income but will not
eliminate it. Maximizing after tax income may require trade-offs that reduce
pre-tax income. To the extent the fund invests in foreign securities, it could
lose money because of foreign government actions, political instability,
currency fluctuations or lack of adequate and accurate information.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN TAX AWARE ENHANCED INCOME FUND: SELECT SHARES)

PORTFOLIO MANAGEMENT


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $3.5 billion using similar
strategies as the fund.

The portfolio management team is led by Richard W. Oswald, vice president, who
joined J.P. Morgan from CBS Inc. in 1996 where he served as treasurer, and,
Benjamin Thompson, vice president, who joined the team in 1996. Prior to joining
J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at Goldman
Sachs.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


2 | J.P. MORGAN TAX AWARE ENHANCED INCOME FUND
<PAGE>


- --------------------------------------------------------------------------------
INVESTOR EXPENSES
The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(1) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.25
Marketing (12b-1) fees                                                      none
Other expenses(2)                                                           0.47
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.72

Fee waiver and
expense reimbursement(2)                                                    0.22
- --------------------------------------------------------------------------------
Net expenses(2)                                                             0.50
- --------------------------------------------------------------------------------

Expense example(2)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                  1 yr.          3 yrs.
Your cost($)       51             208
- --------------------------------------------------------------------------------

(1) This table shows the fund's expenses for the past fiscal year, expressed
    as a percentage of the fund's average net assets.

(2) Reflects an agreement dated 3/1/00 by Morgan guaranty Trust Company of New
    York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
    expenses (excluding extraordinary expenses) exceed 0.50% of the fund's
    average daily net assets through 2/28/01.



                                  J.P. MORGAN TAX AWARE ENHANCED INCOME 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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN TAX AWARE ENHANCED INCOME FUND

The fund is designed to provide a high level of after tax current income, price
stability and liquidity. The fund's strategy may therefore include purchasing
both municipal obligations that are exempt from federal income tax as well as
taxable securities, depending on which opportunity J.P. Morgan determines will
generate the highest after tax income (although the fund intends to invest at
least 50% of its assets in tax exempt securities). It seeks to capitalize on
fundamental and technical opportunities in the different markets to enhance
return.

- --------------------------------------------------------------------------------
Who may want to invest The fund is designed for investors who:

o are in a high tax bracket and want to add a tax sensitive 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 longer duration bond
  funds

o want to emphasize after tax return

The fund is not designed for investors who:

o are investing for aggressive long-term growth

o are investing through a tax-deferred account such as an IRA

o are in a low tax bracket


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 takes positions in many different areas, 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 OMITTED]
 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 OMITTED]
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 OMITTED]
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 common
measurement of a security's sensitivity to interest rate movements. For
securities owned by the fund, duration measures the average time needed to
receive the present value of all principal and interest payments by analyzing
cash flows and interest rate movements. The fund's duration may be shorter than
the fund's average maturity because the maturity of a security only measures the
time until final payment is due. The fund's target duration typically remains
relatively short, between three and eighteen months. 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 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 $2,500 and for additional investments $500, although these
  minimums may be less for some investors. For more information on minimum
  investments, call 1-800-521-5411.

o Complete the application, indicating how much of your investment you want
  to allocate to which fund(s). Please apply now for any account privileges
  you may want to use in the future, in order to avoid the delays associated
  with adding them later on.

o Mail in your application, making your initial investment as shown at
  right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

OPENING YOUR ACCOUNT

  By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place a
  purchase order. Funds that are wired without a purchase order will be returned
  uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
  your investment to:

  State Street Bank & Trust Company
  Routing number: 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

o Make out a check for the investment amount payable to J.P. Morgan Funds.

o Mail the check with your completed application to the 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 Funds.

o Mail the check with a completed investment slip to the Transfer Agent. If you
  do not have an investment slip, attach a note indicating your account number
  and how much you wish to invest in which fund(s).

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

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.

  Redemption in kind

o The Fund reserves the right to make redemptions of over $250,000 in securities
  rather than in cash.

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. When these methods are
not available or do not represent a security's value at the time of pricing
(e.g. when an event occurs after the close of trading that would materially
impact a security's value), the security is valued in accordance with the fund's
fair valuation procedures.


Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. The fund has the right to suspend redemption of shares as
permitted by law and to postpone payment of proceeds for up to seven days.


- --------------------------------------------------------------------------------

Transfer Agent
State Street Bank and Trust Company
P.O. Box 8411
Boston, MA 02266-8411
Attention; J.P. Morgan Funds Services

Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
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 may 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:

- --------------------------------------------------------------------------------
Transaction               |   Tax status
- --------------------------------------------------------------------------------
Income dividends on           Generally tax exempt
municipal obligations
- --------------------------------------------------------------------------------
Income dividends on           Ordinary income
taxable securities
- --------------------------------------------------------------------------------
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.

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.

- --------------------------------------------------------------------------------
Advisory services             0.25% of the fund's average net
                              assets
- --------------------------------------------------------------------------------
Administrative services       Fund's prorata portion of
(fee shared with Funds        0.09% of the first $7 billion
Distributor, Inc.)            of average net assets in
                              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.

PERFORMANCE OF PRIVATE ACCOUNTS


The fund's investment objective and policies are substantially similar to those
used by J.P. Morgan in managing certain discretionary investment management
accounts. The chart below shows the historical investment performance for a
composite of these private accounts (the "Tax Aware Composite") and for the
fund's benchmark index.

The performance of the Tax Aware Composite does not represent the fund's
performance nor should it be interpreted as indicative of the fund's future
performance. The accounts in the Tax Aware Composite are not subject to the same
regulatory requirements and limitations imposed on mutual funds. If the accounts
included in the Tax Aware Composite had been subject to these regulatory
requirements and limitations, their performance might have been lower.
Additionally, although it is anticipated that the fund and the Tax Aware
Composite will hold similar securities, their investment results are expected to
differ. In particular, difference in asset size and cash flow resulting from
purchases and redemptions of fund shares may result in different securities
selections, differences in the relative weightings of securities or differences
in the prices paid for particular fund holdings.

The performance of the Tax Aware Composite reflects the deductions of the fund's
total operating expenses, after expense reimbursement, and the reinvestment of
dividends and other distributions. The taxable-equivalent return is a measure of
what a fully taxable fund would have to return in order to generate equivalent
after-tax return using a 39.6% income tax rate. The performance information is
the average annual total return of the Tax Aware Composite for the periods
indicated.

          Average Annual Total Returns for the Year Ended December 31,
- --------------------------------------------------------------------------------
                                                                     1998   1999
Tax Aware Composite                                                  3.88   2.72
- --------------------------------------------------------------------------------
Tax Aware Private Account Composite - Taxable-Equivalent @ 39.6%     6.02   5.07
- --------------------------------------------------------------------------------
Merrill Lynch 3-month U.S. Treasury Bill Index (no expenses)         5.23   4.85
- --------------------------------------------------------------------------------

The fund's total return since commencement of operations(1) through 12/31/99 was
2.11%. The fund's tax equivalent total return @ 39.6% since commencement of
operations1 through 12/31/99 was 3.45%.


The Tax Aware Composite currently includes all discretionary accounts managed by
J.P. Morgan using substantially similar investment strategy as the fund. The
inception date for the Tax Aware Composite was July 1, 1996.

(1) The fund commenced operations on 5/6/99. For the period 4/30/99 through
    5/30/99 returns reflect the performance of J.P. Morgan Institutional Tax
    Aware Enhanced Income Fund (a separate class of shares). Performance during
    this period reflects operating expenses which are 0.25% of net assets lower
    than those of the fund. Accordingly, performance for the fund would have
    been lower if an investment had been made in the fund during the same time
    period.


                                                                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. It also outlines the fund's policies toward various
investments, including those that are designed to help the fund manage risk.

<TABLE>
<CAPTION>
==========================================================================================
Potential risks               Potential rewards       Policies to balance risk and reward
- ------------------------------------------------------------------------------------------

Market conditions
<S>                           <C>                     <C>
o The fund's share            o Bonds have generally  o Under normal circumstances the
  price, yield, and             outperformed money      fund plans to remain fully
  total return will             market investments      invested in bonds and other fixed
  fluctuate in                  over the long term,     income securities as noted in the
  response to bond              with less risk than     table on pages 12-13
  market movements              stocks
                                                      o The fund seeks to limit risk and
o The value of most           o Most bonds will rise    enhance after tax yields through
  bonds will fall when          in value when           careful management, sector
  interest rates rise;          interest rates fall     allocation, individual securities
  the longer a bond's                                   selection, and duration management
  maturity and the            o Mortgage-backed and
  lower its credit              asset-backed          o During severe market downturns,
  quality, the more             securities can offer    the fund has the option of
  its value typically           attractive returns      investing up to 100% of assets in
  falls                                                 investment-grade short-term
                                                        securities
o Adverse market
  conditions may from                                 o J.P. Morgan monitors interest rate
  time to time cause                                    trends, as well as geographic and
  the fund to take                                      demographic information related to
  temporary defensive                                   mortgage-backed securities and
  positions that are                                    mortgage prepayments
  inconsistent with
  its principal
  investment
  strategies and may
  hinder the fund from
  achieving its
  investment objective

o Mortgage-backed and
  asset-backed
  securities
  (securities
  representing an
  interest in, or
  secured by, a pool
  of mortgages or
  other 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

o The fund could              o The fund could        o J.P. Morgan focuses its active
  underperform its              outperform its          management on those areas where it
  benchmark due to its          benchmark due to        believes its commitment to
  sector, securities,           these same choices      research can most enhance after
  or duration choices                                   tax income and manage risks in a
                              o An optimal              consistent way
o The fund could                allocation could
  generate lower after          enhance after tax
  tax income if its             income
  taxable/tax exempt
  allocation is not
  optimal
- ------------------------------------------------------------------------------------------

CREDIT QUALITY

o The default of an           o Investment-grade      o The fund maintains its own
  issuer would leave            bonds have a lower      policies for balancing credit
  the fund with unpaid          risk of default         quality against potential yields
  interest or                                           and gains in light of its
  principal                                             investment goals

                                                      o J.P. Morgan develops its own
                                                        ratings of unrated securities and
                                                        makes a credit quality
                                                        determination for unrated
                                                        securities
- ------------------------------------------------------------------------------------------

SHORT-TERM TRADING


o Increased trading           o The fund could        o The fund generally avoids
  would raise the               realize gains in a      short-term trading, except to take
  fund's transaction            short period of time    advantage of attractive or
  costs                                                 unexpected opportunities or to
                              o The fund could          meet demands generated by
o Increased short-term          protect against         shareholder activity
  capital gains                 losses if a bond is
  distributions would           overvalued and its
  raise shareholders'           value later falls
  income tax liability
- ------------------------------------------------------------------------------------------
</TABLE>



10 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
==========================================================================================
Potential risks               Potential rewards       Policies to balance risk and reward
- ------------------------------------------------------------------------------------------

Foreign investments
<S>                           <C>                     <C>

o The fund could lose         o Foreign bonds, which  o Foreign bonds may be a significant
  money because of              represent a major      investment (25% of assets) for the
  foreign government            portion of the         fund
  actions, political            world's fixed income
  instability, or lack          securities, offer     o To the extent that the fund
  of adequate and               attractive potential   invests in foreign bonds, it will
  accurate information          performance and        hedge its currency exposure into
                                opportunities for      the U.S. dollar (see also
o Currency exchange             diversification        "Derivatives")
  rate movements could
  reduce gains or             o Favorable exchange
  create losses                 rate movements could
                                generate gains or
                                reduce losses
- ------------------------------------------------------------------------------------------

Derivatives

o Derivatives such as         o Hedges that           o The fund uses derivatives such as
  futures, options,             correlate well with    futures, options, swaps and forward
  swaps and forward             underlying positions   foreign currency contracts for
  foreign currency              can reduce or          hedging and for risk management
  contracts that are            eliminate losses at    (i.e., to adjust duration or to
  used for hedging the          low cost               establish or adjust exposure to
  portfolio or                                         particular securities, markets, or
  specific securities         o The fund could make    currencies)
  may not fully offset          money and protect
  the underlying                against losses if     o The fund only establishes hedges
  positions1 and this           management's           that it expects will be highly
  could result in               analysis proves        correlated with underlying
  losses to the fund            correct                positions
  that would not have
  otherwise occurred          o Derivatives that      o While the fund may use derivatives
                                involve leverage       that incidentally involve leverage,
o Derivatives used for          could generate         it does not use them for the
  risk management may           substantial gains at   specific purpose of leveraging the
  not have the                  low cost               portfolio
  intended effects and
  may result in losses
  or missed
  opportunities

o The counterparty to
  a derivatives
  contract could
  default

o Certain types of
  derivatives involve
  costs to the fund
  which can reduce
  returns lDerivatives
  that involve
  leverage could
  magnify losses
- ------------------------------------------------------------------------------------------

Securities lending

o When a fund lends a         o A fund may enhance    o J.P. Morgan maintains a list of
  security, there is a          income through the     approved borrowers
  risk that the loaned          investment of the
  securities may not            collateral received   o The fund receives collateral equal
  be returned if the            from the borrower      to at least 100% of the current
  borrower defaults                                    value of securities loaned

o The collateral will                                 o The lending agents indemnify a
  be subject to the                                    fund against borrower default
  risks of the
  securities in which                                 o J.P. Morgan's collateral
  it is invested                                       investment guidelines limit the
                                                       quality and duration of collateral
                                                       investment to minimize losses

                                                      o Upon recall, the borrower must
                                                       return the securities loaned within
                                                       the normal settlement period
- ------------------------------------------------------------------------------------------
Illiquid holdings

o The fund could have         o These holdings may    o The fund may not invest more than
  difficulty valuing            offer more             15% of net assets in illiquid
  these holdings                attractive yields or   holdings
  precisely lThe fund           potential growth
  could be unable to            than comparable       o To maintain adequate liquidity to
  sell these holdings           widely traded          meet redemptions, the fund may hold
  at the time or price          securities             investment-grade short-term
  desired                                              securities (including repurchase
                                                       agreements) and, for temporary or
                                                       extraordinary purposes, may borrow
                                                       from banks up to 331/3% of the
                                                       value of its total assets
- ------------------------------------------------------------------------------------------

When-issued and
delayed delivery securities

o When the fund buys          o The fund can take     o The fund uses segregated accounts
  securities before             advantage of           to offset leverage risk
  issue or for delayed          attractive
  delivery, it could            transaction
  be exposed to                 opportunities
  leverage risk if it
  does not use
  segregated accounts
- ------------------------------------------------------------------------------------------
</TABLE>

(1) A futures contract is an agreement to buy or sell a set quantity of an
    underlying instrument at a future date, or to make or receive a cash payment
    based on the value of a securities index. An option is the right to buy or
    sell a set quantity of an underlying instrument at a predetermined price. A
    swap is a privately negotiated agreement to exchange one stream of payments
    for another. A forward foreign currency contract is an obligation to buy or
    sell a given currency on a future date and at a set price.


                                                               FUND DETAILS | 11
<PAGE>

- --------------------------------------------------------------------------------

Investments

This table discusses the customary types of investments which can be held by the
fund. In each case the principal types of risk are listed on the following page
(see below for definitions).This table reads across two pages.

- --------------------------------------------------------------------------------
Asset-backed securities Interests in a stream of payments from specific assets,
such as auto or credit card receivables.
- --------------------------------------------------------------------------------
Bank obligations Negotiable certificates of deposit, time deposits and bankers'
acceptances of domestic and foreign issuers.
- --------------------------------------------------------------------------------
Commercial paper Unsecured short term debt issued by domestic and foreign banks
or corporations. These securities are usually discounted and are rated by S&P or
Moody's.
- --------------------------------------------------------------------------------
Convertible securities Domestic and foreign debt securities that can be
converted into equity securities at a future time and price.
- --------------------------------------------------------------------------------
Corporate bonds Debt securities of domestic and foreign industrial, utility,
banking, and other financial institutions.
- --------------------------------------------------------------------------------
Mortgages (directly held) Domestic debt instrument which gives the lender a lien
on property as security for the loan payment.
- --------------------------------------------------------------------------------
Mortgage-backed securities Domestic and foreign securities (such as Ginnie Maes,
Freddie Macs, Fannie Maes) which represent interests in pools of mortgages,
whereby the principal and interest paid every month is passed through to the
holder of the securities.
- --------------------------------------------------------------------------------
Mortgage dollar rolls The sale of domestic and foreign mortgage-backed
securities with the promise to purchase similar securities at a later date.
Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Participation interests Interests that represent a share of bank debt or similar
securities or obligations.
- --------------------------------------------------------------------------------
Private placements Bonds or other investments that are sold directly to an
institutional investor.
- --------------------------------------------------------------------------------
REITs and other real-estate related instruments Securities of issuers that
invest in real estate or are secured by real estate.
- --------------------------------------------------------------------------------
Repurchase agreements Contracts whereby the fund agrees to purchase a security
and resell it to to the seller on a particular date and at a specific price.
- --------------------------------------------------------------------------------
Reverse repurchase agreements Contracts whereby the fund sells a security and
agrees to repurchase it from the buyer on a particular date and at a specific
price. Considered a form of borrowing.
- --------------------------------------------------------------------------------
Sovereign debt, Brady bonds, and debt of supranational organizations Dollar- or
non-dollar-denominated securities issued by foreign governments or supranational
organizations. Brady bonds are issued in connection with debt restructurings.
- --------------------------------------------------------------------------------
Swaps Contractual agreement whereby a party agrees to exchange periodic payments
with a counterparty. Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Tax exempt municipal securities Securities, generally issued as general
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 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 payment securities Domestic and foreign
securities offering 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.
- --------------------------------------------------------------------------------

Risk related to certain investments held by J.P. Morgan fixed income funds:

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.

Currency risk The risk currency exchange rate fluctuations may reduce gains or
increase losses on foreign investments.

Environmental risk The risk that an owner or operator of real estate may be
liable for the costs associated with hazardous or toxic substances located on
the property.

Extension risk The risk a rise in interest rates will extend the life of a
mortgage-backed security to a date later than the anticipated prepayment date,
causing the value of the investment to fall.

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.


12 | FUND DETAILS
<PAGE>

================================================================================

      o Permitted - bold

      O Permitted, but not typically used

              Principal Types of Risk

- --------------------------------------------------------------------------------
      credit, interest rate, market, prepayment                          o
- --------------------------------------------------------------------------------
      credit, currency, liquidity, political                             o(1)
- --------------------------------------------------------------------------------
      credit, currency, interest rate, liquidity, market, political      o(1)
- --------------------------------------------------------------------------------
      credit, currency, interest rate, liquidity, market, political,     o(1)
      valuation
- --------------------------------------------------------------------------------
      credit, currency, interest rate, liquidity, market, political,     o(1)
      valuation
- --------------------------------------------------------------------------------
      credit, environmental, extension, interest rate, liquidity,        O
      market, natural event, political, prepayment, valuation
- --------------------------------------------------------------------------------
      credit, currency, extension, interest rate, leverage, market,      o(1)
      political, prepayment
- --------------------------------------------------------------------------------
      credit, currency, extension, interest rate, leverage, liquidity,   O(1)
      market, political, prepayment
- --------------------------------------------------------------------------------
      credit, currency, extension, interest rate, liquidity,             o
      political, prepayment
- --------------------------------------------------------------------------------
      credit, interest rate, liquidity, market, valuation                o
- --------------------------------------------------------------------------------
      credit, environmental, interest rate, liquidity, market, natural   o
      event, prepayment, valuation
- --------------------------------------------------------------------------------
      credit                                                             o
- --------------------------------------------------------------------------------
      credit                                                             O(2)
- --------------------------------------------------------------------------------
      credit, currency, interest rate, market, political                 o(1)
- --------------------------------------------------------------------------------
      credit, currency, interest rate, leverage, market, political       o
- --------------------------------------------------------------------------------
      credit, interest rate, market, natural event, political            o
- --------------------------------------------------------------------------------
      interest rate                                                      o
- --------------------------------------------------------------------------------
      credit, currency, interest rate, liquidity, market, political,     o(1)
      valuation
- --------------------------------------------------------------------------------

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 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) All foreign securities in the aggregate may not exceed 25% of the fund's
    assets.

(2) All forms of borrowing (including securities lending, mortgage dollar rolls
    and reverse repurchase agreements) are limited in the aggregate and may not
    exceed 331/3% of the fund's total assets.


                                                               FUND DETAILS | 13
<PAGE>

- --------------------------------------------------------------------------------


FINANCIAL HIGHLIGHTS

The financial table is intended to help you understand the fund's financial
performance for the past fiscal period. 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 fund's annual report, which is
available upon request.

J.P. MORGAN TAX AWARE ENHANCED INCOME FUND

- ----------------------------------------------
Per-share data                                For fiscal period ended October 31
- --------------------------------------------------------------------------------

                                                                       1999(1,2)

Net asset value, beginning of period ($)                                 2.00
- --------------------------------------------------------------------------------
Income from investment operations:
  Net investment income ($)                                              0.04
- --------------------------------------------------------------------------------
  Net realized and unrealized gain (loss)
  on investment ($)                                                     (0.01)
Total from investment operations ($)                                     0.03
- --------------------------------------------------------------------------------
Less distributions to shareholders from:
  Net investment income                                                 (0.04)
- --------------------------------------------------------------------------------
Net asset value, end of period ($)                                       1.99
- --------------------------------------------------------------------------------

- ----------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------

Total return (%)                                                         1.29(3)
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                27,723
- --------------------------------------------------------------------------------
Ratios to average net assets:
  Net expenses (%)                                                       0.50(4)
- --------------------------------------------------------------------------------
  Net investment income (%)                                              3.75(4)
- --------------------------------------------------------------------------------
  Expenses without reimbursement (%)                                     0.72(4)
- --------------------------------------------------------------------------------
  Portfolio turnover (%)                                                   69(3)
- --------------------------------------------------------------------------------
(1) The fund commenced operations on 5/6/99.

(2) The figures have been adjusted to reflect a stock split that occurred on
    7/27/99 (7.51256281 to 1).

(3) Not annualized.

(4) Annualized.








14 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)

<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 Tax Aware Enhanced Income 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
333-11125.

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


<PAGE>


- --------------------------------------------------------------------------------
                                                      MARCH 1, 2000 | PROSPECTUS
- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL
TAX AWARE ENHANCED INCOME FUND


                                       -----------------------------------------
                                       Seeking high current after tax income
                                       consistent with principal preservation by
                                       investing in tax exempt and taxable 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 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>
- --------------------------------------------------------------------------------
<PAGE>

CONTENTS
- --------------------------------------------------------------------------------


2 | The fund's goal, principal strategies, principal risks, performance and
    expenses


J.P. MORGAN INSTITUTIONAL TAX AWARE ENHANCED INCOME FUND
Fund description.............................................................  2
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 Institutional Tax Aware Enhanced Income 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


                                                                             | 1
<PAGE>


J.P. MORGAN INSTITUTIONAL
TAX AWARE ENHANCED INCOME FUND                            | TICKER SYMBOL: JPAEX
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
RISK/RETURN SUMMARY


For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 10-13.

[GRAPHIC OMITTED]
GOAL

The fund's goal is to provide high current after tax current income consistent
with principal preservation. This goal can be changed without shareholder
approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH

Principal Strategies
The fund invests in municipal securities that J.P. Morgan believes have the
potential to provide high current income that is free from federal income tax.
The fund also may invest in taxable fixed income securities, including U.S.
government and agency securities, domestic and foreign corporate bonds,
asset-backed and mortgage-related securities, and money market instruments, that
J.P. Morgan believes have the potential to provide higher current after tax
income. These securities may be of any maturity, but under normal market
conditions the fund's duration will range between three and eighteen months. The
fund's tax aware investment strategies are described on page 4. For a
description of duration, please see Fixed Income Investment Process on page 5.

Up to 25% of the fund's assets may be invested in foreign securities. All of the
securities purchased by the fund, at the time of purchase, must be rated
investment grade (BBB/Baa or better) by a nationally recognized statistical
rating organization or the unrated equivalent, including at least 75% in
securities rated A or better.

Principal Risks
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.

Although any rise in interest rates is likely to cause a fall in the price of
fixed income securities, the fund's comparatively short duration is designed to
help keep its share price within a relatively narrow range. Because it seeks to
minimize risk, the fund will generally offer less income and, during periods of
declining interest rates, may offer lower total returns than funds with longer
durations. Because of the sensitivity of the fund's mortgage related securities
to changes in interest rates, the performance and duration of the fund may be
more volatile than if it did not hold these securities. The fund may use
interest rate swaps, futures contracts and options to help manage duration. The
fund's tax aware strategies may reduce your taxable income but will not
eliminate it. Maximizing after tax income may require trade-offs that reduce
pre-tax income. To the extent the fund invests in foreign securities, it could
lose money because of foreign government actions, political instability,
currency fluctuations or lack of adequate and accurate information.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the fund's share price is lower
than when you invested.

REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN TAX AWARE ENHANCED INCOME FUND:
INSTITUTIONAL SHARES)


PORTFOLIO MANAGEMENT
The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $3.5 billion using similar
strategies as the fund.

The portfolio management team is led by Richard W. Oswald, vice president, who
joined J.P. Morgan from CBS Inc. in 1996 where he served as treasurer, and
Benjamin Thompson, vice president, who joined the team in June of 1999. Prior to
joining J.P. Morgan, Mr. Thompson was a senior fixed income portfolio manager at
Goldman Sachs.


- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

  o There is no assurance that the fund will meet its investment goal.

  o The fund does not represent a complete investment program.

2 | J.P. MORGAN INSTITUTIONAL TAX AWARE ENHANCED INCOME FUND
<PAGE>

- --------------------------------------------------------------------------------
INVESTOR EXPENSES


The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(1) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             0.25
Marketing (12b-1) fees                                                      none
Other expenses(2)                                                           0.32
- --------------------------------------------------------------------------------
Total operating expenses                                                    0.57

Fee waiver and
expense reimbursement(2)                                                    0.32
- --------------------------------------------------------------------------------
Net expenses(2)                                                             0.25
- --------------------------------------------------------------------------------

Expense example(2)
- --------------------------------------------------------------------------------
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                                 1 yr.        3 yrs.
Your cost($)                      26           150
- --------------------------------------------------------------------------------


(1) This table shows the fund's expenses for the past fiscal year, expressed as
    a percentage of the fund's average net assets.


(2) Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
    York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
    expenses (excluding extraordinary expenses) exceed 0.25% of the fund's
    average daily net assets through 2/28/01.


                    J.P. MORGAN INSTITUTIONAL TAX AWARE ENHANCED INCOME 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 380 analysts and portfolio managers
around the world and has approximately $349 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management Inc.


J.P. MORGAN INSTITUTIONAL TAX AWARE ENHANCED INCOME FUND
The fund is designed to provide a high level of after tax current income, price
stability and liquidity. The fund's strategy may therefore include purchasing
both municipal obligations that are exempt from federal income tax as well as
taxable securities, depending on which opportunity J.P. Morgan determines will
generate the highest after tax income (although the fund intends to invest at
least 50% of its assets in tax exempt securities). It seeks to capitalize on
fundamental and technical opportunities in the different markets to enhance
return.

- --------------------------------------------------------------------------------
Who may want to invest

The fund is designed for investors who:

o are in a high tax bracket and want to add a tax sensitive 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 longer duration bond funds

o want to emphasize after tax return

The fund is not designed for investors who:

o are investing for aggressive long-term growth

o are investing through a tax-deferred account such as an IRA

o are in a low tax bracket

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 takes positions in many different areas, 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 OMITTED]
The fund invests across a range
of different types of securities

Sector allocation The sector allocation team meets regularly, 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 OMITTED]
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 OMITTED]
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 common
measurement of a security's sensitivity to interest rate movements. For
securities owned by the fund, duration measures the average time needed to
receive the present value of all principal and interest payments by analyzing
cash flows and interest rate movements. The fund's duration may be shorter than
the fund's average maturity because the maturity of a security only measures the
time until final payment is due. The fund's target duration typically remains
relatively short, between three and eighteen months. 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-Delaware
  Routing number: 031-100-238
  Credit: J.P. Morgan Institutional Funds
  Account number: 001-57-689
  FFC: your account number, name of registered owner(s) and fund name

  By check

o Make out a check for the investment amount payable to J.P. Morgan
  Institutional Funds.

o Mail the check with your completed application to the Shareholder Services
  Agent.

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

  By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
  wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
  amount of your investment as described above.

  By check

o Make out a check for the investment amount payable to J.P. Morgan
  Institutional Funds.

o Mail the check with a completed investment slip to the Shareholder Services
  Agent. If you do not have an investment slip, attach a note indicating your
  account number and how much you wish to invest in which fund(s).

  By exchange

o Call the Shareholder Services Agent to effect an exchange.

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.

  Redemption in kind

o The fund reserves the right to make redemptions of over $250,000 in securities
  rather than in cash.

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 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. When these methods are
not available or do not represent a security's value at the time of pricing
(e.g. when an event occurs after the close of trading that would materially
impact a security's value), the security is valued in accordance with the fund's
fair valuation procedures.


Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. The fund has the right to suspend redemption of shares as
permitted by law and to postpone payment of proceeds for up to seven days.


- --------------------------------------------------------------------------------
        Transfer Agent                            Shareholder Services Agent
        State Street Bank and Trust Company       J.P. Morgan Funds Services
        P.O. Box 8411                             522 Fifth Avenue
        Boston, MA 02266-8411                     New York, NY 10036
        Attention: J.P. Morgan Funds Services     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 may 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:

- --------------------------------------------------------------------------------
Transaction                            Tax status
- --------------------------------------------------------------------------------
Income dividends on                    Generally tax exempt
municipal obligations
- --------------------------------------------------------------------------------
Income dividends on                    Ordinary income
taxable securities
- --------------------------------------------------------------------------------
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.


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.


- --------------------------------------------------------------------------------
Advisory services                  0.25% of the fund's average net
                                   assets
- --------------------------------------------------------------------------------
Administrative services            Fund's prorata portion of
(fee shared with Funds             0.09% of the first $7 billion
Distributor, Inc.)                 of average net assets in
                                   J.P. Morgan-advised portfolios,
                                   plus 0.04% of average net assets
                                   over $7 billion
- --------------------------------------------------------------------------------
Shareholder services               0.10% of the fund's average
                                   net assets
- --------------------------------------------------------------------------------


J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in the fund.



     PERFORMANCE  OF  PRIVATE  ACCOUNTS  The  fund's  investment  objective  and
policies  are  substantially  similar to those used by J.P.  Morgan in  managing
certain discretionary  investment management accounts. The chart below shows the
historical  investment  performance  for a composite of these  private  accounts
("Tax Aware Composite") and for the fund's benchmark index.

     The  performance  of the Tax Aware  Composite does not represent the fund's
performance  nor should it be  interpreted  as  indicative  of the fund's future
performance. The accounts in the Tax Aware Composite are not subject to the same
regulatory requirements and limitations imposed on mutual funds. If the accounts
included  in the Tax  Aware  Composite  had been  subject  to  these  regulatory
requirements  and  limitations,   their   performance  might  have  been  lower.
Additionally,  although  it is  anticipated  that  the  fund  and the Tax  Aware
Composite will hold similar securities, their investment results are expected to
differ.  In  particular,  difference in asset size and cash flow  resulting from
purchases  and  redemptions  of fund shares may result in  different  securities
selections,  differences in the relative weightings of securities or differences
in the prices paid for particular fund holdings.

     The performance of the Tax Aware  Composite  reflects the deductions of the
fund's  total  operating  expenses,   after  expense   reimbursement,   and  the
reinvestment of dividends and other distributions. The taxable-equivalent return
is a  measure  of what a fully  taxable  fund  would  have to return in order to
generate  equivalent  after-tax  return  using  a 39.6%  income  tax  rate.  The
performance  information is the average annual total return of the Composite for
the periods indicated.


<TABLE>
<CAPTION>

Average annual total returns for the year ended December 31,          1998    1999
- ------------------------------------------------------------------------------------------
<S>                                                                   <C>     <C>
Tax Aware Private Account Composite                                   4.14    2.98
- ------------------------------------------------------------------------------------------
Tax Aware Private Account Composite - Taxable-Equivalent @ 39.6%      6.46    5.50
- ------------------------------------------------------------------------------------------
Merrill Lynch 3-month U.S. Treasury Bill Index (no expenses)          5.23    4.85
- ------------------------------------------------------------------------------------------
</TABLE>

The fund's total return for the period 4/19/99 (commencement of operations)
through 12/31/99 was 2.28%. The fund's tax equivalent total return @ 39.6% for
the period 4/19/99 (commencement of operations) through 12/31/99 was 3.71%.


The Composite currently includes all discretionary accounts managed by J.P.
Morgan using substantially similar investment strategy as the fund. The
inception date for the Composite was July 1, 1996.


                                                                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. It also outlines the fund's policies toward various
investments, 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,           o Bonds have generally                o Under normal circumstances the fund plans to remain
  yield, and total return will        outperformed money market             fully invested in bonds and other fixed income
  fluctuate in response to            investments over the long             securities as noted in the table on pages 12-13
  bond market movements               term, with less risk than
                                      stocks                              o The fund seeks to limit risk and enhance after tax
o The value of most bonds will                                              yields through careful management, sector allocation,
  fall when interest rates          o Most bonds will rise in               individual securities selection, and duration management
  rise; the longer a bond's           value when interest rates
  maturity and the lower its          fall                                o During severe market downturns, the fund has the option
  credit quality, the more its                                              of investing up to 100% of assets in investment-grade
  value typically falls             o Mortgage-backed and                   short-term securities
                                      asset-backed securities can
o Adverse market conditions           offer attractive returns            o J.P. Morgan monitors interest rate trends, as well as
  may from time to time cause                                               geographic and demographic information related to
  the fund to take temporary                                                mortgage-backed securities and mortgage prepayments
  defensive positions that are
  inconsistent with its
  principal investment
  strategies and may hinder
  the fund from achieving its
  investment objective

o Mortgage-backed and
  asset-backed securities
  (securities representing an
  interest in, or secured by,
  a pool of mortgages or other
  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

o The fund could underperform       o The fund could outperform           o J.P. Morgan focuses its active management on those areas
  its benchmark due to its            its benchmark due to these            where it believes its commitment to research can most
  sector, securities, or              same choices                          enhance after tax income and manage risks in a
  duration choices                                                          consistent way
                                    o An optimal allocation could
o The fund could generate             enhance after tax income
  lower after tax income if
  its taxable/tax exempt
  allocation is not optimal

Credit quality

o The default of an issuer          o Investment-grade bonds have         o The fund maintains its own policies for balancing credit
  would leave the fund with           a lower risk of default               quality against potential yields and gains in light of
  unpaid interest or principal                                              its investment goals

                                                                          o J.P. Morgan develops its own ratings of unrated
                                                                            securities and makes a credit quality determination for
                                                                            unrated securities

Short-term trading


o Increased trading would           o The fund could realize gains        o The fund generally avoids short-term trading, except to
  raise the fund's transaction        in a short period of time             take advantage of attractive or unexpected opportunities
  costs                                                                     or to meet demands generated by shareholder activity
                                    o The fund could protect
o Increased short-term capital        against losses if a bond is
  gains distributions would           overvalued and its value
  raise shareholders' income          later falls
  tax liability
</TABLE>

10 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Potential risks                  |  Potential rewards                  |  Policies to balance risk and reward
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                   <C>
Foreign investments

o The fund could lose money         o Foreign bonds, which                o Foreign bonds may be a significant investment (25% of
  because of foreign                  represent a major portion of          assets) for the fund
  government actions,                 the world's fixed income
  political instability, or           securities, offer attractive        o To the extent that the fund invests in foreign bonds, it
  lack of adequate and                potential performance and             will hedge its currency exposure into the U.S. dollar
  accurate information                opportunities for                     (see also "Derivatives")
                                      diversification
o Currency exchange rate
  movements could reduce gains      o Favorable exchange rate
  or create losses                    movements could generate
                                      gains or reduce losses

Derivatives

o Derivatives such as futures,      o Hedges that correlate well          o The fund uses derivatives such as futures, options,
  options, swaps and forward          with underlying positions             swaps and forward foreign currency contracts for hedging
  foreign currency contracts          can reduce or eliminate               and for risk management (i.e., to adjust duration or to
  that are used for hedging           losses at low cost                    establish or adjust exposure to particular securities,
  the portfolio or specific                                                 markets, or currencies)
  securities may not fully          o The fund could make money
  offset the underlying               and protect against losses          o The fund only establishes hedges that it expects will be
  positions(1) and this could         if management's analysis              highly correlated with underlying positions
  result in losses to the fund        proves correct
  that would not have                                                     o While the fund may use derivatives that incidentally
  otherwise occurred                o Derivatives that involve              involve leverage, it does not use them for the specific
                                      leverage could generate               purpose of leveraging the portfolio
o Derivatives used for risk           substantial gains at low
  management may not have the         cost
  intended effects and may
  result in losses or missed
  opportunities

o The counterparty to a
  derivatives contract could
  default

o Certain types of derivatives
  involve costs to the fund
  which can reduce returns

o Derivatives that involve
  leverage could magnify
  losses

Securities lending

o When a fund lends a               o A fund may enhance income           o J.P. Morgan maintains a list of approved borrowers
  security, there is a risk           through the investment of
  that the loaned securities          the collateral received from        o The fund receives collateral equal to at least 100% of
  may not be returned if the          the borrower                          the current value of securities loaned
  borrower defaults
                                                                          o The lending agents indemnify a fund against borrower
o The collateral will be                                                    default
  subject to the risks of the
  securities in which it is                                               o J.P. Morgan's collateral investment guidelines limit the
  invested                                                                  quality and duration of collateral investment to
                                                                            minimize losses

                                                                          o Upon recall, the borrower must return the securities
                                                                            loaned within the normal settlement period

Illiquid holdings

o The fund could have               o These holdings may offer            o The fund may not invest more than 15% of net assets in
  difficulty valuing these            more attractive yields or             illiquid holdings
  holdings precisely                  potential growth than
                                      comparable widely traded            o To maintain adequate liquidity to meet redemptions, the
o The fund could be unable to         securities                            fund may hold investment-grade short-term securities
  sell these holdings at the                                                (including repurchase agreements) and, for temporary or
  time or price desired                                                     extraordinary purposes, may borrow from banks up to
                                                                            33 1/3% of the value of its total assets

When-issued and delayed
  delivery securities

o When the fund buys                o The fund can take advantage         o The fund uses segregated accounts to offset leverage
  securities before issue or          of attractive transaction             risk
  for delayed delivery, it            opportunities
  could be exposed to leverage
  risk if it does not use
  segregated accounts
</TABLE>

(1) A futures contract is an agreement to buy or sell a set quantity of an
    underlying instrument at a future date, or to make or receive a cash payment
    based on the value of a securities index. An option is the right to buy or
    sell a set quantity of an underlying instrument at a predetermined price. A
    swap is a privately negotiated agreement to exchange one stream of payments
    for another. A forward foreign currency contract is an obligation to buy or
    sell a given currency on a future date and at a set price.

                                                               FUND DETAILS | 11
<PAGE>


- --------------------------------------------------------------------------------

Investments

This table discusses the customary types of investments which can be held by the
fund. In each case the principal types of risk are listed on the following page
(see below for definitions).This table reads across two pages.


- --------------------------------------------------------------------------------
Asset-backed securities Interests in a stream of payments from specific assets,
such as auto or credit card receivables.
- --------------------------------------------------------------------------------
Bank obligations Negotiable certificates of deposit, time deposits and bankers'
acceptances of domestic and foreign issuers.
- --------------------------------------------------------------------------------
Commercial paper Unsecured short term debt issued by domestic and foreign banks
or corporations. These securities are usually discounted and are rated by S&P or
Moody's.
- --------------------------------------------------------------------------------
Convertible securities Domestic and foreign debt securities that can be
converted into equity securities at a future time and price.
- --------------------------------------------------------------------------------
Corporate bonds Debt securities of domestic and foreign industrial, utility,
banking, and other financial institutions.
- --------------------------------------------------------------------------------
Mortgages (directly held) Domestic debt instrument which gives the lender a lien
on property as security for the loan payment.
- --------------------------------------------------------------------------------
Mortgage-backed securities Domestic and foreign securities (such as Ginnie Maes,
Freddie Macs, Fannie Maes) which represent interests in pools of mortgages,
whereby the principal and interest paid every month is passed through to the
holder of the securities.
- --------------------------------------------------------------------------------
Mortgage dollar rolls The sale of domestic and foreign mortgage-backed
securities with the promise to purchase similar securities at a later date.
Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Participation interests Interests that represent a share of bank debt or similar
securities or obligations.
- --------------------------------------------------------------------------------
Private placements Bonds or other investments that are sold directly to an
institutional investor.
- --------------------------------------------------------------------------------
REITs and other real-estate related instruments Securities of issuers that
invest in real estate or are secured by real estate.
- --------------------------------------------------------------------------------
Repurchase agreements Contracts whereby the fund agrees to purchase a security
and resell it to to the seller on a particular date and at a specific price.
- --------------------------------------------------------------------------------
Reverse repurchase agreements Contracts whereby the fund sells a security and
agrees to repurchase it from the buyer on a particular date and at a specific
price. Considered a form of borrowing.
- --------------------------------------------------------------------------------
Sovereign debt, Brady bonds, and debt of supranational organizations Dollar- or
non-dollar-denominated securities issued by foreign governments or supranational
organizations. Brady bonds are issued in connection with debt restructurings.
- --------------------------------------------------------------------------------
Swaps Contractual agreement whereby a party agrees to exchange periodic payments
with a counterparty. Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Tax exempt municipal securities Securities, generally issued as general
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 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 payment securities Domestic and foreign
securities offering 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.
- --------------------------------------------------------------------------------


Risk related to certain investments held by J.P. Morgan fixed income funds:

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.

Currency risk The risk currency exchange rate fluctuations may reduce gains or
increase losses on foreign investments.

Environmental risk The risk that an owner or operator of real estate may be
liable for the costs associated with hazardous or toxic substances located on
the property.

Extension risk The risk a rise in interest rates will extend the life of a
mortgage-backed security to a date later than the anticipated prepayment date,
causing the value of the investment to fall.

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.


12 | FUND DETAILS
<PAGE>



- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The financial table is intended to help you understand the fund's financial
performance for the past fiscal period. 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 reports, along with the fund's
financial statements, are included in the fund's annual report, which is
available upon request.

- --------------------------------------------------------------------------------
J.P. MORGAN INSTITUTIONAL TAX AWARE ENHANCED INCOME FUND

Per-share data     For fiscal period ended October 31
- --------------------------------------------------------------------------------

                                                                       1999(1,2)
Net asset value, beginning of period ($)                               2.00
- --------------------------------------------------------------------------------
Income from investment operations:
  Net investment income ($)                                            0.04
  Net realized and unrealized gain (loss)
  on investment ($)                                                   (0.01)
- --------------------------------------------------------------------------------
Total from investment operations ($)                                   0.03
- --------------------------------------------------------------------------------
Less distributions to shareholders from:
                            Net investment income                     (0.04)
- --------------------------------------------------------------------------------
Net asset value, end of period ($)                                     1.99
- --------------------------------------------------------------------------------

Ratios and supplemental data
- --------------------------------------------------------------------------------
Total return (%)                                                       1.57(3)
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                             354,823
- --------------------------------------------------------------------------------
Ratios to average net assets:
Net expenses (%)                                                       0.25(4)
- --------------------------------------------------------------------------------
Net investment income (%)                                              4.01(4)
- --------------------------------------------------------------------------------
Expenses without reimbursement (%)                                     0.57(4)
- --------------------------------------------------------------------------------
Portfolio turnover (%)                                                   69(3)
- --------------------------------------------------------------------------------

(1) The fund commenced operations on 4/19/99.
(2) The figures have been adjusted to reflect a stock split that occurred on
    7/27/99 (7.50251256 to 1).
(3) Not annualized.
(4) Annualized.


14 | FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)

<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 Tax Aware Enhanced Income 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.

JPMorgan
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds

Advisor                                          Distributor
J.P. Morgan Investment Management Inc.           Funds Distributor, Inc.
522 Fifth Avenue                                 60 State Street
New York, NY 10036                               Boston, MA 02109
1-800-766-7722                                   1-800-221-7930

                                                                          IMPR06

<PAGE>


- --------------------------------------------------------------------------------
                                                    March 1, 2000  |  Prospectus
- --------------------------------------------------------------------------------


J.P. MORGAN GLOBAL 50 FUND

                                        ---------------------------------------
                                        A global equity fund seeking high
                                        total return from a concentrated
                                        portfolio of stocks

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 or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense for anyone to state or suggest otherwise.

Distributed by Funds Distributor, Inc.                                  JPMorgan

<PAGE>

- --------------------------------------------------------------------------------

<PAGE>

Contents
- --------------------------------------------------------------------------------


2 | The fund's goal, principal strategies, principal risks, performance and
    expenses


J.P. Morgan GLobal 50 Fund
Fund description .................  2
Investor expenses ................  3

4 |

GLOBAL EQUITY MANAGEMENT APPROACH
J.P. Morgan ................................................................   4
J.P. Morgan Global 50 Fund .................................................   4
Who may want to invest .....................................................   4
Global equity investment process ...........................................   5

6 | Investing in the J.P. Morgan Global 50 Fund

Your Investment
Investing through a financial professional .................................   6
Investing through an employer-sponsored retirement plan ....................   6
Investing through an IRA or rollover IRA ...................................   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
Financial highlights .......................................................  12
For more information ................................................ back cover


<PAGE>

J.P. MORGAN GLOBAL 50 FUND         | TICKER SYMBOL: JPMGX
- --------------------------------------------------------------------------------
                                     Registrant: J.P. Morgan series Trust
                                     (J.P. MOrgan Global 50 Fund: Select Shares)

[GRAPHIC OMITTED]
Risk/Return Summary

For a more detailed discussion of the fund's investments and their main risks,
as well as fund strategies, please see pages 10-11.

[GRAPHIC OMITTED]
Goal

The fund seeks to provide high total return from a concentrated portfolio of
global equity securities. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]
Investment Approach

Principal Strategies

The fund invests in approximately fifty stocks of primarily large and mid-cap
companies located throughout the world. Using its global perspective, J.P.
Morgan uses the investment process described on page 5 to identify those stocks
which in its view have an exceptional return potential.

Under normal conditions, the fund invests in stocks of at least 3 countries,
including the United States, and in a variety of industries; the fund is not
constrained by geographic limits and will not concentrate in any one industry.
The fund may invest in both developed and emerging markets. The fund may invest
substantially in securities denominated in foreign currencies and actively seeks
to enhance returns through managing currency exposure.

Principal Risks

The value of your investment in the fund will fluctuate in response to movements
in global stock markets. Fund performance will also depend on the effectiveness
of J.P. Morgan's research and the management team's stock picking decisions.

The fund may invest in fewer stocks than other global equity funds. This
concentration increases the risk and potential of the fund. With a concentrated
portfolio of securities, it is possible that the fund could have returns that
are significantly more volatile than relevant market indices and other, more
diversified mutual funds. Because the fund holds a relatively small number of
securities, a large movement in the price of a stock in the portfolio could have
a larger impact on the fund's share price then would occur if the fund held more
securities.

In general, international investing involves higher risks than investing in U.S.
markets but offers attractive opportunities for diversification. Foreign markets
tend to be more volatile than those of the U.S., and changes in currency
exchange rates could impact market performance. These risks are higher in
emerging markets. To the extent that the fund hedges its currency exposure into
the U.S. dollar, it may reduce the effects of currency fluctuations. The fund
may also hedge from one foreign currency to another, although emerging markets
investments are typically unhedged.

An investment in the fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money if you sell when the Fund's share price is lower
than when you invested.

Portfolio Management


The fund's assets are managed by J.P. Morgan, which currently manages
approximately $349 billion, including more than $3.2 billion using similar
strategies as the fund.


The portfolio management team is led by Andrew Cormie, vice president, who has
been an international equity portfolio manager since 1977 and employed by J.P.
Morgan since 1984, Thomas Madsen, managing director, who has been an
international equity portfolio manager since 1984 and employed by J.P. Morgan
since 1979 and Shawn Lytle, vice president, who has been an international equity
portfolio manager since 1998 and employed by J.P. Morgan since 1992.

- --------------------------------------------------------------------------------
Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.


2 | J.P. MORGAN GLOBAL 50 FUND
<PAGE>


- --------------------------------------------------------------------------------
Performance (unaudited)

The bar chart and table shown below provide some indication of the risks of
investing in J.P. Morgan Global 50 Fund.

The bar chart indicates some of the risks by showing the performance of the
fund's shares during its first complete calendar year of operations.

The table indicates some of the risks by showing how the fund's average annual
returns for the past year and for the life of the fund compare to those of the
MSCI World Index. This is a widely recognized, unmanaged index that measures
stock market performance worldwide using the share prices of approximately 1,600
companies listed on stock exchanges in 22 countries.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

Total return (%)                  Shows changes in returns by calendar year(1,2)
- --------------------------------------------------------------------------------

                                                                     1999

50%                                                                  45.34

25%

0%

- --------------------------------------------------------------------------------

[ ] J.P. Morgan Global 50 Fund

For the period covered by this total return chart, the fund's highest quarterly
return was 24.48% (for the quarter ended 12/31/99); and the lowest quarterly
return was -0.58% (for the quarter ended 9/30/99).


<TABLE>
<CAPTION>

Average annual total return (%)                                     Shows performance over time, for periods ended December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Past 1 yr.   Life of fund(1)
<S>                                                                                                       <C>            <C>
J.P. Morgan Global 50 Fund (after expenses)                                                               45.34          25.19
- ------------------------------------------------------------------------------------------------------------------------------------
MSCI World Index  (no expenses)                                                                           24.93          21.61
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


- --------------------------------------------------------------------------------
Investor Expenses


The expenses of the fund before and after reimbursement are shown at right. The
fund has no sales, redemption, exchange, or account fees, although some
institutions may charge you a fee for shares you buy through them. The annual
fund expenses after reimbursement are deducted from fund assets prior to
performance calculations.

Annual fund operating expenses(3) (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------
Management fees                                                             1.25

Marketing (12b-1) fees                                                      none

Other expenses                                                              0.72
- --------------------------------------------------------------------------------
Total operating expenses                                                    1.97

Fee waiver and expense reimbursement(4)                                     0.47
- --------------------------------------------------------------------------------
Net expenses(4)                                                             1.50
- --------------------------------------------------------------------------------

Expense example(4)
The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, net expenses for the period
3/1/00 through 2/28/01 and total operating expenses thereafter, and all shares
sold at the end of each time period. The example is for comparison only; the
fund's actual return and your actual costs may be higher or lower.

- --------------------------------------------------------------------------------
                                  1 yr.      3 yrs.     5 yrs.        10 yrs.
Your cost($)                      153         573        1,019        2,258
- --------------------------------------------------------------------------------

(1)   The fund commenced operations on 5/29/98 and returns reflect performance
      of the fund from 5/31/98.

(2)   The fund's fiscal year end is 10/31.

(3)   This table shows expenses for the past fiscal year, expressed as a
      percentage of average net assets.

(4)   Reflects an agreement dated 3/1/00 by Morgan Guaranty Trust Company of New
      York, an affiliate of J.P. Morgan, to reimburse the fund to the extent
      expenses (excluding extraordinary expenses) exceed 1.50% of the fund's
      average daily net assets through 2/28/01.



                                                 J.P. MORGAN GLOBAL 50 FUND | 3
<PAGE>

GLOBAL EQUITY 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 380 analysts and portfolio managers
around the world and approximately $349 billion in assets under management,
including assets managed by the fund's advisor, J.P. Morgan Investment
Management, Inc.


J.P. MORGAN GLOBAL 50 FUND

This fund invests in approximately fifty U.S. and foreign stocks. As a
shareholder, you should anticipate risks and rewards beyond those of a typical
equity fund investing solely in U.S. stocks.

- --------------------------------------------------------------------------------
WHO MAY WANT TO INVEST

The fund is designed for investors who:

o are pursuing a long-term goal

o want to add a global investment with growth potential to further diversify a
  portfolio

o are looking for the added rewards and are willing to accept the added risks of
  a fund that invests in a relatively small number of stocks

The fund is not designed for investors who:

o require regular income or stability of principal

o are pursuing a short-term goal or investing emergency reserves

o are uncomfortable with the risks of international investing

o are looking for a less aggressive stock investment

o want a fund that consistently focuses on particular industries or sectors


4 | GLOBAL EQUITY MANAGEMENT APPROACH
<PAGE>

- --------------------------------------------------------------------------------

J.P. Morgan, as advisor, selects the fifty stocks for the fund's investments
using the investment process described below to determine which companies are
most likely to provide high total return to shareholders. In order to maximize
return potential, the fund is not constrained by geographic limits and will not
concentrate in any one industry; the fund may invest in both developed and
emerging markets.

[GRAPHIC OMITTED]
J.P. Morgan analysts develop proprietary
                    fundamental research

GLOBAL EQUITY INVESTMENT PROCESS

Research and valuation Research findings allow J.P. Morgan to rank companies
according to their relative value; combined with J.P. Morgan's qualitative view,
the most attractive investment opportunities in a universe of 2,500 stocks are
identified.


J.P. Morgan takes an in-depth look at company prospects over a relatively long
period -- often as much as five years -- rather than focusing on near-term
expectations. This approach is designed to provide insight into a company's
growth potential. J.P. Morgan's in-house research is developed by an extensive
worldwide network of over 120 career analysts following 2,500 stocks in 22
countries. J.P. Morgan produces valuation rankings of issuers with a market
capitalization generally greater than $1.5 billion with the help of a variety of
models that quantify its research team's findings.


[GRAPHIC OMITTED]
          Using research and valuations,
              the fund's management team
             chooses stocks for its fund

Stock selection Using research as the basis for investment decisions, J.P.
Morgan portfolio managers construct a concentrated stock portfolio representing
companies which in their view have an exceptional return potential relative to
other companies. J.P. Morgan's stock selection focuses on highly rated
undervalued companies which also meet certain other criteria, such as
responsiveness to industry themes (e.g. consolidation/restructuring), conviction
in management, the company's product positioning, and catalysts that may
positively affect a stock's performance over the next twelve months.

[GRAPHIC OMITTED]
     Morgan may adjust currency exposure
             to seek to manage risks and
                         enhance returns

Currency management J.P. Morgan actively manages the fund's currency exposure in
an effort to manage risk and enhance total return. The fund has access to J.P.
Morgan's currency specialists to determine the extent and nature of its exposure
to various foreign currencies.


                                           GLOBAL EQUITY MANAGEMENT APPROACH | 5
<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 THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN
Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA
Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY
Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o     Determine the amount you are investing. The minimum amount for initial
      investments in the fund is $2,500 and for additional investments $500,
      although these minimums may be less for some investors. For more
      information on minimum investments, call 1-800-521-5411.

o     Complete the application, indicating how much of your investment you want
      to allocate to which fund(s). Please apply now for any account privileges
      you may want to use in the future, in order to avoid the delays associated
      with adding them later on.

o     Mail in your application, making your initial investment as shown at
      right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

OPENING YOUR ACCOUNT

      By wire
o     Mail your completed application to the Shareholder Services Agent.

o     Call the Shareholder Services Agent to obtain an account number and to
      place a purchase order. Funds that are wired without a purchase order will
      be returned uninvested.

o     After placing your purchase order, instruct your bank to wire the amount
      of your investment to:

          State Street Bank & Trust Company
          Routing number: 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
o     Make out a check for the investment amount payable to J.P. Morgan Funds.

o     Mail the check with your completed application to the Transfer Agent.

      By exchange
o     Call the Shareholder Services Agent for an exchange.

ADDING TO YOUR ACCOUNT

      By wire
o     Call the Shareholder Services Agent to place a purchase order. Funds that
      are wired without a purchase order will be returned uninvested.

o     Once you have placed your purchase order, instruct your bank to wire the
      amount of your investment as described above.

      By check
o     Make out a check for the investment amount payable to J.P. Morgan Funds.

o     Mail the check with a completed investment slip to the Transfer Agent. If
      you do not have an investment slip, attach a note indicating your account
      number and how much you wish to invest in which fund(s).

      By exchange
o     Call the Shareholder Services Agent for 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 cash 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 any cash proceeds sent by check or by wire.

o     Make sure the letter is signed by an authorized party. The Shareholder
      Services Agent may require additional information, such as a signature
      guarantee.

o     Mail the letter to the Shareholder Services Agent.

      By exchange
o     Call the Shareholder Services Agent to effect an exchange.

      Redemption in kind
o     The fund reserves the right to make redemptions of over $250,000 in
      securities rather than in cash.

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 (generally 4:00 p.m. eastern time).

The fund's securities are typically priced using pricing services or market
quotes. When these methods are not available or do not represent a security's
value at the time of pricing (e.g., when an event occurs after the close of
trading that would materially impact a security's value), the security is valued
in accordance with the fund's fair valuation procedures.


Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE (generally 4:00 p.m.) every business day and are
executed the same day, at that day's NAV. The fund has the right to suspend
redemption of shares, as permitted by law, and to postpone payment of proceeds
for up to seven days.


- --------------------------------------------------------------------------------
                                        |
Transfer Agent                                 Shareholder Services Agent
State Street Bank and Trust Company            J.P. Morgan Funds Services
P.O. Box 8411                                  522 Fifth Avenue
Boston, MA 02266-8411                          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, the 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 pays income dividends and makes capital gains distributions,
if any, once per year (usually in December). However, the fund may make more or
fewer payments in a given year, depending on its investment results and its tax
compliance situation. 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                           Ordinary income
- --------------------------------------------------------------------------------
Short-term capital gains                   Ordinary income
distributions
- --------------------------------------------------------------------------------
Long-term capital gains                    Capital gains
distributions
- --------------------------------------------------------------------------------
Sales or exchanges of shares               Capital gains or losses
owned for more than one year
- --------------------------------------------------------------------------------
Sales or exchanges of shares               Gains are treated as ordinary
owned for one year or less                 income; losses are subject
                                           to special rules
- --------------------------------------------------------------------------------

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when the fund is about to declare a long-term capital
gains distribution.

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 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 certain
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            1.25% of the fund's average net assets
- --------------------------------------------------------------------------------
Administrative services      Fund's pro-rata portion of 0.09% of the first $7
(fee shared with Funds       billion of average net assets in J.P.
Distributor, Inc.)           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.



                                                                FUND DETAILS | 9
<PAGE>

- --------------------------------------------------------------------------------

RISK AND REWARD ELEMENTS

This table identifies the main elements that make up the fund's overall risk and
reward characteristics. It also outlines the fund's policies toward various
investments, 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>
Foreign and other market
conditions

o  The fund's share price and               o  Stocks have generally                o  Under normal circumstances the
   performance will fluctuate in               outperformed more stable invest-        fund plans to remain fully
   response to stock market                    ments (such as bonds and cash           invested, with at least 65% in
   movements                                   equivalents) over the long term         stocks of at least three
                                                                                       countries, including the United
                                                                                       States; stock investments may
                                                                                       include convertible securities,
                                                                                       preferred stocks, depository
                                                                                       receipts (such as ADRs and
                                                                                       EDRs), trust or partnership
                                                                                       interests, warrants, rights, and
                                                                                       investment company securities

o  The fund could lose money                o  Foreign investments, which           o  During severe market downturns,
   because of foreign government               represent a major portion of the        the fund has the option of
   actions, political instability,             world's securities, offer               investing up to 100% of assets
   or lack of adequate and/or                  attractive potential performance        in investment-grade short-term
   accurate information                        and opportunities for                   securities
                                               diversification

o  Investment risks tend to be              o  Emerging markets can offer
   higher in emerging markets.                 higher returns
   These markets also present
   higher liquidity and valuation
   risks

o  The fund invests in a relatively         o  These same stocks could
   small number of stocks. If these            outperform the general market
   stocks underperform the general             and provide greater returns than
   market, the fund could                      more diversified funds
   underperform more diversified
   funds

o  Adverse market conditions may
   from time to time cause the fund
   to take temporary defensive
   positions that are inconsistent
   with its principal investment
   strategies and may hinder the
   fund from achieving its
   investment objective
- -----------------------------------------------------------------------------------------------------------------------
Foreign currencies

o  Currency exchange rate movements         o  Favorable exchange rate              o  The fund actively manages the
   could reduce gains or create                movements could generate gains          currency exposure of its foreign
   losses                                      or reduce losses                        investments and may hedge a
                                                                                       portion of its foreign currency
o  Currency risks tend to be higher                                                    exposure into the U.S. dollar or
   in emerging markets                                                                 other currencies which the
                                                                                       Advisor deems more attractive
                                                                                       (see also "Derivatives")
- -----------------------------------------------------------------------------------------------------------------------
Securities lending

o  When the fund lends a security,          o  The fund may enhance income          o  J.P. Morgan maintains a list of
   there is a risk that the loaned             through the investment of the           approved borrowers
   securities may not be returned              collateral received from the
   if the borrower defaults                    borrower                             o  The fund receives collateral
                                                                                       equal to at least 100% of the
o  The collateral will be subject                                                      current value of securities
   to the risks of the securities                                                      loaned
   in which it is invested
                                                                                    o  The lending agents indemnify the
                                                                                       fund against borrower default

                                                                                    o  J.P. Morgan's collateral
                                                                                       investment guidelines limit the
                                                                                       quality and duration of
                                                                                       collateral investment to
                                                                                       minimize losses

                                                                                    o  Upon recall, the borrower must
                                                                                       return the securities loaned
                                                                                       within the normal settlement
                                                                                       period
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>


10 | FUND DETAILS
<PAGE>

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Potential risks                           | Potential rewards                     | Policies to balance risk and reward
- -----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                     <C>
Derivatives
o  Derivatives such as futures,             o  Hedges that correlate well with      o  The fund uses derivatives, such
   options, swaps, and forward                 underlying positions can reduce         as futures, options, swaps, and
   foreign currency contracts(1) that          or eliminate losses at low cost         forward foreign currency
   are used for hedging the                                                            contracts, for hedging and for
   portfolio or specific securities         o  The fund could make money and           risk management (i.e., to
   may not fully offset the                    protect against losses if the           establish or adjust exposure to
   underlying positions and this               investment analysis proves              particular securities, markets
   could result in losses to the               correct                                 or currencies)
   fund that would not have
   otherwise occurred                       o  Derivatives that involve             o  The fund only establishes hedges
                                               leverage could generate                 that it expects will be highly
                                               substantial gains at low cost           correlated with underlying
                                                                                       positions

                                                                                    o  While the fund may use
                                                                                       derivatives that incidentally
                                                                                       involve leverage, it does not
                                                                                       use them for the specific
                                                                                       purpose of leveraging its
                                                                                       portfolio

o  Derivatives used for risk
   management may not have the
   intended effects and may result
   in losses or missed
   opportunities

o  The counterparty to a
   derivatives contract could
   default

o  Derivatives that involve
   leverage could magnify losses

o  Certain types of derivatives
   involve costs to the fund which
   can reduce returns
- -----------------------------------------------------------------------------------------------------------------------
Illiquid holdings
o  The fund could have difficulty           o  These holdings may offer more        o  The fund may not invest more
   valuing these holdings precisely            attractive yields or potential          than 15% of net assets in
                                               growth than comparable widely           illiquid holdings
                                               traded securities
                                                                                    o  To maintain adequate liquidity,
                                                                                       the fund may hold
                                                                                       investment-grade short-term
                                                                                       securities (including repurchase
                                                                                       agreements and reverse
                                                                                       repurchase agreements) and may
                                                                                       borrow from banks up to 33 1/3%
                                                                                       of the value of its total assets

o  The fund could be unable to sell
   these holdings at the time or
   price it desired
- -----------------------------------------------------------------------------------------------------------------------
When-issued and delayed delivery securities
o  When the fund buys securities            o  The fund can take advantage of       o  The fund uses segregated
   before issue or for delayed                 attractive transaction                  accounts to offset leverage risk
   delivery, it could be exposed to            opportunities
   leverage risk if it does not use
   segregated accounts
- -----------------------------------------------------------------------------------------------------------------------
Short-term trading
o  Increased trading could raise            o  The fund could realize gains in      o  The fund generally avoids
   the fund's brokerage and related            a short period of time                  short-term trading, except to
   costs                                                                               take advantage of attractive or
                                                                                       unexpected opportunities or to
                                                                                       meet demands generated by
                                                                                       shareholder activity

o  Increased short-term capital             o  The fund could protect against
   gains distributions could raise             losses if a stock is overvalued
   shareholders' income tax                    and its value later falls
   liability

1  A futures contract is an agreement to buy or sell a set quantity of an
   underlying instrument at a future date, or to make or receive a cash payment
   based on changes in the value of a securities index. An option is the right
   to buy or sell a set quantity of an underlying instrument at a predetermined
   price. A swap is a privately negotiated agreement to exchange one stream of
   payments for another. A forward foreign currency contract is an obligation to
   buy or sell a given currency on a future date and at a set price.
</TABLE>


                                                               FUND DETAILS | 11
<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
fund's annual report, which is available upon request.

- --------------------------------------------------------------------------------
J.P. MORGAN GLOBAL 50 FUND


<TABLE>
<CAPTION>

Per-share data                                                          For fiscal periods ended October 31
- -----------------------------------------------------------------------------------------------------------
                                                                                    1998(1)           1999
<S>                                                                                  <C>              <C>
Net asset value, beginning of period ($)                                             15.00            13.36
- -----------------------------------------------------------------------------------------------------------
Income from investment operations:
   Net investment income ($)                                                          0.22             0.06
   Net realized and unrealized gain (loss)
   on investment, futures and foreign currency contracts and transactions ($)        (1.86)            4.64
- -----------------------------------------------------------------------------------------------------------
Total from investment operations ($)                                                 (1.64)            4.70
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period ($)                                                   13.36            18.06
- -----------------------------------------------------------------------------------------------------------

Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------
Total return (%)                                                                    (10.93)(2)        35.18
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands)                                             76,486          101,070
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
  Expenses (%)                                                                       1.50(3)           1.50
- -----------------------------------------------------------------------------------------------------------
  Net investment income (%)                                                          0.43(3)           0.28
- -----------------------------------------------------------------------------------------------------------
  Expenses without reimbursement (%)                                                 2.07(3)           1.97
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover (%)                                                                  54               84
- -----------------------------------------------------------------------------------------------------------
</TABLE>

(1) The fund commenced operations on 5/29/98.
(2) Not annualized.
(3) Annualized.



12 | J.P. MORGAN GLOBAL 50 FUND
<PAGE>
- --------------------------------------------------------------------------------

                     (THIS PAGE IS INTENTIONALLY LEFT BLANK)


                                                                            | 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 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 Global 50 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
333-11125.


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



<PAGE>




                          J.P. MORGAN SERIES TRUST


                  J.P. MORGAN TAX AWARE DISCIPLINED EQUITY FUND
                     J.P. MORGAN TAX AWARE U.S. EQUITY FUND



                       STATEMENT OF ADDITIONAL INFORMATION






                                  MARCH 1, 2000



















THIS  STATEMENT  OF  ADDITIONAL  INFORMATION  IS NOT A  PROSPECTUS  BUT CONTAINS
ADDITIONAL  INFORMATION  WHICH SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
DATED MARCH 1, 2000 FOR EACH OF THE FUNDS LISTED  ABOVE,  AS  SUPPLEMENTED  FROM
TIME  TO  TIME.   ADDITIONALLY,   THIS   STATEMENT  OF  ADDITIONAL   INFORMATION
INCORPORATES BY REFERENCE THE FINANCIAL  STATEMENTS  INCLUDED IN THE SHAREHOLDER
REPORTS  RELATING TO EACH OF THE FUNDS LISTED ABOVE DATED OCTOBER 31, 1999.  THE
PROSPECTUSES   AND  THESE  FINANCIAL   STATEMENTS,   INCLUDING  THE  INDEPENDENT
ACCOUNTANTS' REPORT IN THE ANNUAL FINANCIAL STATEMENTS,  ARE AVAILABLE,  WITHOUT
CHARGE, UPON REQUEST FROM FUNDS DISTRIBUTOR,  INC., 60 STATE STREET, SUITE 1300,
BOSTON, MASSACHUSETTS 02109, ATTENTION: J.P. MORGAN SERIES TRUST (800) 221-7930.



<PAGE>



                                Table of Contents

                                                                    Page


General.................................                                1
Investment Objectives and Policies......                                1
Investment Restrictions.................                               15
Trustees and Advisory Board.............                               17
Officers................... ............                               19
Investment Advisor......................                               21
Distributor.............................                               24
Co-Administrator........................                               24
Services Agent..........................                               25
Custodian and Transfer Agent............                               26
Shareholder Servicing...................                               26
Financial Professionals.................                               27
Independent Accountants.................                               28
Expenses................................                               28
Purchase of Shares......................                               28
Redemption of Shares....................                               29
Exchange of Shares....................                                 31
Dividends and Distributions.............                               31
Net Asset Value.........................                               32
Performance Data........................                               33
Portfolio Transactions..................                               34
Massachusetts Trust.....................                               36
Description of Shares...................                               37
Taxes...................................                               38
Additional Information..................                               41
Financial Statements....................                               42
Appendix A - Description of Securities..                               A-1



<PAGE>


GENERAL

         Each of J.P. Morgan Tax Aware Disciplined Equity Fund (the "Disciplined
Equity  Fund") and J.P.  Morgan Tax Aware U.S.  Equity  Fund (the " U.S.  Equity
Fund",  and together with the Disciplined  Equity Fund, the "Funds") is a series
of J.P. Morgan Series Trust, an open-end management investment company organized
as a Massachusetts  business trust (the "Trust"). The Trustees of the Trust have
authorized  the  issuance  and sale of shares  of one  class of the  Disciplined
Equity Fund (Institutional Shares) and one class of the U.S. Equity Fund (Select
Shares).

         This   Statement  of   Additional   Information   provides   additional
information with respect to the Funds and should be read in conjunction with the
applicable  current  prospectus  (the   "Prospectus").   Capitalized  terms  not
otherwise  defined herein have the meanings  assigned to them in the Prospectus.
The  Trust's  executive  offices  are  located at 60 State  Street,  Suite 1300,
Boston, Massachusetts 02109.

     The Funds are advised by J.P. Morgan Investment Management Inc. ("JPMIM" or
the "Advisor").

         Shares of the Funds are not deposits or  obligations  of, or guaranteed
or endorsed by any bank.  Shares of the Funds are not  federally  insured by the
Federal Deposit Insurance  Corporation,  the Federal Reserve Board, or any other
governmental  agency.  An  investment  in the Funds is  subject to risk that may
cause the value of the investment to fluctuate,  and at the time it is redeemed,
be higher or lower than the amount originally invested.

INVESTMENT OBJECTIVES AND POLICIES

         The following discussion  supplements the information in the Prospectus
regarding the investment objective and policies of each Fund.

         Tax Aware  Disciplined  Equity Fund is designed for  investors  seeking
enhanced  total  return  relative to that of large and medium  sized  companies,
typically  represented  by the S&P 500  Index.  The  Disciplined  Equity  Fund's
investment  objective is to provide a  consistently  high after tax total return
from  a  broadly   diversified   portfolio  of  equity   securities   with  risk
characteristics  similar to the S&P 500 Index. This investment  objective can be
changed without shareholder approval.

         The   Disciplined   Equity  Fund   invests   primarily  in  large-  and
medium-capitalization   U.S.   companies.   Under  normal   circumstances,   the
Disciplined Equity Fund expects to be fully invested.

Investment Process for the Tax Aware Disciplined Equity Fund

         Research: The Advisor's more than 20 domestic equity analysts,  each an
industry  specialist  with an  average  of over 10 years of  experience,  follow
approximately 600 medium and large capitalization U.S. companies. Their research
goal is to forecast  intermediate-term  earnings and prospective dividend growth
rates for the companies that they cover.

         Valuation:  The  analysts'  forecasts  are  converted  into  comparable
expected returns using a proprietary  dividend discount model,  which calculates
the intermediate-term earnings by comparing a company's current stock price with
its forecasted dividends and earnings.  Within each sector, companies are ranked
according to their  relative  value and grouped into  quintiles:  those with the
highest expected returns  (Quintile 1) are deemed the most undervalued  relative
to their long-term  earnings power, while those with the lowest expected returns
(Quintile 5) are deemed the most overvalued.

         Stock Selection:  A broadly diversified  portfolio is constructed using
disciplined  buy and sell rules.  Purchases  are  allocated  among stocks in the
first three  quintiles.  Once a stock falls into the fourth and fifth  quintiles
either because its price has risen or its fundamentals  have  deteriorated -- it
generally  becomes a candidate for sale.  The  Disciplined  Equity Fund's sector
weightings are matched to those of the S&P 500 Index, the Fund's benchmark.  The
Advisor also controls the Disciplined  Equity Fund's exposure to style and theme
bets and  maintains  near-market  security  weightings  in  individual  security
holdings.   This  process   results  in  an  investment   portfolio   containing
approximately 300 stocks.

         Tax Aware  U.S.  Equity  Fund is  designed  for  investors  who want an
actively  managed   portfolio  of  selected  equity  securities  that  seeks  to
outperform the S&P 500 Index. The U.S. Equity Fund's investment  objective is to
provide  high  after  tax total  return  from a  portfolio  of  selected  equity
securities.  This  investment  objective  can  be  changed  without  shareholder
approval.

         Under normal  circumstances,  the U.S.  Equity Fund expects to be fully
invested in equity  securities  consisting of U.S. and foreign common stocks and
other  securities with equity  characteristics  which are comprised of preferred
stock, warrants, rights, convertible securities,  trust certifications,  limited
partnership interests and investment company securities  (collectively,  "Equity
Securities").  The U.S. Equity Fund's primary equity  investments are the common
stock of large- and  medium-capitalization  U.S.  corporations and, to a limited
extent, similar securities of foreign corporations.

Investment Process for the Tax Aware U.S. Equity Fund

         Research: The Advisor's more than 20 domestic equity analysts,  each an
industry  specialist  with an  average  of over 10 years of  experience,  follow
approximately  700  predominantly  large- and  medium-sized  U.S.  companies  --
approximately  500 of  which  form  the  universe  for the  U.S.  Equity  Fund's
investments. Their research goal is to forecast normalized, longer term earnings
and dividends for the companies that they cover. In doing this, they may work in
concert  with the  Advisor's  international  equity  analysts in order to gain a
broader  perspective  for evaluating  industries and companies in today's global
economy.

         Valuation:  The  analysts'  forecasts  are  converted  into  comparable
expected returns using a proprietary  dividend discount model,  which calculates
the  long-term  earnings by comparing a company's  current  stock price with its
forecasted  dividends  and  earnings.  Within each sector,  companies are ranked
according to their  relative  value and grouped into  quintiles:  those with the
highest expected returns  (Quintile 1) are deemed the most undervalued  relative
to their long-term  earnings power, while those with the lowest expected returns
(Quintile 5)
are deemed the most overvalued.

         Stock  Selection:   A  diversified   portfolio  is  constructed   using
disciplined buy and sell rules.  Purchases are concentrated among first-quintile
stocks;  the specific names selected  reflect the portfolio  manager's  judgment
concerning the soundness of the underlying  forecasts,  the likelihood  that the
perceived misvaluation will be corrected within a reasonable time frame, and the
magnitude  of the risks  versus the  rewards.  Once a stock falls into the third
quintile -- because its price has risen or its fundamentals have deteriorated --
it generally  becomes a candidate for sale. The portfolio  manager seeks to hold
sector  weightings  close to those of the S&P 500 Index,  the U.S. Equity Fund's
benchmark.

Tax Management Techniques

         The Funds use the  Advisor's  proprietary  tax  sensitive  optimization
model  which is  designed to reduce,  but not  eliminate,  the impact of capital
gains  taxes on  shareholders'  after tax total  returns.  Each Fund will try to
minimize the  realization  of net  short-term  and  long-term  capital  gains by
matching  securities  sold at a gain  with  those  sold at a loss to the  extent
practicable.  In  addition,  when selling a portfolio  security,  each Fund will
generally  select the highest  cost basis  shares of the  security to reduce the
amount of realized capital gains.  Because the gain on securities that have been
held for more than one year is subject to a lower federal income tax rate, these
securities will generally be sold before securities held less than one year. The
use of these tax  management  techniques  will not  necessarily  reduce a Fund's
portfolio  turnover  rate or prevent the Funds from  selling  securities  to the
extent warranted by shareholder  transactions,  actual or anticipated  economic,
market  or  issuer-specific  developments  or other  investment  considerations.
However,  the  annual  portfolio  turnover  rate of each Fund is  generally  not
expected to exceed 100%.

         The  various  types of  securities  in which the Funds may  invest  are
described below.

Equity Investments

     The  Funds   invest   primarily   in  Equity   Securities   consisting   of
exchange-traded,  OTC and unlisted common and preferred  stocks. A discussion of
the various  types of equity  investments  which may be  purchased  by the Funds
appears below. See also "Quality and Diversification Requirements."

     Equity Securities.  The Equity Securities in which the Funds may invest may
or may not pay  dividends and may or may not carry voting  rights.  Common stock
occupies the most junior position in a company's capital structure.

         The  convertible  securities in which the Funds may invest  include any
debt  securities or preferred  stock which may be converted into common stock or
which carry the right to purchase common stock.  Convertible  securities entitle
the holder to exchange the securities for a specified number of shares of common
stock,  usually of the same company, at specified prices within a certain period
of time.

         The  terms of any  convertible  security  determine  its  ranking  in a
company's capital structure. In the case of subordinated convertible debentures,
the holders'  claims on assets and earnings  are  subordinated  to the claims of
other   creditors  and  are  senior  to  the  claims  of  preferred  and  common
shareholders. In the case of convertible preferred stock, the holders' claims on
assets and  earnings are  subordinated  to the claims of all  creditors  and are
senior to the claims of common shareholders.



Common Stock Warrants

         The Funds may invest in common stock  warrants  that entitle the holder
to buy common stock from the issuer at a specific price (the strike price) for a
specific period of time. The market price of warrants may be substantially lower
than the current market price of the underlying  common stock,  yet warrants are
subject  to  similar  price  fluctuations.  As a  result,  warrants  may be more
volatile investments than the underlying common stock.

         Warrants  generally  do not entitle the holder to  dividends  or voting
rights with  respect to the  underlying  common stock and do not  represent  any
rights in the assets of the issuer company.  A warrant will expire  worthless if
it is not exercised prior to the expiration date.

Foreign Investments

         Each of the  Funds  may  invest  up to 20% of  their  respective  total
assets,  at the time of purchase,  in  securities of foreign  issuers.  This 20%
limit is designed to  accommodate  the increased  globalization  of companies as
well as the  re-domiciling  of companies for tax treatment  purposes.  It is not
currently expected to be used to increase direct non-U.S. exposure.

         Investors  should  realize that the value of the Funds'  investments in
foreign  securities may be adversely  affected by changes in political or social
conditions,   diplomatic  relations,   confiscatory   taxation,   expropriation,
nationalization,  limitation on the removal of funds or assets, or imposition of
(or change in) exchange  control or tax regulations in those foreign  countries.
In  addition,  changes in  government  administrations  or  economic or monetary
policies  in the  United  States  or abroad  could  result  in  appreciation  or
depreciation of portfolio  securities and could favorably or unfavorably  affect
the Funds' operations.  Furthermore, the economies of individual foreign nations
may differ from the U.S.  economy,  whether  favorably or unfavorably,  in areas
such  as  growth  of  gross  national  product,   rate  of  inflation,   capital
reinvestment, resource self-sufficiency and balance of payments position; it may
also be more  difficult  to  obtain  and  enforce a  judgment  against a foreign
issuer.  Any foreign  investments  made by the Funds must be made in  compliance
with U.S. and foreign currency restrictions and tax laws restricting the amounts
and types of foreign investments.

         Foreign  investments  may be made  directly  in  securities  of foreign
issuers  or in the  form of  American  Depository  Receipts  ("ADRs"),  European
Depository  Receipts ("EDRs") and Global  Depository  Receipts ("GDRs") or other
similar securities of foreign issuers. ADRs are securities,  typically issued by
a U.S. financial institution (a "depository"), that evidence ownership interests
in a security or a pool of securities  issued by a foreign  issuer and deposited
with the  depository.  ADRs  include  American  Depository  Shares  and New York
Shares.  EDRs are receipts  issued by a European  financial  institution.  GDRs,
which are sometimes referred to as Continental Depository Receipts ("CDRs"), are
securities,  typically issued by a non-U.S. financial institution, that evidence
ownership  interests  in a security or a pool of  securities  issued by either a
U.S.  or  foreign  issuer.  ADRs,  EDRs,  GDRs  and CDRs  may be  available  for
investment through "sponsored" or "unsponsored" facilities. A sponsored facility
is established  jointly by the issuer of the security underlying the receipt and
a depository, whereas an unsponsored facility may be established by a depository
without participation by the issuer of the receipt's underlying security.

         Holders of an unsponsored  depository  receipt generally bear all costs
of  the  unsponsored  facility.   The  depository  of  an  unsponsored  facility
frequently  is under no  obligation  to  distribute  shareholder  communications
received  from the issuer of the  deposited  security or to pass  through to the
holders of the receipts voting rights with respect to the deposited securities.

         Since investments in foreign securities may involve foreign currencies,
the  value of a Fund's  assets  as  measured  in U.S.  dollars  may be  affected
favorably or unfavorably  by changes in currency  rates and in exchange  control
regulations, including currency blockage.

Additional Investments


         When-Issued  and  Delayed  Delivery  Securities.  Each of the Funds may
purchase  securities on a when-issued or delayed  delivery  basis.  For example,
delivery  of and  payment  for these  securities  can take place a month or more
after the date of the purchase  commitment.  The purchase price and the interest
rate payable,  if any, on the  securities  are fixed on the purchase  commitment
date or at the time the settlement  date is fixed.  The value of such securities
is  subject  to market  fluctuation  and no  interest  accrues  to a Fund  until
settlement  takes  place.  At the time a Fund makes the  commitment  to purchase
securities  on a  when-issued  or delayed  delivery  basis,  it will  record the
transaction and reflect the value each day of such securities in determining its
net asset value. At the time of settlement a when-issued  security may be valued
at less than the purchase price. To facilitate such acquisitions, each Fund will
maintain with the custodian a segregated account with liquid assets,  consisting
of cash or other liquid assets, in an amount at least equal to such commitments.
If a Fund  chooses to dispose  of the right to  acquire a  when-issued  security
prior to its  acquisition,  it could,  as with the disposition of any other fund
obligation, incur a gain or loss due to market fluctuation.  Also, a Fund may be
disadvantaged if the other party to the transaction defaults.

         Investment Company Securities. Securities of other investment companies
may be acquired by each of the Funds to the extent  permitted under the 1940 Act
or  any  order  pursuant  thereto.  These  limits  currently  require  that,  as
determined  immediately  after a purchase  is made,  (i) not more than 5% of the
value of a Fund's  total  assets will be invested in the  securities  of any one
investment company, (ii) not more than 10% of the value of its total assets will
be invested in the aggregate in  securities of investment  companies as a group,
and (iii) not more than 3% of the outstanding voting stock of any one investment
company will be owned by the a Fund,  provided  however,  that a Fund may invest
all of its investable assets in an open-end investment company that has the same
investment  objective  as the  Fund.  As a  shareholder  of  another  investment
company, a Fund or Portfolio would bear, along with other shareholders,  its pro
rata portion of the other  investment  company's  expenses,  including  advisory
fees.  These  expenses  would be in addition to the advisory and other  expenses
that a Fund bears directly in connection with its own operations.  Each Fund has
applied  for  exemptive  relief  from the SEC to  permit  the Fund to  invest in
affiliated  investment  companies.  If the requested relief is granted, the Fund
would  then be  permitted  to invest in  affiliated  funds,  subject  to certain
conditions specified in the applicable order.

     The  Securities  and Exchange  Commission  ("SEC") has granted the Funds an
exemptive  order  permitting  it to  invest  its  uninvested  cash in any of the
following  affiliated money market funds: J.P. Morgan  Institutional Prime Money
Market Fund, J.P. Morgan Institutional Tax Exempt Money Market Fund, J.P. Morgan
Institutional  Federal Money Market Fund and J.P. Morgan Institutional  Treasury
Money Market Fund.  The order sets the  following  conditions:  (1) the Fund may
invest in one or more of the  permitted  money  market  funds up to an aggregate
limit of 25% of its assets;  and (2) the Advisor will waive and/or reimburse its
advisory fee from the Fund in an amount  sufficient to offset any doubling up of
investment advisory and shareholder servicing fees.


         Reverse Repurchase Agreements. Each of the Funds may enter into reverse
repurchase  agreements.  In a  reverse  repurchase  agreement,  a Fund  sells  a
security and agrees to repurchase  the same  security at a mutually  agreed upon
date and  price  reflecting  the  interest  rate  effective  for the term of the
agreement.  For purposes of the 1940 Act a reverse repurchase  agreement is also
considered  as the  borrowing  of money by the Fund  and,  therefore,  a form of
leverage. Leverage may cause any gains or losses for a Fund to be magnified. The
Funds  will  invest  the  proceeds  of  borrowings   under  reverse   repurchase
agreements. In addition, except for liquidity purposes, a Fund will enter into a
reverse  repurchase  agreement only when the expected return from the investment
of the proceeds is greater than the expense of the transaction.  A Fund will not
invest the proceeds of a reverse repurchase agreement for a period which exceeds
the duration of the reverse repurchase  agreement.  Each Fund will establish and
maintain  with the custodian a separate  account with a segregated  portfolio of
securities  in an amount at least equal to its  purchase  obligations  under its
reverse  repurchase  agreements.  See "Investment  Restrictions" for each Fund's
limitations on reverse repurchase agreements and bank borrowings.

         Loans of  Portfolio  Securities.  Each  Fund is  permitted  to lend its
securities  in an amount up to 331/3% of the value of such  Fund's  net  assets.
Each of the Funds may lend its securities if such loans are secured continuously
by cash or  equivalent  collateral or by a letter of credit in favor of the Fund
at  least  equal  at all  times to 100% of the  market  value of the  securities
loaned,  plus accrued interest.  While such securities are on loan, the borrower
will pay the  Fund  any  income  accruing  thereon.  Loans  will be  subject  to
termination by the Funds in the normal settlement time, generally three business
days after notice, or by the borrower on one day's notice.  Borrowed  securities
must be  returned  when the loan is  terminated.  Any gain or loss in the market
price of the borrowed securities which occurs during the term of the loan inures
to a Fund and its respective shareholders. The Funds may pay reasonable finders'
and custodial fees in connection with a loan. In addition,  a Fund will consider
all facts and circumstances before entering into such an agreement including the
creditworthiness of the borrowing financial  institution,  and no Fund will make
any loans in excess of one year. The Funds will not lend their securities to any
officer,  Trustee,  Member of the Advisory  Board,  Director,  employee or other
affiliate of the Funds, the Advisor or the Funds' distributor,  unless otherwise
permitted by applicable law.

         Illiquid   Investments;   Privately   Placed  and  Other   Unregistered
Securities. No Fund may acquire any illiquid securities if, as a result thereof,
more than 15% of its net assets  would be in  illiquid  investments.  Subject to
this non-fundamental  policy limitation,  each Fund may acquire investments that
are  illiquid  or  have  limited  liquidity,   such  as  private  placements  or
investments that are not registered under the Securities Act of 1933, as amended
(the "1933  Act"),  and cannot be offered for public  sale in the United  States
without first being registered under the 1933 Act. An illiquid investment is any
investment  that cannot be disposed of within seven days in the normal course of
business at approximately  the amount at which it is valued by a Fund. The price
a Fund pays for illiquid  securities  or receives  upon resale may be lower than
the price paid or received  for similar  securities  with a more liquid  market.
Accordingly  the valuation of these  securities  will reflect any limitations on
their liquidity.

         As to illiquid  investments,  these restricted  holdings are subject to
the risk that the Fund  will not be able to sell them at a price the Fund  deems
representative of their value. If a restricted  holding must be registered under
the Securities Act of 1933, as amended (the "1933 Act"),  before it may be sold,
a Fund may be obligated to pay all or part of the registration expenses. Also, a
considerable  period may elapse between the time of the decision to sell and the
time the Fund is  permitted to sell a holding  under an  effective  registration
statement.  If, during such a period, adverse market conditions were to develop,
a Fund might obtain a less  favorable  price than  prevailed  when it decided to
sell.

Money Market Instruments

         Although the Funds intend, under normal circumstances and to the extent
practicable,  to be fully invested in equity securities, each Fund may invest in
money market instruments to the extent consistent with its investment  objective
and  policies.  The  Funds  may  invest in money  market  instruments  to invest
temporary  cash  balances,  to maintain  liquidity to meet  redemptions  or as a
defensive  measure during, or in anticipation of, adverse market  conditions.  A
description  of the  various  types  of  money  market  instruments  that may be
purchased  by  the  Funds  appears  below.  See  "Quality  and   Diversification
Requirements."

     U.S.  Treasury  Securities.   Each  of  the  Funds  may  invest  in  direct
obligations of the U.S. Treasury, including Treasury bills, notes and bonds, all
of which are backed as to principal and interest  payments by the full faith and
credit of the United States.

         Additional U.S. Government Obligations. Each of the Funds may invest in
obligations   issued   or   guaranteed   by   U.S.    Government   agencies   or
instrumentalities. These obligations may or may not be backed by the "full faith
and credit" of the United States.  Securities which are backed by the full faith
and credit of the United States include  obligations of the Government  National
Mortgage  Association,  the Farmers Home  Administration,  and the Export-Import
Bank. In the case of  securities  not backed by the full faith and credit of the
United States,  each Fund must look principally to the federal agency issuing or
guaranteeing the obligation for ultimate repayment and may not be able to assert
a  claim   against  the  United  States  itself  in  the  event  the  agency  or
instrumentality does not meet its commitments. Securities in which each Fund may
invest  that are not backed by the full  faith and  credit of the United  States
include,  but are not  limited  to:  (i)  obligations  of the  Tennessee  Valley
Authority,  the Federal Home Loan  Mortgage  Corporation,  the Federal Home Loan
Banks and the U.S.  Postal  Service,  each of which has the right to borrow from
the U.S. Treasury to meet its obligations; (ii) securities issued by the Federal
National  Mortgage  Association,   which  are  supported  by  the  discretionary
authority of the U.S. Government to purchase the agency's obligations; and (iii)
obligations  of the Federal Farm Credit  System and the Student  Loan  Marketing
Association,  each of whose  obligations may be satisfied only by the individual
credits of the issuing agency.

         Bank  Obligations.  Unless otherwise noted below, each of the Funds may
invest in  negotiable  certificates  of  deposit,  time  deposits  and  bankers'
acceptances of (i) banks,  savings and loan associations and savings banks which
have more than $2 billion in total  assets and are  organized  under the laws of
the United  States or any state,  (ii)  foreign  branches  of these  banks or of
foreign  banks of  equivalent  size  (Euros) and (iii) U.S.  branches of foreign
banks of equivalent size (Yankees). The Funds will not invest in obligations for
which the Advisor,  or any of its affiliated persons, is the ultimate obligor or
accepting   bank.   Each  of  the  Funds  may  also  invest  in  obligations  of
international   banking   institutions   designated  or  supported  by  national
governments  to promote  economic  reconstruction,  development or trade between
nations (e.g.,  the European  Investment  Bank, the  Inter-American  Development
Bank, or the World Bank).

         Commercial  Paper.  Each of the Funds may invest in  commercial  paper,
including master demand  obligations.  Master demand obligations are obligations
that  provide for a periodic  adjustment  in the  interest  rate paid and permit
daily changes in the amount borrowed.  Master demand obligations are governed by
agreements  between  the issuer and Morgan  Guaranty  Trust  Company of New York
("Morgan"),  an affiliate  acting as agent,  for no  additional  fee. The monies
loaned to the borrower come from accounts  managed by Morgan or its  affiliates,
pursuant to arrangements with such accounts. Interest and principal payments are
credited to such accounts. Morgan, an affiliate of the Advisor, has the right to
increase or decrease the amount  provided to the borrower  under an  obligation.
The  borrower  has the  right  to pay  without  penalty  all or any  part of the
principal amount then outstanding on an obligation together with interest to the
date of payment.  Since these  obligations  typically  provide that the interest
rate is tied to the Federal Reserve commercial paper composite rate, the rate on
master  demand  obligations  is subject to change.  Repayment of a master demand
obligation to  participating  accounts depends on the ability of the borrower to
pay the accrued  interest and principal of the  obligation  on demand,  which is
continuously  monitored by Morgan. Since master demand obligations typically are
not rated by credit  rating  agencies,  the  Funds  may  invest in such  unrated
obligations only if, at the time of investment,  the obligation is determined by
the  Advisor  to have a  credit  quality  which  satisfies  the  Fund's  quality
restrictions.  See "Quality and Diversification Requirements." Although there is
no  secondary  market  for  master  demand  obligations,  such  obligations  are
considered by the Funds to be liquid  because they are payable upon demand.  The
Funds do not have any specific  percentage  limitation on  investments in master
demand obligations. It is possible that the issuer of a master demand obligation
could be a client of Morgan to whom Morgan, an affiliate of the Advisor,  in its
capacity as a commercial bank, has made a loan.

         Repurchase  Agreements.  Each of the Funds may  enter  into  repurchase
agreements  with  brokers,  dealers  or banks  that meet the  credit  guidelines
approved by the  Trust's  Trustees.  In a  repurchase  agreement,  a Fund buys a
security  from a seller  that has agreed to  repurchase  the same  security at a
mutually  agreed upon date and price.  The resale price normally is in excess of
the purchase price,  reflecting an agreed upon interest rate. This interest rate
is  effective  for the  period of time the  agreement  is in  effect  and is not
related to the coupon rate on the underlying  security.  A repurchase  agreement
may  also be  viewed  as a fully  collateralized  loan of money by a Fund to the
seller.  The period of these repurchase  agreements will usually be short,  from
overnight  to one  week,  and at no time will the  Funds  invest  in  repurchase
agreements for more than thirteen  months.  The securities  which are subject to
repurchase  agreements,  however,  may have maturity dates in excess of thirteen
months  from the  effective  date of the  repurchase  agreement.  The Funds will
always  receive  securities as collateral  whose market value is, and during the
entire  term of the  agreement  remains,  at least  equal to 100% of the  dollar
amount  invested by the Funds in each agreement plus accrued  interest,  and the
Funds will make payment for such securities only upon physical  delivery or upon
evidence of book entry transfer to the account of the  custodian.  If the seller
defaults,  a Fund might incur a loss if the value of the collateral securing the
repurchase  agreement  declines and might incur  disposition costs in connection
with  liquidating the  collateral.  In addition,  if bankruptcy  proceedings are
commenced with respect to the seller of the security,  realization upon disposal
of the collateral by a Fund may be delayed or limited.

Quality and Diversification Requirements

         Each of the Funds intends to meet the  diversification  requirements of
the 1940 Act.  To meet  these  requirements,  75% of the  assets of each Fund is
subject to the following  fundamental  limitations:  (1) the Fund may not invest
more than 5% of its total  assets in the  securities  of any one issuer,  except
obligations of the U.S. Government, its agencies and instrumentalities,  and (2)
the Fund may not own more than 10% of the outstanding  voting  securities of any
one  issuer.  As for the other  25% of the  Fund's  assets  not  subject  to the
limitation described above, there is no limitation on investment of these assets
under the 1940 Act, so that all of such assets may be invested in  securities of
any one issuer. Investments not subject to the limitations described above could
involve an increased risk to a Fund should an issuer,  or a state or its related
entities,  be unable to make interest or principal payments or should the market
value of such securities decline.

     The Funds will also comply with the diversification requirements imposed by
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company. See "Taxes."

         The Funds may invest in convertible  debt  securities,  for which there
are no specific quality requirements. In addition, at the time a Fund invests in
any commercial paper, bank obligation or repurchase  agreement,  the issuer must
have  outstanding  debt rated A or higher by Moody's or  Standard & Poor's,  the
issuer's parent  corporation,  if any, must have  outstanding  commercial  paper
rated Prime-1 by Moody's or A-1 by Standard & Poor's,  or if no such ratings are
available,  the  investment  must  be of  comparable  quality  in the  Advisor's
opinion.  At the time a Fund invests in any other  short-term  debt  securities,
they must be rated A or higher by Moody's or  Standard & Poor's,  or if unrated,
the investment must be of comparable quality in the Advisor's opinion.

         In  determining  suitability  of  investment  in a  particular  unrated
security,  the Advisor takes into consideration asset and debt service coverage,
the purpose of the  financing,  history of the issuer,  existence of other rated
securities of the issuer, and other relevant  conditions,  such as comparability
to other issuers.

Options and Futures Transactions

         Each of the  Funds  may (a)  purchase  and  sell  exchange  traded  and
over-the-counter  (OTC) put and call options on equity  securities or indexes of
equity securities,  (b) purchase and sell futures contracts on indexes of equity
securities  and (c) purchase and sell put and call options on futures  contracts
on indexes  of equity  securities.  Each of these  instruments  is a  derivative
instrument as its value derives from the underlying asset or index.

         Each Fund may use  futures  contracts  and options for hedging and risk
management purposes.  See "Risk Management" below. The Funds may not use futures
contracts and options for speculation.

         Each Fund may  utilize  options  and  futures  contracts  to manage its
exposure to changing  interest rates and/or  security  prices.  Some options and
futures strategies, including selling futures contracts and buying puts, tend to
hedge  a  Fund's  investments  against  price  fluctuations.  Other  strategies,
including  buying futures  contracts,  writing puts and calls, and buying calls,
tend to increase market exposure.  Options and futures contracts may be combined
with each other or with forward contracts in order to adjust the risk and return
characteristics  of a Fund's overall strategy in a manner deemed  appropriate to
the Advisor and  consistent  with the Fund's  objective  and  policies.  Because
combined  options  positions  involve  multiple  trades,  they  result in higher
transaction costs and may be more difficult to open and close out.

         The use of options and futures is a highly  specialized  activity which
involves  investment  strategies and risks different from those  associated with
ordinary portfolio securities  transactions,  and there can be no guarantee that
their use will increase a Fund's return. While the use of these instruments by a
Fund may reduce certain risks  associated with owning its portfolio  securities,
these techniques themselves entail certain other risks. If the Advisor applies a
strategy  at an  inappropriate  time  or  judges  market  conditions  or  trends
incorrectly,  options and futures strategies may lower a Fund's return.  Certain
strategies limit a Fund's possibilities to realize gains as well as limiting its
exposure  to losses.  A Fund could also  experience  losses if the prices of its
options and futures positions were poorly correlated with its other investments,
or if it could not close out its  positions  because  of an  illiquid  secondary
market.  In addition,  a Fund will incur  transaction  costs,  including trading
commissions  and option  premiums,  in  connection  with its futures and options
transactions  and these  transactions  could  significantly  increase the Fund's
turnover rate.

         Each Fund may purchase put and call options on  securities,  indexes of
securities and futures contracts,  or purchase and sell futures contracts,  only
if such options are written by other persons and if the aggregate  premiums paid
on all such  options  and the  aggregate  margin  deposits  required on all such
futures or options thereon held at any time do not exceed 5% of the Fund's total
assets.

         Purchasing  Put and Call Options.  By  purchasing a put option,  a Fund
obtains the right (but not the obligation) to sell the instrument underlying the
option at a fixed  strike  price.  In return for this  right,  the Fund pays the
current market price for the option (known as the option premium).  Options have
various types of underlying instruments,  including specific securities, indexes
of securities,  indexes of securities prices, and futures contracts.  A Fund may
terminate its position in a put option it has purchased by allowing it to expire
or by exercising the option.  A Fund may also close out a put option position by
entering  into an offsetting  transaction,  if a liquid  market  exists.  If the
option is allowed to expire,  a Fund will lose the entire  premium it paid. If a
Fund  exercises  a put  option  on a  security,  it  will  sell  the  instrument
underlying  the option at the strike price.  If a Fund exercises an option on an
index, settlement is in cash and does not involve the actual sale of securities.
If an  option  is  American  style,  it may be  exercised  on any  day up to its
expiration date. A European style option may be exercised only on its expiration
date.

         The buyer of a typical  put  option can expect to realize a gain if the
price of the underlying instrument falls substantially. However, if the price of
the instrument  underlying the option does not fall enough to offset the cost of
purchasing  the option,  a put buyer can expect to suffer a loss (limited to the
amount of the premium paid, plus related transaction costs).

         The features of call options are  essentially  the same as those of put
options,  except  that the  purchaser  of a call  option  obtains  the  right to
purchase, rather than sell, the instrument underlying the option at the option's
strike price. A call buyer typically  attempts to participate in potential price
increases of the instrument  underlying the option with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can expect to
suffer a loss if security prices do not rise  sufficiently to offset the cost of
the option.

         Selling  (Writing)  Put and  Call  Options.  When a Fund  writes  a put
option,  it  takes  the  opposite  side of the  transaction  from  the  option's
purchaser. In return for receipt of the premium, the Fund assumes the obligation
to pay the strike price for the  instrument  underlying  the option if the other
party to the option  chooses to exercise  it. A Fund may seek to  terminate  its
position in a put option it writes  before  exercise by purchasing an offsetting
option in the market at its current price. If the market is not liquid for a put
option the Fund has written,  however,  the Fund must continue to be prepared to
pay the  strike  price  while the  option is  outstanding,  regardless  of price
changes, and must continue to post margin as discussed below.

         If the price of the  underlying  instrument  rises,  a put writer would
generally expect to profit,  although its gain would be limited to the amount of
the premium it received.  If security  prices  remain the same over time,  it is
likely that the writer will also profit,  because it should be able to close out
the option at a lower  price.  If security  prices  fall,  the put writer  would
expect to suffer a loss.  This loss should be less than the loss from purchasing
and holding the underlying  instrument  directly,  however,  because the premium
received for writing the option should offset a portion of the decline.

         Writing a call option  obligates a Fund to sell or deliver the option's
underlying  instrument  in return for the  strike  price  upon  exercise  of the
option.  The  characteristics  of writing  call  options are similar to those of
writing put  options,  except  that  writing  calls  generally  is a  profitable
strategy  if prices  remain  the same or fall.  Through  receipt  of the  option
premium a call writer offsets part of the effect of a price decline. At the same
time,  because  a call  writer  must  be  prepared  to  deliver  the  underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

         The writer of an exchange  traded put or call option on a security,  an
index of  securities  or a futures  contract  is  required  to  deposit  cash or
securities  or a letter of credit as margin and to make mark to market  payments
of variation margin as the position becomes unprofitable.

         Options  on  Indexes.  Options on  securities  indexes  are  similar to
options on securities,  except that the exercise of securities  index options is
settled by cash  payment  and does not  involve  the actual  purchase or sale of
securities.   In  addition,   these   options  are  designed  to  reflect  price
fluctuations in a group of securities or segment of the securities market rather
than price  fluctuations in a single security.  A Fund, in purchasing or selling
index options, is subject to the risk that the value of its portfolio securities
may not change as much as an index because the Fund's investments generally will
not match the composition of an index.

         For a number of reasons,  a liquid market may not exist and thus a Fund
may not be able to close out an option  position that it has previously  entered
into.  When  a  Fund  purchases  an  OTC  option,  it  will  be  relying  on its
counterparty  to  perform  its  obligations,  and the Fund may incur  additional
losses if the counterparty is unable to perform.

         Exchange Traded and OTC Options.  All options  purchased or sold by the
Funds will be traded on a  securities  exchange or will be  purchased or sold by
securities dealers (OTC options) that meet  creditworthiness  standards approved
by the Funds' Board of Trustees.  While exchange-traded  options are obligations
of the Options Clearing  Corporation,  in the case of OTC options, a Fund relies
on the  dealer  from which it  purchased  the option to perform if the option is
exercised.  Thus,  when a Fund purchases an OTC option,  it relies on the dealer
from which it purchased  the option to make or take  delivery of the  underlying
securities.  Failure  by the  dealer  to do so would  result  in the loss of the
premium  paid  by a Fund  as  well  as  loss  of  the  expected  benefit  of the
transaction.

          Provided that a Fund has arrangements  with certain  qualified dealers
who agree that the Fund may  repurchase any option it writes for a maximum price
to be calculated by a  predetermined  formula,  a Fund may treat the  underlying
securities used to cover written OTC options as liquid.  In these cases, the OTC
option itself would only be  considered  illiquid to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the option.

         Futures  Contracts  and  Options  on Futures  Contracts.  The Funds may
purchase or sell  (write)  futures  contracts  and purchase or sell put and call
options,  including put and call options on futures contracts.  In addition, the
funds may sell  (write)  put and call  options,  including  options on  futures.
Futures contracts  obligate the buyer to take and the seller to make delivery at
a future date of a specified quantity of a financial  instrument or an amount of
cash based on the value of a securities index. Currently,  futures contracts are
available on various types of fixed income securities, including but not limited
to U.S. Treasury bonds, notes and bills,  Eurodollar certificates of deposit and
on indexes of fixed income securities and indexes of equity securities.

         Unlike a futures contract, which requires the parties to buy and sell a
security  or make a cash  settlement  payment  based on changes  in a  financial
instrument  or  securities  index on an  agreed  date,  an  option  on a futures
contract  entitles  its holder to decide on or before a future  date  whether to
enter into such a contract.  If the holder  decides not to exercise  its option,
the holder may close out the option  position  by  entering  into an  offsetting
transaction  or may decide to let the  option  expire and  forfeit  the  premium
thereon. The purchaser of an option on a futures contract pays a premium for the
option but makes no initial  margin  payments  or daily  payments of cash in the
nature of "variation"  margin payments to reflect the change in the value of the
underlying contract as does a purchaser or seller of a futures contract.

         The seller of an option on a futures contract receives the premium paid
by the purchaser and may be required to pay initial margin. Amounts equal to the
initial margin and any additional  collateral required on any options on futures
contracts sold by a Fund are paid by the Fund into a segregated  account, in the
name of the  Futures  Commission  Merchant,  as required by the 1940 Act and the
SEC's interpretations thereunder.

         Combined  Positions.  The Funds are  permitted  to  purchase  and write
options in  combination  with each  other,  or in  combination  with  futures or
forward contracts,  to adjust the risk and return characteristics of the overall
position.  For example, a Fund may purchase a put option and write a call option
on the same  underlying  instrument,  in order to construct a combined  position
whose risk and return characteristics are similar to selling a futures contract.
Another  possible  combined  position would involve writing a call option at one
strike price and buying a call option at a lower  price,  in order to reduce the
risk of the written call option in the event of a  substantial  price  increase.
Because combined  options  positions  involve  multiple  trades,  they result in
higher transaction costs and may be more difficult to open and close out.

         Correlation  of Price  Changes.  Because there are a limited  number of
types of exchange-traded  options and futures  contracts,  it is likely that the
standardized  options and futures  contracts  available  will not match a Fund's
current or  anticipated  investments  exactly.  A Fund may invest in options and
futures  contracts based on securities with different  issuers,  maturities,  or
other  characteristics from the securities in which it typically invests,  which
involves  a risk  that the  options  or  futures  position  will not  track  the
performance of the Fund's other investments.

         Options and futures  contracts  prices can also diverge from the prices
of their  underlying  instruments,  even if the underlying  instruments  match a
Fund's  investments  well.  Options and futures contracts prices are affected by
such factors as current and anticipated  short term interest  rates,  changes in
volatility of the underlying instrument, and the time remaining until expiration
of the contract,  which may not affect security  prices the same way.  Imperfect
correlation  may also result from differing  levels of demand in the options and
futures markets and the securities markets,  from structural  differences in how
options and futures and securities are traded, or from imposition of daily price
fluctuation  limits or trading  halts.  A Fund may  purchase or sell options and
futures  contracts  with a greater or lesser value than the securities it wishes
to  hedge  or  intends  to  purchase  in  order to  attempt  to  compensate  for
differences in volatility between the contract and the securities, although this
may not be  successful  in all cases.  If price  changes in a Fund's  options or
futures  positions  are  poorly  correlated  with  its  other  investments,  the
positions may fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.

         Liquidity  of Options and Futures  Contracts.  There is no  assurance a
liquid market will exist for any  particular  option or futures  contract at any
particular  time even if the  contract is traded on an  exchange.  In  addition,
exchanges may establish daily price  fluctuation  limits for options and futures
contracts and may halt trading if a contract's  price moves up or down more than
the limit in a given day. On volatile  trading  days when the price  fluctuation
limit is reached or a trading halt is imposed,  it may be impossible  for a Fund
to enter into new positions or close out existing positions. If the market for a
contract is not liquid  because of price  fluctuation  limits or  otherwise,  it
could prevent prompt liquidation of unfavorable positions, and could potentially
require a Fund to  continue  to hold a position  until  delivery  or  expiration
regardless of changes in its value. As a result, a Fund's access to other assets
held to cover its  options or futures  positions  could also be  impaired.  (See
"Exchange  Traded and OTC Options"  above for a discussion  of the  liquidity of
options not traded on an exchange.)

         Position Limits.  Futures exchanges can limit the number of futures and
options on futures  contracts that can be held or controlled by an entity. If an
adequate exemption cannot be obtained,  a Fund or the Advisor may be required to
reduce the size of its futures and options positions or may not be able to trade
a certain futures or options contract in order to avoid exceeding such limits.


         Asset Coverage for Futures  Contracts and Options  Positions.  Although
the Funds will not be a commodity pools,  certain  derivatives subject the Funds
to the rules of the Commodity Futures Trading  Commission which limit the extent
to which a Fund can invest in such derivatives.  Each of the Funds may invest in
futures  contracts and options with respect thereto for hedging purposes without
limit.  However,  a Fund may not invest in such  contracts and options for other
purposes if the sum of the amount of initial  margin  deposits and premiums paid
for unexpired  options with respect to such contracts,  other than for bona fide
hedging purposes,  exceeds 5% of the liquidation value of a Fund's assets, after
taking into account  unrealized  profits and unrealized losses on such contracts
and  options;  provided,  however,  that  in  the  case  of an  option  that  is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
calculating the 5% limitation.

         In addition,  each of the Funds will comply with guidelines established
by the SEC with  respect to coverage of options and futures  contracts by mutual
funds,  and if the  guidelines  so require,  will set aside  appropriate  liquid
assets in a segregated  custodial account in the amount  prescribed.  Securities
held in a segregated account cannot be sold while the futures contract or option
is  outstanding,  unless they are  replaced  with other  suitable  assets.  As a
result,  there is a  possibility  that  segregation  of a large  percentage of a
Fund's  assets could impede  portfolio  management  or a Fund's  ability to meet
redemption requests or other current obligations.


Risk Management

         The Funds may  employ  non-hedging  risk  management  techniques.  Risk
management  strategies  are used to keep the Funds fully  invested and to reduce
the  transaction  costs  associated  with cash flows into and out of a Fund. The
objective  where  equity  futures  are used to  "equitize"  cash is to match the
notional value of all futures  contracts to a Fund's cash balance.  The notional
value of futures and of the cash is monitored  daily. As the cash is invested in
securities  and/or  paid  out  to  participants  in  redemptions,   the  Advisor
simultaneously  adjusts the futures positions.  Through such procedures,  a Fund
not only gains equity  exposure from the use of futures,  but also benefits from
increased  flexibility  in responding  to client cash flow needs.  Additionally,
because it can be less  expensive to trade a list of  securities as a package or
program trade rather than as a group of  individual  orders,  futures  provide a
means through which  transaction  costs can be reduced.  Such  non-hedging  risk
management  techniques are not  speculative,  but because they involve  leverage
include, as do all leveraged transactions,  the possibility of losses as well as
gains that are greater than if these  techniques  involved the purchase and sale
of the securities themselves rather than their synthetic derivatives.

Portfolio Turnover

         The Funds' portfolio turnover rates are set forth below. A rate of 100%
indicates  that the  equivalent  of all of a Fund's  assets  have  been sold and
reinvested in a year.  High portfolio  turnover may result in the realization of
substantial  net  capital  gains or losses.  To the  extent  that net short term
capital  gains are realized,  any  distributions  resulting  from such gains are
considered ordinary income for federal income tax purposes. See "Taxes" below.

Tax  Aware  Disciplined   Equity  Fund  --  For  the  period  January  30,  1997
(commencement  of operations)  through  October 31, 1997, and the for the fiscal
years ended October 31, 1998 and 1999: 35%, 57% and 40%, respectively.

Tax Aware U.S. Equity Fund -- For the period December 18, 1996  (commencement of
operations) through October 31, 1997, and for the fiscal years ended October 31,
1998 and 1999: 23%, 44% and 29%, respectively.

INVESTMENT RESTRICTIONS

         The  investment  restrictions  set forth below have been adopted by the
Trust with respect to each Fund.  Except as otherwise  noted,  these  investment
restrictions are  "fundamental"  policies which,  under the 1940 Act, may not be
changed without the vote of a majority of the outstanding  voting  securities of
the Funds. A "majority of the outstanding  voting  securities" is defined in the
1940 Act as the lesser of (a) 67% or more of the voting securities  present at a
meeting if the holders of more than 50% of the outstanding voting securities are
present or represented by proxy, or (b) more than 50% of the outstanding  voting
securities. The percentage limitations contained in the restrictions below apply
at the time of purchasing securities to the market value of a Fund's assets.

         The Funds:

     1. May not make any investments  inconsistent with a Fund's  classification
as a diversified investment
company under the Investment Company Act of 1940;

2. May not  purchase any security  which would cause a Fund to  concentrate  its
investments  in the  securities of issuers  primarily  engaged in any particular
industry except as permitted by the SEC;

3. May not issue senior  securities,  except as permitted  under the  Investment
Company Act of 1940 or any rule, order or interpretation thereunder;

4. May not borrow money, except to the extent permitted by applicable law;

5. May not underwrite  securities of other issuers,  except to the extent that a
Fund, in disposing of portfolio securities,  may be deemed an underwriter within
the meaning of the 1933 Act;

6. May not purchase or sell real estate, except that, to the extent permitted by
applicable  law,  a Fund may (a)  invest  in  securities  or  other  instruments
directly or indirectly  secured by real estate,  and (b) invest in securities or
other instruments issued by issuers that invest in real estate;

7. May not purchase or sell  commodities or commodity  contracts unless acquired
as a result of ownership of  securities or other  instruments  issued by persons
that purchase or sell commodities or commodities  contracts;  but this shall not
prevent a Fund from  purchasing,  selling and entering  into  financial  futures
contracts (including futures contracts on indices of securities,  interest rates
and  currencies),  options on financial  futures  contracts  (including  futures
contracts on indices of securities,  interest rates and  currencies),  warrants,
swaps,  forward contracts,  foreign currency spot and forward contracts or other
derivative instruments that are not related to physical commodities; and

8. May make  loans  to  other  persons,  in  accordance  with  their  respective
investment  objectives  and policies and to the extent  permitted by  applicable
law.

         Non-Fundamental  Investment  Restrictions.  The investment restrictions
described below are not fundamental  policies of each Fund and may be changed by
their  Trustees.  These  non-fundamental  investment  policies  require that the
Funds:

(i) May not acquire any illiquid securities,  such as repurchase agreements with
more than seven days to maturity or fixed time  deposits with a duration of over
seven calendar days, if as a result  thereof,  more than 15% of the market value
of a Fund's net assets would be in investments which are illiquid;

(ii) May not purchase securities on margin,  make short sales of securities,  or
maintain a short position, provided that this restriction shall not be deemed to
be  applicable  to the  purchase  or sale of  when-issued  or  delayed  delivery
securities, or to short sales that are covered in accordance with SEC rules; and
(iii)  May not  acquire  securities  of other  investment  companies,  except as
permitted by the 1940 Act or any order pursuant thereto.

         If any percentage restriction described above is adhered to at the time
of investment,  a subsequent  increase or decrease in the  percentage  resulting
from a change in the value of a Fund's assets will not constitute a violation of
the restriction.

         For purposes of fundamental investment  restrictions regarding industry
concentration,  the Advisor may classify  issuers by industry in accordance with
classifications  set forth in the Directory of Companies  Filing Annual  Reports
With The Securities and Exchange  Commission or other sources. In the absence of
such  classification or if the Advisor determines in good faith based on its own
information that the economic characteristics affecting a particular issuer make
it more  appropriately  considered  to be engaged in a different  industry,  the
Advisor may  classify  an issuer  accordingly.  For  instance,  personal  credit
finance  companies  and  business  credit  finance  companies  are  deemed to be
separate  industries and wholly owned finance  companies are considered to be in
the  industry of their  parents if their  activities  are  primarily  related to
financing the activities of their parents.


TRUSTEES AND MEMBERS OF THE ADVISORY BOARD


Trustees

         The Trustees of the Trust, their principal  occupations during the past
five years, business addresses and dates of birth are set forth below.

     FREDERICK S. ADDY--Trustee;  Retired;  Prior to April 1994,  Executive Vice
President and Chief Financial Officer,  Amoco  Corporation.  His address is 5300
Arbutus Cove, Austin, Texas 78746, and his date of birth is January 1, 1932.

     WILLIAM  G.  BURNS--Trustee;   Retired,  Former  Vice  Chairman  and  Chief
Financial Officer,  NYNEX. His address is 2200 Alaqua Drive,  Longwood,  Florida
32779, and his date of birth is November 2, 1932.

     ARTHUR C.  ESCHENLAUER--Trustee;  Retired;  Former  Senior Vice  President,
Morgan  Guaranty  Trust Company of New York. His address is 14 Alta Vista Drive,
RD #2, Princeton, New Jersey 08540, and his date of birth is May 23, 1934.

         MATTHEW   HEALEY1--Trustee,   Chairman  and  Chief  Executive  Officer;
Chairman,  Pierpont Group,  Inc.,  since prior to 1993. His address is Pine Tree
Country Club Estates,  10286 Saint Andrews Road,  Boynton Beach,  Florida 33436,
and his date of birth is August 23, 1937.

     MICHAEL P.  MALLARDI--Trustee;  Retired;  Prior to April 1996,  Senior Vice
President, Capital Cities/ABC, Inc. and President,  Broadcast Group. His address
is 10 Charnwood Drive,  Suffern,  New York 10910, and his date of birth is March
17, 1934.

         Each Trustee is currently paid an annual fee of $75,000 (adjusted as of
April  1,  1997)  for  serving  as  Trustee  of the  Trust,  each of the  Master
Portfolios (as defined  below),  the J.P.  Morgan  Institutional  Funds and J.P.
Morgan Funds and is reimbursed for expenses  incurred in connection with service
as a Trustee.  The Trustees may hold various  other  directorships  unrelated to
these funds.


<PAGE>



     Trustee compensation expenses paid by the Trust for the calendar year ended
December 31, 1999 is set forth below.


<TABLE>
<CAPTION>
<S>                                     <C>                                <C>

- ----------------------------------- ----------------------------- ----------------------------------


                                                                  TOTAL TRUSTEE COMPENSATION
                                                                  ACCRUED BY THE MASTER PORTFOLIOS
                                                                  (*), J.P. MORGAN INSTITUTIONAL
                                                                  FUNDS, J.P. MORGAN FUNDS AND THE
                                    AGGREGATE TRUSTEE             TRUST DURING 1999(**) ____
                                    COMPENSATION
                                    PAID BY THE TRUST DURING
NAME OF TRUSTEE                     1999
- ----------------------------------- ----------------------------- ----------------------------------
- ----------------------------------- ----------------------------- ----------------------------------

Frederick S. Addy, Trustee          $1,018                        $75,000
- ----------------------------------- ----------------------------- ----------------------------------
- ----------------------------------- ----------------------------- ----------------------------------

William G. Burns, Trustee           $1,018                        $75,000
- ----------------------------------- ----------------------------- ----------------------------------
- ----------------------------------- ----------------------------- ----------------------------------

Arthur C. Eschenlauer, Trustee      $1,018                        $75,000
- ----------------------------------- ----------------------------- ----------------------------------
- ----------------------------------- ----------------------------- ----------------------------------

Matthew Healey, Trustee (***)       $1,018                        $75,000
  Chairman and Chief Executive
  Officer
- ----------------------------------- ----------------------------- ----------------------------------
- ----------------------------------- ----------------------------- ----------------------------------

Michael P. Mallardi, Trustee        $1,018                        $75,000
- ----------------------------------- ----------------------------- ----------------------------------
</TABLE>


     (*) Includes each portfolio in which a series of J.P.  Morgan Funds or J.P.
Morgan Institutional Funds invests.

     (**) No  investment  company  within  the fund  complex  has a  pension  or
retirement  plan.  Currently  there are 17 investment  companies (14  investment
companies  comprising the Master  Portfolios,  J.P.  Morgan Funds,  J.P.  Morgan
Institutional Funds and the Trust) in the fund complex.


     (***) During 1999,  Pierpont  Group,  Inc. paid Mr. Healey,  in his role as
Chairman  of  Pierpont  Group,  Inc.,  compensation  in the amount of  $153,800,
contributed  $23,100  to a  defined  contribution  plan on his  behalf  and paid
$17,300 in insurance premiums for his benefit.


         The Trustees  decide upon  general  policies  and are  responsible  for
overseeing  the Trust's  business  affairs.  The Trust has  entered  into a Fund
Services  Agreement  with  Pierpont  Group,  Inc.  to  assist  the  Trustees  in
exercising their overall  supervisory  responsibilities  over the affairs of the
Trust.  Pierpont Group,  Inc. was organized in July 1989 to provide services for
The  Pierpont  Family of Funds (now the J.P.  Morgan  Family of Funds),  and the
Trustees are the equal and sole  shareholders of Pierpont Group,  Inc. The Trust
has  agreed to pay  Pierpont  Group,  Inc. a fee in an amount  representing  its
reasonable  costs in  performing  these  services to the Trust and certain other
registered  investment  companies  subject to similar  agreements  with Pierpont
Group, Inc. These costs are periodically reviewed by the Trustees. The principal
offices of Pierpont Group,  Inc. are located at 461 Fifth Avenue,  New York, New
York 10017.

         The aggregate fees paid to Pierpont Group, Inc. by each Fund during the
indicated fiscal periods are set forth below:


Tax  Aware  Disciplined   Equity  Fund  --  For  the  period  January  30,  1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $157, $1,578 and $4,110, respectively.

Tax Aware U.S. Equity Fund -- For the period December 18, 1996  (commencement of
operations)  through October 31, 1997 and for the fiscal years ended October 31,
1998 and 1999: $451, $1,552 and $2,425, respectively.

Advisory Board

         The Trustees determined as of January 26, 2000 to establish an advisory
board and appoint four members  ("Members of the Advisory Board") thereto.  Each
member  serves at the pleasure of the Trustees.  The advisory  board is distinct
from  the  Trustees  and  provides  advice  to the  Trustees  as to  investment,
management and operations of the Trust; but has no power to vote upon any matter
put to a vote of the Trustees.  The advisory board and the members  thereof also
serve  each of the  Trusts and the  Master  Portfolios.  It is also the  current
intention  of the  Trustees  that the  Members  of the  Advisory  Board  will be
proposed at the next  shareholders'  meeting,  expected to be held within a year
from the date  hereof,  for  election  as Trustees of each of the Trusts and the
Master Portfolios. The creation of the Advisory Board and the appointment of the
members  thereof was  designed so that the Board of Trustees  will  continuously
consist of persons able to assume the duties of Trustees  and be fully  familiar
with the business  and affairs of each of the Trusts and the Master  Portfolios,
in anticipation of the current Trustees reaching the mandatory retirement age of
seventy.  Each member of the Advisory Board is paid an annual fee of $75,000 for
serving in this capacity for the Trust, each of the Master Portfolios,  the J.P.
Morgan Funds and the J.P.  Morgan  Series Trust and is  reimbursed  for expenses
incurred in connection  for such service.  The members of the Advisory Board may
hold various other  directorships  unrelated to these funds. The mailing address
of the Members of the Advisory  Board is c/o  Pierpont  Group,  Inc.,  461 Fifth
Avenue, New York, New York 10017. Their names,  principal occupations during the
past five years and dates of birth are set forth below:

Ann Maynard Gray - President,  Diversified  Publishing Group and Vice President,
Capital Cities/ABC, Inc. Her date of birth is August 22, 1945.

John R. Laird --  Retired;  Former  Chief  Executive  Officer,  Shearson  Lehman
Brothers and The Boston Company. His date of birth is June 21, 1942.

Gerard P. Lynch -- Retired;  Former Managing Director,  Morgan Stanley Group and
President and Chief Operating Officer, Morgan Stanley Services, Inc. His date of
birth is October 5, 1936.


Officers

         The Trust's  executive  officers  (listed below),  other than the Chief
Executive  Officer  and the  officers  who are  employees  of the  Advisor,  are
provided and  compensated by Funds  Distributor,  Inc.  ("FDI"),  a wholly owned
indirect subsidiary of Boston Institutional Group, Inc. The officers conduct and
supervise the business operations of the Trust. The Trust has no employees.

         The officers of the Trust, their principal  occupations during the past
five years and dates of birth are set forth below.  The business address of each
of the officers  unless  otherwise  noted is Funds  Distributor,  Inc., 60 State
Street, Suite 1300, Boston, Massachusetts 02109.

         MATTHEW HEALEY;  Chief  Executive  Officer;  Chairman,  Pierpont Group,
since prior to 1993. His address is Pine Tree Country Club Estates,  10286 Saint
Andrews Road,  Boynton  Beach,  Florida  33436.  His date of birth is August 23,
1937.

     MARGARET W. CHAMBERS;  Vice President and Secretary.  Senior Vice President
and General  Counsel of FDI since April,  1998.  From August 1996 to March 1998,
Ms. Chambers was Vice President and Assistant General Counsel for Loomis, Sayles
& Company,  L.P. From January 1986 to July 1996,  she was an associate  with the
law firm of Ropes & Gray. Her date of birth is October 12, 1959.


         MARIE E. CONNOLLY;  Vice President and Assistant Treasurer.  President,
Chief Executive  Officer,  Chief Compliance Officer and Director of FDI, Premier
Mutual Fund  Services,  Inc.,  an  affiliate  of FDI  ("Premier  Mutual") and an
officer of certain investment companies  distributed or administered by FDI. Her
date of birth is August 1, 1957.


     DOUGLAS C. CONROY; Vice President and Assistant  Treasurer.  Assistant Vice
President   and   Assistant   Department   Manager  of  Treasury   Services  and
Administration of FDI and an officer of certain investment companies distributed
or  administered  by FDI.  Prior to April 1997,  Mr.  Conroy was  Supervisor  of
Treasury  Services and  Administration  of FDI. From April 1993 to January 1995,
Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust Company.  His
date of birth is March 31, 1969.

     JOHN P. COVINO - Vice President and Assistant Treasurer. Vice President and
Treasury Group Manger of Treasury  Servicing and Administration of FDI. Prior to
November  1998,  Mr. Covino was employed by Fidelity  Investments  where he held
multiple  positions in their  Institutional  Brokerage  Group.  Prior to joining
Fidelity,  Mr.  Covino was employed by SunGard  Brokerage  systems  where he was
responsible for the technology and development of the accounting  product group.
His date of birth is October 8, 1963.


         KAREN  JACOPPO-WOOD;  Vice  President  and  Assistant  Secretary.  Vice
President  and  Senior  Counsel  of FDI and an  officer  of  certain  investment
companies  distributed or  administered  by FDI. From June 1994 to January 1996,
Ms. Jacoppo-Wood was a Manager of SEC Registration at Scudder,  Stevens & Clark,
Inc. Her date of birth is December 29, 1966.

     CHRISTOPHER  J.  KELLEY;  Vice  President  and  Assistant  Secretary.  Vice
President and Senior Associate  General Counsel of FDI and Premier Mutual and an
officer of certain investment companies distributed or administered by FDI. From
April 1994 to July 1996,  Mr.  Kelley was Assistant  Counsel at Forum  Financial
Group. His date of birth is December 24, 1964.

     KATHLEEN  K.  MORRISEY;  Vice  President  and  Assistant  Secretary.   Vice
President  and  Assistant   Secretary  of  FDI.  Manager  of  Treasury  Services
Administration  and an  officer  of  certain  investment  companies  advised  or
administered  by  Montgomery  Asset  Management,  L.P.  and  Dresdner RCM Global
Investors,  Inc., and their  respective  affiliates.  From July 1994 to November
1995, Ms.  Morrisey was a Fund Accountant II for Investors Bank & Trust Company.
Her date of birth is July 5, 1972.

     MARY A. NELSON; Vice President and Assistant Treasurer.  Vice President and
Manager of Treasury Services and Administration of FDI and Premier Mutual and an
officer of certain investment companies  distributed or administered by FDI. Her
date of birth is April 22, 1964.


     MARY JO PACE;  Assistant Treasurer.  Vice President,  Morgan Guaranty Trust
Company of New York.  Ms.  Pace  serves in the Funds  Administration  group as a
Manager for the Budgeting and Expense Processing Group. Prior to September 1995,
Ms. Pace served as a Fund Administrator for Morgan Guaranty Trust Company of New
York. Her address is 60 Wall Street, New York, New York 10260. Her date of birth
is March 13, 1966.

     stephanie d. pierce; Vice President and Assistant Secretary. Vice President
and Client  Development  Manager for FDI since  April  1998.  From April 1997 to
March 1998,  Ms.  Pierce was employed by Citibank,  NA as an officer of Citibank
and Relationship  Manager on the Business and Professional Banking team handling
over 22,000 clients.  Address:  200 Park Avenue,  New York, New York 10166.  Her
date of birth is August 18, 1968.


     GEORGE A. RIO; President and Treasurer. Executive Vice President and Client
Service  Director of FDI since April 1998. From June 1995 to March 1998, Mr. Rio
was Senior  Vice  President  and Senior Key Account  Manager  for Putnam  Mutual
Funds. From May 1994 to June 1995, Mr. Rio was Director of Business  Development
for First Data Corporation. His date of birth is January 2, 1955.

     CHRISTINE ROTUNDO;  Assistant  Treasurer.  Vice President,  Morgan Guaranty
Trust Company of New York. Ms. Rotundo serves in the Funds  Administration group
as a Manager  of the Tax  Group  and is  responsible  for U.S.  mutual  fund tax
matters.  Prior to September 1995, Ms. Rotundo served as a Senior Tax Manager in
the Investment  Company  Services Group of Deloitte & Touche LLP. Her address is
60 Wall Street,  New York,  New York 10260.  Her date of birth is September  26,
1965.


INVESTMENT ADVISOR

         The  Trust  has  retained  JPMIM  as  Investment   Advisor  to  provide
investment advice and portfolio management services to the Funds. Subject to the
supervision  of the Fund's  Trustees,  the Advisor makes each Fund's  day-to-day
investment decisions,  arranges for the execution of portfolio  transactions and
generally manages each Fund's investments. Effective October 1, 1998 each Fund's
Investment  Advisor  is JPMIM.  Prior to that date,  Morgan  was the  Investment
Advisor.

         JPMIM,  a wholly owned  subsidiary  of J.P.  Morgan & Co.  Incorporated
("J.P.  Morgan"),  is a  registered  investment  adviser  under  the  Investment
Advisers  Act of  1940,  as  amended,  and  manages  employee  benefit  funds of
corporations,  labor unions and state and local  governments and the accounts of
other institutional  investors,  including investment companies.  Certain of the
assets of  employee  benefit  accounts  under its  management  are  invested  in
commingled pension trust funds for which Morgan serves as trustee.


         J.P.  Morgan,  through  the  Advisor  and other  subsidiaries,  acts as
investment advisor to individuals,  governments,  corporations, employee benefit
plans, mutual funds and other institutional investors with combined assets under
management of approximately $349 billion.


         J.P.  Morgan has a long  history of service as an advisor,  underwriter
and lender to an extensive roster of major companies and as a financial  advisor
to national  governments.  The firm,  through its predecessor firms, has been in
business for over a century and has been managing investments since 1913.

         The basis of the Advisor's investment process is fundamental investment
research because the firm believes that fundamentals should determine an asset's
value over the long  term.  The  Advisor  currently  employs  over 100 full time
research  analysts,  among the largest  research staffs in the money  management
industry,  in its investment  management  divisions located in New York, London,
Tokyo,  Frankfurt and Singapore to cover companies,  industries and countries on
site. In addition,  the investment management divisions employ approximately 300
capital market researchers,  portfolio managers and traders.  The conclusions of
the equity analysts'  fundamental research is quantified into a set of projected
returns for individual  companies  through the use of a dividend discount model.
These returns are projected for 2 to 5 years to enable analysts to take a longer
term view. These returns, or normalized earnings, are used to establish relative
values among stocks in each industrial sector.  These values may not be the same
as the markets' current  valuations of these companies.  This provides the basis
for ranking the attractiveness of the companies in an industry according to five
distinct quintiles or rankings. This ranking is one of the factors considered in
determining the stocks purchased and sold in each sector.

         The investment  advisory services the Advisor provides to the Funds are
not exclusive under the terms of the Investment Advisory Agreement.  The Advisor
is free to and does render similar  investment  advisory services to others. The
Advisor serves as investment  advisor to personal investors and other investment
companies and acts as fiduciary for trusts,  estates and employee benefit plans.
Certain of the assets of trusts and estates  under  management  are  invested in
common trust funds for which the Advisor  serves as trustee.  The accounts which
are managed or advised by the Advisor have varying investment objectives and the
Advisor invests assets of such accounts in investments substantially similar to,
or the same as, those which are expected to constitute the principal investments
of the Funds.  Such  accounts are  supervised  by officers and  employees of the
Advisor  who may  also be  acting  in  similar  capacities  for the  Funds.  See
"Portfolio Transactions."

         Sector  weightings  are  generally  similar  to a  benchmark  with  the
emphasis on security selection as the method to achieve  investment  performance
superior to the benchmark.  The benchmark for the Funds is currently the S&P 500
Index.

         Morgan,  also a  wholly  owned  subsidiary  of J.P.  Morgan,  is a bank
holding company organized under the laws of the State of Delaware. Morgan, whose
principal offices are at 60 Wall Street, New York, New York 10260, is a New York
trust company which  conducts a general  banking and trust  business.  Morgan is
subject to regulation by the New York State Banking  Department  and is a member
bank of the Federal Reserve System. Through offices in New York City and abroad,
Morgan   offers  a  wide  range  of   services,   primarily   to   governmental,
institutional,  corporate and high net worth individual  customers in the United
States and throughout the world.

         The Funds are managed by  officers  of the  Advisor  who, in acting for
their clients,  including the Funds, do not discuss their  investment  decisions
with any personnel of J.P.  Morgan or any  personnel of other  divisions of J.P.
Morgan or with any of its  affiliated  persons,  with the  exception  of certain
investment management affiliates of J.P. Morgan.

         As compensation for the services  rendered and related expenses such as
salaries  of  advisory  personnel  borne  by  the  Advisor  under  the  Advisory
Agreements,  the Funds have agreed to pay the  Advisor a fee,  which is computed
daily and may be paid monthly,  equal to the annual rates of each Fund's average
daily net assets shown below.

Tax Aware Disciplined Equity Fund:  0.35%

Tax Aware U.S. Equity Fund:         0.45%

         The table below sets forth the  advisory  fees paid by each Fund to the
Advisor for the fiscal periods indicated.


Tax  Aware  Disciplined   Equity  Fund  --  For  the  period  January  30,  1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $16,524, $195,083 and $754,945, respectively.

Tax Aware U.S. Equity Fund -- For the period December 18, 1996  (commencement of
operations)  through October 31, 1997 and for the fiscal years ended October 31,
1998 and 1999: $62,523, $243,124 and $554,907, respectively.


         The Investment Advisory Agreement between the Advisor and the Trust, on
behalf of each Fund,  provides  that it will  continue in effect for a period of
two years after execution only if specifically  approved  thereafter annually in
the same manner as the  Distribution  Agreement.  See  "Distributor"  below. The
Investment  Advisory  Agreement will terminate  automatically if assigned and is
terminable  at any time with  respect to a Fund  without  penalty by a vote of a
majority  of the  Trust's  Trustees or by a vote of the holders of a majority of
the Fund's  outstanding  voting  securities  on 60 days'  written  notice to the
Advisor  and by the  Advisor  on 90  days'  written  notice  to  the  Fund.  See
"Additional Information."


         The  Glass-Steagall  Act and other  applicable laws generally  prohibit
banks and their subsidiaries, such as the Advisor, from engaging in the business
of underwriting or  distributing  securities,  and the Board of Governors of the
Federal  Reserve  System has issued an  interpretation  to the effect that under
these laws a bank  holding  company  registered  under the federal  Bank Holding
Company Act or  subsidiaries  thereof may not  sponsor,  organize,  or control a
registered open-end investment company  continuously  engaged in the issuance of
its shares,  such as the Trust. The  interpretation  does not prohibit a holding
company or a subsidiary  thereof from acting as investment advisor and custodian
to such an  investment  company.  The Advisor  believes  that it may perform the
services for the Fund  contemplated by the Advisory  Agreement without violation
of the Glass-Steagall  Act or other applicable  banking laws or regulations.  On
November 12, 1999, the  Gramm-Leach-Bliley Act was signed into law, the relevant
provisions of which go into effect March 11, 2000. Until March 11, 2000, federal
banking law,  specifically the  Glass-Steagall  Act and the Bank Holding Company
Act,   generally   prohibits   banks  and  bank  holding   companies  and  their
subsidiaries, such as the Advisor, from engaging in the business of underwriting
or distributing securities.  Pursuant to interpretations issued under these laws
by the Board of Governors of the Federal Reserve System,  such entities also may
not  sponsor,  organize  or control a  registered  open-end  investment  company
continuously  engaged in the issuance of its shares (together with  underwriting
and distributing securities,  the "Prohibited  Activities"),  such as the Trust.
These  laws and  interpretations  do not  prohibit a bank  holding  company or a
subsidiary  thereof from acting as  investment  advisor and custodian to such an
investment  company.  The Advisor  believes that it may perform the services for
the Fund contemplated by the Advisory Agreement without violation of the laws in
effect  until March 11,  2000.  Effective  March 11,  2000,  the sections of the
Glass-Steagall Act which prohibited the Prohibited Activities are repealed,  and
the Bank Holding  Company Act is amended to permit bank holding  companies which
satisfy certain  capitalization,  managerial and other criteria (the "Criteria")
to engage in the  Prohibited  Activities;  bank holding  companies  which do not
satisfy the Criteria may continue to engage in any activity that was permissible
for a bank holding company under the Bank Holding Company Act as of November 11,
1999.  Because the  services  to be  performed  for the Fund under the  Advisory
Agreement were  permissible  for a bank holding company as of November 11, 1999,
the Advisor believes that it also may perform such services after March 11, 2000
whether or not the Advisor's parent  satisfies the Criteria.  State laws on this
issue may differ from the  interpretation of relevant federal law, and banks and
financial  institutions may be required to register as dealers pursuant to state
securities laws.


         Under separate  agreements,  Morgan provides  certain  financial,  fund
accounting,  administrative and shareholder services to the Trust. See "Services
Agent" and "Shareholder Servicing" below.

DISTRIBUTOR

         FDI  serves as the  Trust's  exclusive  distributor  and  holds  itself
available to receive  purchase orders for each Fund's shares.  In that capacity,
FDI has been  granted  the right,  as agent of the Trust,  to solicit and accept
orders for the purchase of each Fund's  shares in  accordance  with the terms of
the  Distribution  Agreement  between the Trust and FDI.  Under the terms of the
Distribution  Agreement  between FDI and the Trust, FDI receives no compensation
in its capacity as the Funds' distributor.


         The Distribution Agreement will continue in effect with respect to each
Fund for a period of two years after  execution  only if it is approved at least
annually  thereafter  (i) by a vote of the  holders of a majority  of the Fund's
outstanding  voting  securities  or by its  Trustees  and  (ii)  by a vote  of a
majority  of the  Trustees  of the Trust who are not  "interested  persons"  (as
defined by the 1940 Act) of the parties to the Distribution  Agreement,  cast in
person at a meeting  called  for the  purpose  of voting on such  approval  (see
"Trustees and Members of the Advisory Board" and  "Officers").  The Distribution
Agreement  will  terminate  automatically  if  assigned  by  either  party.  The
Distribution  Agreement  is also  terminable  with respect to a Fund at any time
without  penalty by a vote of a majority of the Trustees of the Trust, a vote of
a majority of the Trustees who are not "interested  persons" of the Trust, or by
a vote of (i) 67% or more of the Fund's outstanding voting securities present at
a meeting  if the  holders  of more than 50% of the  Fund's  outstanding  voting
securities  are present or  represented  by proxy,  or (ii) more than 50% of the
Fund's outstanding  voting securities,  whichever is less. FDI is a wholly owned
indirect subsidiary of Boston Institutional Group, Inc. The principal offices of
FDI are located at 60 State Street, Suite 1300, Boston, Massachusetts 02109.


CO-ADMINISTRATOR

         Under a Co-Administration  Agreement with the Trust, FDI also serves as
the Trust's Co-Administrator.  The Co-Administration Agreement may be renewed or
amended  by the  Trustees  without a  shareholder  vote.  The  Co-Administration
Agreement is terminable  at any time without  penalty by a vote of a majority of
the Trustees of the Trust on not more than 60 days' written notice nor less than
30 days' written notice to the other party. The Co-Administrator may subcontract
for the performance of its obligations, provided, however, that unless the Trust
expressly agrees in writing, the Co-Administrator shall be fully responsible for
the acts and  omissions  of any  subcontractor  as it would  for its own acts or
omissions. See "Services Agent" below.


         FDI (i) provides  office space,  equipment  and clerical  personnel for
maintaining the organization  and books and records of the Funds;  (ii) provides
officers  for the  Trust;  (iii)  prepares  and  files  documents  required  for
notification  of  state  securities  administrators;   (iv)  reviews  and  files
marketing  and  sales  literature;  (v)  files  regulatory  documents  and mails
communications  to Trustees,  Members of the Advisory Board and  investors;  and
(vi) maintains related books and records.


         For its services under the Co-Administration  Agreement,  each Fund has
agreed to pay FDI fees equal to its  allocable  share of an annual  complex-wide
charge of $425,000 plus FDI's  out-of-pocket  expenses.  The amount allocable to
each Fund is based on the ratio of the Fund's net  assets to the  aggregate  net
assets of the Trust and certain other registered investment companies subject to
similar arrangements with FDI.

         The table below sets forth for each Fund listed the administrative fees
paid to FDI for the fiscal periods indicated.


     Tax Aware  Disciplined  Equity  Fund:  -- For the period  January  30, 1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $84, $744 and $1,911, respectively.

     Tax  Aware  U.S.   Equity  Fund:  --  For  the  period  December  18,  1996
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $252, $734 and $1,108, respectively.


SERVICES AGENT

         The Trust,  on behalf of each Fund, has entered into an  Administrative
Services  Agreement (the  "Services  Agreement")  with Morgan  pursuant to which
Morgan is responsible for certain  administrative  and related services provided
to each Fund.  The Services  Agreement may be  terminated  at any time,  without
penalty,  by the Trustees or Morgan,  in each case on not more than 60 days' nor
less than 30 days' written notice to the other party.

         Under the Services  Agreement,  Morgan provides certain  administrative
and related services to each Fund, including services related to tax compliance,
preparation of financial statements,  calculation of performance data, oversight
of service providers and certain regulatory and Board of Trustee matters.

         Under the Services  Agreement,  each Fund has agreed to pay Morgan fees
equal to its allocable share of an annual  complex-wide  charge.  This charge is
calculated  daily based on the  aggregate net assets of the Funds and the Master
Portfolios in accordance with the following annual schedule:  0.09% of the first
$7 billion  of their  aggregate  average  daily net  assets,  and 0.04% of their
aggregate  average  daily  net  assets  in  excess  of  $7  billion,   less  the
complex-wide  fees  payable to FDI.  The portion of this charge  payable by each
Fund is  determined by the  proportionate  share that its net assets bear to the
total  net  assets of the Trust  and the  other  investment  companies  provided
administrative services by Morgan.

         The table below sets forth for each Fund listed the fees paid to Morgan
as Services Agent.


     Tax Aware  Disciplined  Equity  Fund:  -- For the period  January  30, 1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $2,693, $32,142 and $111,033, respectively.

     Tax  Aware  U.S.   Equity  Fund:  --  For  the  period  December  18,  1996
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $7,649, $31,306 and $63,722, respectively.


CUSTODIAN AND TRANSFER AGENT


         The Bank of New York  ("BONY"),  One Wall  Street,  New York,  New York
10286,  serves as the Trust's custodian and fund accounting  agent.  Pursuant to
the Custodian and Fund Accounting  Agreement with the Trust, BONY is responsible
for holding  portfolio  securities and cash and maintaining the books of account
and records of the Fund's portfolio transactions.

         State  Street Bank and Trust  Company  ("State  Street"),  225 Franklin
Street, Boston, Massachusetts 02110, serves as the Trust's transfer and dividend
disbursing agent. As transfer agent and dividend  disbursing agent, State Street
is responsible for maintaining  account records  detailing the ownership of Fund
shares  and for  crediting  income,  capital  gains and other  changes  in share
ownership to shareholder accounts.


SHAREHOLDER SERVICING

         The Trust on behalf of each of the Funds has entered into a Shareholder
Servicing  Agreement  with Morgan  pursuant to which Morgan acts as  shareholder
servicing  agent  for  Fund  shareholders.   Under  this  agreement,  Morgan  is
responsible for performing,  directly or through an agent,  shareholder  account
administrative  and  servicing  functions,  which include but are not limited to
answering  inquiries  regarding account status and history,  the manner in which
purchases  and  redemptions  of Fund shares may be effected,  and certain  other
matters  pertaining to a Fund;  assisting  customers in designating and changing
dividend  options,  account  designations  and  addresses;  providing  necessary
personnel and  facilities to coordinate  the  establishment  and  maintenance of
shareholder  accounts and records with the Funds' transfer  agent;  transmitting
purchase and  redemption  orders to the Funds'  transfer agent and arranging for
the  wiring  or  other  transfer  of  funds to and  from  customer  accounts  in
connection with orders to purchase or redeem Fund shares; verifying purchase and
redemption orders, transfers among and changes in accounts; informing FDI of the
gross amount of purchase  orders for Fund shares;  and  providing  other related
services.

         Under the Shareholder  Servicing  Agreement,  the Tax Aware U.S. Equity
Fund has agreed to pay Morgan for these services a fee of 0.25%  (expressed as a
percentage  of the average daily net asset values of Fund shares owned by or for
shareholders  for whom Morgan is acting as  shareholder  servicing  agent);  and
effective October 1, 1998, the Tax Aware  Disciplined  Equity Fund has agreed to
pay Morgan for these  services a fee of 0.10%  (expressed as a percentage of the
average daily net asset values of Fund shares owned by or for  shareholders  for
whom  Morgan  is  acting  as  Shareholder   Servicing  Agent).  Morgan  acts  as
Shareholder Servicing Agent for all shareholders.

         The  table  below  sets  forth  for each Fund  listed  the  shareholder
servicing fees paid by each Fund to Morgan for the fiscal periods indicated.


     Tax Aware  Disciplined  Equity  Fund:  -- For the period  January  30, 1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $11,803, $108,894 and $215,699, respectively.

     Tax  Aware  U.S.   Equity  Fund:  --  For  the  period  December  18,  1996
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $34,735, $135,069 and $308,281, respectively.

         As  discussed  under  "Investment  Advisor,"  until  March 11, 2000 the
Glass-Steagall   Act  and  other  applicable  laws  and  regulations  limit  the
activities  of bank  holding  companies  and  certain of their  subsidiaries  in
connection  with registered  open-end  investment  companies.  The activities of
Morgan in acting as shareholder  servicing agent for Fund shareholders under the
Shareholder Servicing Agreement and for providing administrative services to the
Funds under the Services Agreement,  and JPMIM in acting as Advisor to the Funds
under the  Investment  Advisory  Agreement  may raise  issues  under these laws.
However,  Morgan and JPMIM believe that they may properly perform these services
and the other  activities  described in the Prospectuses  without  violating the
Glass-Steagall  Act or other  applicable  banking laws or  regulations in effect
until March 11, 2000.  Effective  March 11, 2000,  certain of the section of the
Glass-Steagall  Act which limited the  activities of bank holding  companies and
certain of their subsidiaries in connection with open-end  investment  companies
are repealed.


         If Morgan were  prohibited from providing any of the services under the
Shareholder  Servicing and the Services  Agreements,  the Trustees would seek an
alternative  provider of such services.  In such event, changes in the operation
of the  Funds  might  occur and a  shareholder  might no longer be able to avail
himself or herself  of any  services  then being  provided  to  shareholders  by
Morgan.

         The Funds may be sold to or through  financial  intermediaries  who are
customers  of  J.P.  Morgan  ("financial  professionals"),  including  financial
institutions  and  broker-dealers,  that may be paid fees by J.P.  Morgan or its
affiliates for services  provided to their clients that invest in the Funds. See
"Financial  Professionals"  below.  Organizations that provide  recordkeeping or
other services to certain employee benefit or retirement plans that includes the
Funds as an investment alternative may also be paid a fee.

FINANCIAL PROFESSIONALS

         The   services   provided  by  financial   professionals   may  include
establishing  and  maintaining  shareholder  accounts,  processing  purchase and
redemption  transactions,  arranging  for  bank  wires,  performing  shareholder
subaccounting, answering client inquiries regarding the Trust, assisting clients
in changing  dividend  options,  account  designations and addresses,  providing
periodic  statements  showing the client's account balance and integrating these
statements with those of other  transactions  and balances in the client's other
accounts serviced by the financial professional,  transmitting proxy statements,
periodic reports,  updated prospectuses and other communications to shareholders
and,  with  respect to  meetings of  shareholders,  collecting,  tabulating  and
forwarding  executed proxies and obtaining such other information and performing
such other services as J.P. Morgan or the financial  professional's  clients may
reasonably request and agree upon with the financial professional.

         Although  there  is no  sales  charge  levied  directly  by the  Funds,
financial  professionals  may  establish  their  own terms  and  conditions  for
providing their services and may charge investors a  transaction-based  or other
fee for their services.  Such charges may vary among financial professionals but
in all cases will be retained by the financial  professional and not be remitted
to the Fund or J.P. Morgan.

         Each Fund has  authorized  one or more  brokers to accept  purchase and
redemption orders on its behalf.  Such brokers are authorized to designate other
intermediaries  to accept purchase and redemption  orders on a Fund's behalf.  A
Fund will be deemed to have  received a  purchase  or  redemption  order when an
authorized broker or, it applicable, a broker's authorized designee, accepts the
order. These orders will be priced at the Fund's net asset value next calculated
after they are so accepted.

INDEPENDENT ACCOUNTANTS

         The  independent  accountants  of the Trust are  PricewaterhouseCoopers
LLP,   1177   Avenue   of   the   Americas,    New   York,   New   York   10036.
PricewaterhouseCoopers  LLP conducts an annual audit of the financial statements
of each of the Funds,  assists in the  preparation  and/or review of each of the
Fund's  federal and state income tax returns and  consults  with the Funds as to
matters of accounting and federal and state income taxation.

EXPENSES


         In addition to the fees payable to Pierpont Group, Inc., JPMIM,  Morgan
and FDI under various  agreements  discussed  under "Trustees and Members of the
Advisory   Board",   "Officers,"   "Investment   Advisor,"   "Co-Administrator",
"Distributor", "Services Agent" and "Shareholder Servicing" above, the Funds are
responsible  for  usual  and  customary  expenses  associated  with the  Trust's
operations.  Such expenses include organization expenses, legal fees, accounting
and audit  expenses,  insurance  costs,  the  compensation  and  expenses of the
Trustees  and Members of the Advisory  Board,  registration  fees under  federal
securities  laws,  extraordinary  expenses,  transfer,  registrar  and  dividend
disbursing  costs,  the  expenses of printing and mailing  reports,  notices and
proxy  statements  to Fund  shareholders,  fees  under  state  securities  laws,
custodian fees and brokerage expenses.

J.P. Morgan has agreed that it will reimburse the Funds noted below as described
in the Prospectuses  until February 28, 2001 to the extent necessary to maintain
each Fund's  total  operating  expenses at the  following  annual  rates of each
Fund's  average  daily net  assets.  These  limits  do not  cover  extraordinary
expenses.


         Tax Aware Disciplined Equity Fund                    0.55%
         Tax Aware U.S. Equity Fund                           0.85%

         The table  below  sets  forth for each Fund  listed  the fees and other
expenses J.P. Morgan  reimbursed  under the expense  reimbursement  arrangements
described above or pursuant to prior expense reimbursement  arrangements for the
fiscal periods indicated.


     Tax Aware  Disciplined  Equity  Fund:  -- For the period  January  30, 1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $190,599, $261,143 and $207,236, respectively.

     Tax  Aware  U.S.   Equity  Fund:  --  For  the  period  December  18,  1996
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $182,588, $130,293 and $67,977, respectively.


PURCHASE OF SHARES


         Additional  Minimum  Balance  Information.  For investors who purchased
shares of the  Disciplined  Equity  Fund prior to January 2, 1998,  the  minimum
account  balance  will remain  $100,000  and the minimum  subsequent  investment
remains $5,000.


     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.

         Method  of  Purchase.  Investors  may open  accounts  with a Fund  only
through  the  Distributor.  All  purchase  transactions  in  Fund  accounts  are
processed by Morgan as shareholder  servicing  agent and each Fund is authorized
to accept any instructions relating to a Fund account from Morgan as shareholder
servicing  agent for the customer.  All purchase  orders must be accepted by the
Distributor.  Prospective  investors who are not already customers of Morgan may
apply to become  customers of Morgan for the sole purpose of Fund  transactions.
There  are no  charges  associated  with  becoming  a Morgan  customer  for this
purpose.  Morgan  reserves the right to  determine  the  customers  that it will
accept,  and the Funds reserve the right to determine  the purchase  orders that
they will accept.

         References  in  the  Prospectuses  and  this  Statement  of  Additional
Information  to customers  of J.P.  Morgan or a financial  professional  include
customers of their  affiliates and references to  transactions by customers with
J.P.  Morgan  or  a  financial  professional  include  transactions  with  their
affiliates.  Only  Fund  investors  who are using the  services  of a  financial
institution acting as shareholder  servicing agent pursuant to an agreement with
the Trust on behalf of a Fund may make transactions in shares of a Fund.

         Each Fund may,  at its own  option,  accept  securities  in payment for
shares.  The  securities so delivered are valued by the method  described  under
"Net  Asset  Value"  as of the day a Fund  receives  the  securities.  This is a
taxable  transaction to the  shareholder.  Securities may be accepted in payment
for  shares  only if they  are,  in the  judgment  of the  Advisor,  appropriate
investments for a Fund. In addition,  securities  accepted in payment for shares
must: (i) meet the investment objective and policies of the acquiring Fund; (ii)
be acquired by the applicable  Fund for investment and not for resale;  (iii) be
liquid  securities  which are not restricted as to transfer;  and (iv) if stock,
have a value which is readily ascertainable as evidenced by a listing on a stock
exchange,  OTC market or by readily available market quotations from a dealer in
such  securities.  Each Fund  reserves  the right to accept or reject at its own
option any and all securities offered in payment for its shares.

         Prospective  investors  may purchase  shares with the  assistance  of a
Financial  Professional and the Financial Professional may charge the investor a
fee for this  service and other  services it  provides  to its  customers.  J.P.
Morgan may pay fees to financial  professionals  for services in connection with
fund investments. See "Financial Professionals" above.

REDEMPTION OF SHARES

         Investors   may  redeem  shares  of  the  Funds  as  described  in  the
Prospectus.  The Funds  generally  intend to pay  redemption  proceeds  in cash;
however,  they reserve the right at their sole discretion to pay redemption over
$500,000 (in the case of the Tax Aware Disciplined  Equity Fund) or $250,000 (in
the  case  of the  Tax  Aware  U.S.  Equity  Fund)  in-kind  as a  portfolio  of
representative stocks rather than cash. See below and "Exchange of Shares".

         The Trust,  on behalf of each Fund,  reserves  the right to suspend the
right of  redemption  and to postpone  the date of payment  upon  redemption  as
follows:  (i) for up to seven days,  (ii) during periods when the New York Stock
Exchange is closed for other than weekends and holidays or when trading  thereon
is  restricted  as  determined  by the SEC by rule or  regulation,  (iii) during
periods in which an  emergency,  as  determined  by the SEC,  exists that causes
disposal by a Fund of, or  evaluation  of the net asset value of, its  portfolio
securities to be unreasonable or  impracticable,  or (iv) for such other periods
as the SEC may permit.

         If the  Trust  determines  that it  would  be  detrimental  to the best
interest of the remaining  shareholders  of the Funds to make payment  wholly or
partly in cash,  payment of the redemption price may be made in whole or in part
by a  distribution  in kind of  securities  from the Fund,  in lieu of cash.  If
shares are redeemed  in-kind,  the  redeeming  shareholder  might incur costs in
converting  the  assets  into  cash.  The  Trust is in the  process  of  seeking
exemptive relief from the SEC with respect to redemptions  in-kind by the Funds.
If the  requested  relief is granted,  each Fund would then be  permitted to pay
redemptions to greater than 5% shareholders in securities,  rather than in cash,
to the extent  permitted  by the SEC and  applicable  law. The method of valuing
portfolio  securities is described  under "Net Asset Value",  and such valuation
will be made as of the same time the redemption price is determined.

         In  general,  a Fund will  attempt  to select  securities  for  in-kind
redemptions  that  approximate  the  overall   characteristics   of  the  Fund's
portfolio.  A Fund will not distribute  illiquid  securities to satisfy  in-kind
redemptions.  For purposes of effecting in-kind redemptions,  securities will be
valued in the manner  regularly used to value a Fund's portfolio  securities.  A
Fund will not redeem its shares  in-kind in a manner that after giving effect to
the  redemption  would  cause  it to  violate  its  investment  restrictions  or
policies. See the Prospectuses for information on redemptions in-kind.

         Redemption  Fee. A redemption  fee of 1% will be imposed on shares held
for less  than one year and paid to each  Fund on the  gross  dollar  amount  of
shares redeemed for cash.

         The  redemption  fees help  cover  transaction  costs and the tax costs
long-term  investors may bear when a Fund realizes  capital gains as a result of
selling securities to meet redemptions. By being paid directly to the Funds, the
fees tend to be more  advantageous to long-term  investors and less advantageous
to short-term investors.

         There will be no redemption  fee charged on the cash  redemption of (i)
shares acquired  through  reinvested  dividends and  distributions,  (ii) shares
redeemed in connection with the settlement of an estate, or (iii) shares subject
to a mandatory redemption.

         For federal  income tax purposes,  the  redemption  fee will reduce the
proceeds paid to the shareholder upon the redemption of shares.

         Other Redemption Processing Information. Redemption requests may not be
processed  if the  redemption  request  is  not  submitted  in  proper  form.  A
redemption  request  is not in  proper  form  unless  a Fund  has  received  the
shareholder's certified taxpayer identification number and address. In addition,
if shares were paid for by check and the check has not yet  cleared,  redemption
proceeds will not be transmitted until the check has cleared,  which may take up
to 15 days.  Each Fund  reserves the right to suspend the right of redemption or
postpone the payment of redemption  proceeds to the extent permitted by the SEC.
Shareholders may realize taxable gains upon redeeming shares.

         For information  regarding redemption orders placed through a financial
professional, please see "Financial Professionals" above.

EXCHANGE OF SHARES

         Subject to the limitations  below, an investor may exchange shares from
a Fund into any other J.P. Morgan Fund or J.P. Morgan Institutional Fund without
charge.  An exchange  may be made so long as after the exchange the investor has
shares, in each fund in which he or she remains an investor,  with a value of at
least that  fund's  minimum  investment  amount.  Shareholders  should  read the
prospectus  of the fund into which  they are  exchanging  and may only  exchange
between fund accounts that are registered in the same name, address and taxpayer
identification  number.  Shares are exchanged on the basis of relative net asset
value per share. Exchanges are in effect redemptions from one fund and purchases
of  another  fund  and  the  usual  purchase  and   redemption   procedures  and
requirements  are  applicable to exchanges.  The Funds  generally  intend to pay
redemption proceeds in cash; however, since they reserve the right at their sole
discretion  to pay  redemptions  over  $500,000  (in the  case of the Tax  Aware
Disciplined  Equity Fund) or $250,000 (in the case of the Tax Aware U.S.  Equity
Fund) in-kind as a portfolio of  representative  stocks  rather than cash,  each
Fund reserves the right to deny an exchange  request in excess of those amounts.
See  "Redemption  of  Shares".  Shareholders  subject to federal  income tax who
exchange  shares in one fund for shares in another  fund may  recognize  capital
gain or loss for federal  income tax  purposes.  Shares of a fund to be acquired
are purchased for settlement when the proceeds from redemption become available.
In the case of investors in certain states,  state  securities laws may restrict
the  availability  of the exchange  privilege.  The Trust  reserves the right to
discontinue, alter or limit the exchange privilege at any time.

DIVIDENDS AND DISTRIBUTIONS

         Each Fund declares and pays dividends and distributions as described in
the Prospectus.

         A Fund's  dividends and  distributions  are paid in  additional  shares
unless  the  shareholder  elects to have them paid in cash.  The tax  effects of
dividends  and  distributions  are the same  whether  they are paid in shares or
cash.  Cash  dividends  and  distributions   either  (1)  are  credited  to  the
shareholder's account at J.P. Morgan or at his financial  professional or (2) in
the  case of  certain  J.P.  Morgan  clients,  are  paid by a  check  mailed  in
accordance with the client's instructions.

NET ASSET VALUE

         Each of the Funds compute its net asset value separately for each class
of shares  outstanding  once  daily as of the close of  trading  on the New York
Stock  Exchange  (normally  4:00  p.m.  eastern  time) on each  business  day as
described in the Prospectus. The net asset value will not be computed on the day
the following  legal holidays are observed:  New Year's Day,  Martin Luther King
Jr. Day,  Presidents' Day, Good Friday,  Memorial Day,  Independence  Day, Labor
Day, Thanksgiving Day and Christmas Day. On days when U.S. trading markets close
early in observance of these holidays, each of the Fund will close for purchases
and redemptions at the same time. Each of the Funds also may close for purchases
and  redemptions  at such  other  times  as may be  determined  by the  Board of
Trustees to the extent  permitted by applicable law. The days on which net asset
value is determined are the Funds' business days.


         The value of  investments  listed on a domestic  or foreign  securities
exchange,including   National   Association  of  Securities   Dealers  Automated
Quotations ("NASDAQ"), other than options on stock indexes, is based on the last
sale prices on the  exchange on which the  security is  principally  traded (the
"primary  exchange").  If there has been no sale on the primary  exchange on the
valuation  date, and the spread between bid and asked  quotations on the primary
exchange  is less than or equal to 10% of the bid price  for the  security,  the
security shall be valued at the average of the closing bid and asked  quotations
on the primary exchange.  Under all other  circumstances  (e.g. there is no last
sale on the  primary  exchange,  there  are no bid and asked  quotations  on the
primary exchange, or the spread between bid and asked quotations is greater than
10% of the bid price), the value of the security shall be the last sale price on
the primary  exchange up to ten days prior to the valuation date unless,  in the
judgment of the portfolio manager, material events or conditions since such last
sale necessitate fair valuation of the security.  The value of each security for
which readily available market quotations exist is based on a decision as to the
broadest  and most  representative  market for such  security.  For  purposes of
calculating  net asset value all assets and liabilities  initially  expressed in
foreign  currencies  will be  converted  into  U.S.  dollars  at the  prevailing
currency rate average on the valuation date.


         Options on stock indexes  traded on national  securities  exchanges are
valued at the close of options trading on such exchanges which is currently 4:10
p.m. New York time. Stock index futures and related options, which are traded on
commodities  exchanges,  are valued at their last sales price as of the close of
such commodities  exchanges which is currently 4:15 p.m., New York time. Options
and  futures  traded on  foreign  exchanges  are  valued at the last sale  price
available  prior  to  the  calculation  each  of the  Fund's  net  asset  value.
Securities or other assets for which market quotations are not readily available
(including certain restricted and illiquid  securities) are valued at fair value
in accordance with procedures  established by and under the general  supervision
and  responsibility  of  the  Trustees.  Such  procedures  include  the  use  of
independent  pricing  services  which use prices  based upon yields or prices of
securities of comparable quality,  coupon,  maturity and type; indications as to
values from dealers; and general market conditions. Short-term investments which
mature  in 60 days or less  are  valued  at  amortized  cost if  their  original
maturity was 60 days or less, or by amortizing their value on the 61st day prior
to maturity,  if their original maturity when acquired by the Fund was more than
60 days, unless this is determined not to represent fair value by the Trustees.

         Trading in  securities  on most foreign  markets is normally  completed
before the close of trading in U.S.  markets  and may also take place on days on
which the U.S. markets are closed. If events  materially  affecting the value of
securities  occur  between  the time when the  market in which  they are  traded
closes  and the time  when  each  Fund's  net asset  value is  calculated,  such
securities   will  be  valued  at  fair  value  in  accordance  with  procedures
established by and under the general supervision of the Trustees.

PERFORMANCE DATA

     From  time to time,  the Funds  may  quote  performance  in terms of actual
distributions, total return or capital appreciation for the various Fund classes
in reports, sales literature and advertisements  published by the Trust. Current
performance  information may be obtained by calling Morgan at (800) 766-7722 for
J.P. Morgan Tax Aware Disciplined  Equity Fund:  Institutional  Shares and (800)
521-5411 for J.P. Morgan Tax Aware U.S. Equity Fund: Select Shares.

         The  classes  of  shares of each  Fund may bear  different  shareholder
servicing fees and other expenses, which may cause the performance of a class to
differ from the  performance of another class.  Performance  quotations  will be
computed  separately for each class of a Fund's  shares.  Any fees charged by an
institution  directly to its customers'  accounts in connection with investments
in the Funds will not be included in calculations of total return.

         Total Return Quotations. As required by regulations of the SEC, average
annual  total  return of each Fund's class of shares for a period is computed by
assuming a hypothetical  initial payment of $1,000.  It is then assumed that all
of the dividends and  distributions  by the Fund over the period are reinvested.
It is then assumed that at the end of the period, the entire amount is redeemed.
The average  annual total return is then  calculated by  determining  the annual
rate  required  for the initial  payment to grow to the amount  which would have
been received upon redemption.

         Aggregate total returns,  reflecting the cumulative  percentage  change
over a measuring period, may also be calculated.

         Below is set forth historical return  information for the Funds for the
periods indicated:


     Tax Aware Disciplined Equity Fund (10/31/99):  Average annual total return,
1 year: 24.72%;  average annual total return, 5 years: N/A; average annual total
return,  commencement  of operations  (January 30, 1997) to period end:  25.24%;
aggregate total return, 1 year:  24.72%;  aggregate total return, 5 years:  N/A;
aggregate total return,  commencement of operations (January 30, 1997) to period
end: 85.70%.

     Tax Aware U.S. Equity Fund (10/31/99): Average annual total return, 1 year:
24.05%;  average annual total return, 5 years: N/A; average annual total return,
commencement of operations (December 18, 1996) to period end: 25.11%;  aggregate
total return, 1 year:  24.05%;  aggregate total return, 5 years: N/A;  aggregate
total  return,  commencement  of  operations  (December 18, 1996) to period end:
90.14%.


         General.  Performance will vary from time to time depending upon market
conditions,   the  composition  of  the  portfolio,   and  operating   expenses.
Consequently,   any  given  performance   quotation  should  not  be  considered
representative  of a Fund's  performance for any specified period in the future.
In addition,  because performance will fluctuate, it may not provide a basis for
comparing  an  investment  in  a  Fund  with  certain  bank  deposits  or  other
investments that pay a fixed yield or return for a stated period of time.

         Comparative  performance  information  may be used from time to time in
advertising the Funds' shares,  including  appropriate  market indices including
the benchmarks  indicated under  "Investment  Advisor" above or data from Lipper
Analytical  Services,  Inc., Micropal,  Inc., Ibbotson  Associates,  Morningstar
Inc., the Dow Jones Industrial Average and other industry publications.

         From time to time, the Funds may, in addition to any other  permissible
information,  include the  following  types of  information  in  advertisements,
supplemental  sales literature and reports to  shareholders:  (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost  averaging);  (2)  discussions  of general  economic
trends;  (3)  presentations of statistical data to supplement such  discussions;
(4)  descriptions of past or anticipated  portfolio  holdings for one or more of
the Funds;  (5)  descriptions  of investment  strategies  for one or more of the
Funds;  (6)  descriptions  or  comparisons  of various  savings  and  investment
products  (including,  but  not  limited  to,  qualified  retirement  plans  and
individual  stocks and  bonds),  which may or may not  include  the  Funds;  (7)
comparisons of investment  products  (including the Funds) with relevant markets
or industry  indices or other  appropriate  benchmarks;  (8) discussions of Fund
rankings or ratings by recognized rating  organizations;  and (9) discussions of
various  statistical  methods  quantifying a Fund's  volatility  relative to its
benchmark or to past performance,  including risk adjusted  measures.  The Funds
may also include calculations,  such as hypothetical compounding examples, which
describe   hypothetical   investment  results  in  such   communications.   Such
performance  examples will be based on an express set of assumptions and are not
indicative of the performance of any of the Funds.

PORTFOLIO TRANSACTIONS

     The  Advisor  places  orders for all Funds for all  purchases  and sales of
portfolio  securities,  enters  into  repurchase  agreements  and may enter into
reverse  repurchase  agreements  and execute  loans of portfolio  securities  on
behalf of all the Funds. See "Investment Objectives and Policies."

         Fixed income and debt  securities  are generally  traded at a net price
with  dealers  acting  as  principal  for their  own  accounts  without a stated
commission. The price of the security usually includes profit to the dealers. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of  compensation  to the  underwriter,  generally  referred  to as the
underwriter's  concession or discount.  On occasion,  certain  securities may be
purchased directly from an issuer, in which case no commissions or discounts are
paid. The Advisor intends to seek best execution on a competitive basis for both
purchases and sales of securities.

         In  selecting  a broker,  the  Advisor  considers  a number of  factors
including:  the price per unit of the  security;  the broker's  reliability  for
prompt, accurate confirmations and on-time delivery of securities;  the broker's
financial  condition;  and  the  commissions  charged.  A  broker  may be paid a
brokerage  commission in excess of that which another  broker might have charged
for effecting the same transaction if, after considering the foregoing  factors,
the Advisor decides that the broker chosen will provide the best execution.  The
Advisor monitors the  reasonableness of the brokerage  commissions paid in light
of  the  execution   received.   The  Trust's   Trustees  review  regularly  the
reasonableness  of commissions and other transaction costs incurred by the Funds
in light of facts and  circumstances  deemed  relevant from time to time and, in
that connection,  will receive reports from Morgan and published data concerning
transaction costs incurred by institutional investors generally.

         Research  services  provided  by  brokers  to  which  the  Advisor  has
allocated  brokerage  business  in the  past  include  economic  statistics  and
forecasting  services,   industry  and  company  analyses,   portfolio  strategy
services,  quantitative  data,  and  consulting  services  from  economists  and
political  analysts.  Research  services  furnished  by brokers are used for the
benefit of all of the Advisor's  clients and not solely or  necessarily  for the
benefit of an individual  Fund. the Advisor  believes that the value of research
services  received is not  determinable  and does not  significantly  reduce its
expenses.  The Funds do not reduce  their fee to the  Advisor by any amount that
might be attributable to the value of such services.

         The Funds paid the following  approximate brokerage commissions for the
indicated fiscal periods:


     Tax  Aware  Disciplined  Equity  Fund:  For the  period  January  30,  1997
(commencement  of operations)  through October 31, 1997 and for the fiscal years
ended October 31, 1998 and 1999: $2,800, $59,170 and $188,634, respectively.

     Tax Aware U.S. Equity Fund: For the period December 18, 1996  (commencement
of operations)  through  October 31, 1997 and for the fiscal years ended October
31, 1998 and 1999: $4,971, $48,738 and $76,033, respectively.


         Subject to the overriding  objective of obtaining the best execution of
orders, the Advisor may allocate a portion of a Fund's brokerage transactions to
affiliates of the Advisor.  Under the 1940 Act, persons affiliated with the Fund
and persons who are  affiliated  with such persons are  prohibited  from dealing
with the Fund as  principal  in the  purchase  and sale of  securities  unless a
permissive order allowing such  transactions is obtained from the SEC.  However,
affiliated   persons  of  the  Fund  may  serve  as  its  broker  in  listed  or
over-the-counter  transactions conducted on an agency basis provided that, among
other  things,  the fee or  commission  received  by such  affiliated  broker is
reasonable and fair compared to the fee or commission received by non-affiliated
brokers in connection with comparable transactions. In addition, the Fund may no
purchase securities during the existence of any underwriting  syndicate for such
securities  of which the  Advisor  or an  affiliate  is a member or in a private
placement in which the Advisor or an affiliate  serves as placement agent except
pursuant to procedures  adopted by the Board of Trustees of the Fund that either
comply with rules adopted by the SEC or with interpretations of the SEC's staff.

         Investment  decisions  made  by the  Advisor  are the  product  of many
factors in addition to basic suitability for the particular Fund or other client
in  question.  Thus,  a  particular  security  may be bought or sold for certain
clients  even though it could have been bought or sold for other  clients at the
same time. Likewise, a particular security may be bought for one or more clients
when one or more other clients are selling the same security. The Funds may only
sell a security to each other or to other accounts managed by the Advisor or its
affiliates in accordance with procedures adopted by the Trustees.

         It also  sometimes  happens  that  two or more  clients  simultaneously
purchase or sell the same  security.  On those  occasions when the Advisor deems
the  purchase or sale of a security to be in the best  interests  of a Fund,  as
well as other clients including other Funds, the Advisor to the extent permitted
by applicable laws and regulations,  may, but is not obligated to, aggregate the
securities to be sold or purchased for a Fund with those to be sold or purchased
for other clients in order to obtain best  execution,  including lower brokerage
commissions  if  appropriate.  In such event,  allocation  of the  securities so
purchased or sold as well as any expenses  incurred in the  transaction  will be
made  by the  Advisor  in the  manner  it  considers  to be most  equitable  and
consistent  with  the  Advisor  's  fiduciary  obligations  to a  Fund.  In some
instances, this procedure might adversely affect a Fund.

MASSACHUSETTS TRUST

         The Trust is a  "Massachusetts  business trust" of which each Fund is a
separate and distinct  series.  A copy of the Declaration of Trust for the Trust
is on file in the office of the Secretary of The Commonwealth of  Massachusetts.
Under  Massachusetts  law,  shareholders  of such a  trust  may,  under  certain
circumstances,  be held personally liable as partners for the obligations of the
trust.  However, the Trust's Declaration of Trust provides that the shareholders
will not be subject to any personal liability for the acts or obligations of any
Fund and that every written  agreement,  obligation,  instrument or  undertaking
made on behalf  of any Fund will  contain a  provision  to the  effect  that the
shareholders are not personally liable thereunder.

         Effective  May 12, 1997,  the name of the U.S.  Equity Fund was changed
from "Tax Aware Equity Fund" to "Tax Aware U.S. Equity Fund".  Effective January
1, 1998,  the name of the Trust was  changed  from "JPM  Series  Trust" to "J.P.
Morgan  Series  Trust",  the name of the U.S.  Equity Fund was changed from "Tax
Aware U.S. Equity Fund" to "J.P. Morgan Tax Aware U.S. Equity Fund", the name of
the Disciplined Equity Fund was changed from "Tax Aware Disciplined Equity Fund"
to "J.P.  Morgan Tax Aware  Disciplined  Equity Fund", the "JPM Pierpont Shares"
were  renamed  "Select  Shares",   and  "JPM  Pierpont  Shares"  of  "Tax  Aware
Disciplined Equity Fund" were renamed "Institutional Shares" of "J.P. Morgan Tax
Aware Disciplined Equity Fund".


         The Trust's  Declaration  of Trust  further  provides  that no Trustee,
Member of the Advisory Board, officer, employee, or agent of the Trust is liable
to a Fund or to a  shareholder,  and that no  Trustee,  Member  of the  Advisory
Board, officer,  employee, or agent is liable to any third persons in connection
with the affairs of a Fund,  except as such  liability may arise from his or its
own bad faith,  willful  misfeasance,  gross negligence or reckless disregard of
his or its duties to such third persons ("disabling conduct").  It also provides
that all third  persons must look solely to Fund  property for  satisfaction  of
claims arising in connection with the affairs of a Fund. The Trust's Declaration
of Trust  provides  that a  Trustee,  Member  of the  Advisory  Board,  officer,
employee,  or agent is  entitled to be  indemnified  against  all  liability  in
connection with the affairs of a Fund, except liabilities arising from disabling
conduct.



DESCRIPTION OF SHARES

     Each Fund represents a separate series of shares of beneficial  interest of
the  Trust.  Fund  shares  are  further  divided  into  separate  classes.   See
"Massachusetts Trust."

         The  Declaration  of Trust  permits the  Trustees to issue an unlimited
number of full and  fractional  shares  ($0.001 par value) of one or more series
and classes  within any series and to divide or combine the shares of any series
without changing the proportionate  beneficial interest of each shareholder in a
Fund.  To date,  shares of each Fund  described in this  Statement of Additional
Information  have been  authorized  and are currently  available for sale to the
public.

         Each share  represents  an equal  proportional  interest in a Fund with
each other  share of the same class.  Upon  liquidation  of a Fund,  holders are
entitled  to  share  pro  rata  in  the  net  assets  of a  Fund  available  for
distribution  to such  shareholders.  Shares  of a Fund  have no  preemptive  or
conversion rights.

         The  shareholders  of the Trust are entitled to one full or  fractional
vote for each dollar or fraction of a dollar invested in shares.  Subject to the
1940 Act,  the  Trustees  have the power to alter  the  number  and the terms of
office of the Trustees,  to lengthen their own terms,  or to make their terms of
unlimited duration,  subject to certain removal procedures, and to appoint their
own  successors.  However,  immediately  after such  appointment,  the requisite
majority  of the  Trustees  must have been  elected by the  shareholders  of the
Trust. The voting rights of shareholders are not cumulative.  The Trust does not
intend to hold annual meetings of  shareholders.  The Trustees may call meetings
of  shareholders  for action by shareholder  vote if required by either the 1940
Act or the Trust's Declaration of Trust.

         Shareholders  of the Trust  have the  right,  upon the  declaration  in
writing or vote of  shareholders  whose shares  represent  two-thirds of the net
asset value of the Trust, to remove a Trustee.  The Trustees will call a meeting
of  shareholders to vote on removal of a Trustee upon the written request of the
shareholders whose shares represent 10% of the net asset value of the Trust. The
Trustees are also required, under certain circumstances,  to assist shareholders
in communicating with other shareholders.


         As of  January  31,  2000,  the  following  owned of record  or, to the
knowledge  of  management,  beneficially  owned more than 5% of the  outstanding
shares of:

     Tax Aware U.S.  Equity  Fund - Charles  Schwab & Co. Inc.  Special  Custody
Account for the benefit of Customers
(13.16%).

     Tax Aware  Disciplined  Equity  Fund - Charles  Schwab & Co.  Inc.  Special
Custody  Account for the benefit of  Customers  (30.78%);  American  Contractors
Insurance Group (6.38%).

         The address of each owner listed above is c/o JPMIM,  522 Fifth Avenue,
New  York,  New York  10036.  As of the  date of this  Statement  of  Additional
Information the officers,  Trustees and Members of the Advisory Board as a group
owned less than 1% of the beneficial shares of each Fund.



TAXES

         The following  discussion of tax  consequences is based on U.S. federal
tax laws in  effect on the date of this  Statement  of  Additional  Information.
These  laws  and   regulations   are  subject  to  change  by   legislative   or
administrative action, possibly on a retroactive basis.

         Each Fund  intends  to  qualify  and remain  qualified  as a  regulated
investment  company under  Subchapter M of the Code.  As a regulated  investment
company,  a Fund must, among other things,  (a) derive at least 90% of its gross
income from  dividends,  interest,  payments  with respect to loans of stock and
securities,  gains from the sale or other disposition of stock or securities and
other  income  (including  but not  limited to gains from  options  and  futures
contracts)  derived  with  respect to its business of investing in such stock or
securities;  and (b)  diversify  its holdings so that, at the end of each fiscal
quarter,  (i) at least 50% of the value of a Fund's total assets is  represented
by cash, U.S. Government  securities,  investments in other regulated investment
companies  and other  securities  limited,  in respect of any one issuer,  to an
amount not greater than 5% of a Fund's total assets,  and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of its
total assets is invested in the  securities  of any one issuer  (other than U.S.
Government   securities  or  the  securities  of  other   regulated   investment
companies).

         As  a  regulated   investment  company,  a  Fund  (as  opposed  to  its
shareholders)  will not be subject to federal income taxes on the net investment
income and capital gains that it distributes to its shareholders,  provided that
at least 90% of its net investment  income and realized net  short-term  capital
gains  in  excess  of net  long-term  capital  losses  for the  taxable  year is
distributed in accordance with the Code's requirements.

         Under the Code,  a Fund will be subject to a 4% excise tax on a portion
of its  undistributed  taxable  income  and  capital  gains  if it fails to meet
certain  distribution  requirements  by the end of the calendar year.  Each Fund
intends to make distributions in a timely manner and accordingly does not expect
to be subject to the excise tax.

         For federal income tax purposes,  dividends that are declared by a Fund
in October,  November or December as of a record date in such month and actually
paid in  January of the  following  year will be treated as if they were paid on
December 31 of the year  declared.  Therefore,  such dividends will generally be
taxable to a shareholder in the year declared rather than the year paid.


         For federal income tax purposes,  the Tax Aware U.S.  Equity Fund had a
capital loss  carryforward  of  $5,184,197 at October 31, 1999, of which $81,365
will  expire in the year 2005 and  $498,314  will  expire in the year 2006,  and
$4,604,518 will expire in the year 2007. In addition,  the Tax Aware Disciplined
Equity had a capital loss  carryforward  of $802,394 at October 31, 1999,  which
will expire in the year 2006.  To the extent that this  capital  loss is used to
offset future capital gains, it is probable that the gains so offset will not be
distributed to shareholders.


         Distributions  of net  investment  income and realized  net  short-term
capital  gain in excess of net  long-term  capital  loss  generally  taxable  to
shareholders  of the Funds as ordinary  income  whether such  distributions  are
taken in cash or  reinvested  in  additional  shares.  The Funds  expect  that a
portion of these  distributions to corporate  shareholders  will be eligible for
the  dividends-received  deduction,  subject to applicable limitations under the
Code. If dividend payments exceed income earned by a Fund, the  overdistribution
would be  considered  a return of capital  rather than a dividend  payment.  The
Funds intend to pay dividends in such a manner so as to minimize the possibility
of a return of capital.  Distributions of net long-term  capital gain (i.e., net
long-term capital gain in excess of net short-term  capital loss) are taxable to
shareholders  of a Fund as long-term  capital  gain,  regardless of whether such
distributions  are  taken  in  cash  or  reinvested  in  additional  shares  and
regardless  of how long a  shareholder  has held  shares in a Fund.  In general,
long-term  capital gain of an  individual  shareholder  will be subject to a 20%
rate of tax.

         Gains or losses on sales of  portfolio  securities  will be  treated as
long-term capital gains or losses if the securities have been held for more than
one year except in certain cases where,  if  applicable,  a put is acquired or a
call  option is  written  thereon  or the  straddle  rules  described  below are
otherwise  applicable.  Other gains or losses on the sale of securities  will be
short-term capital gains or losses. Gains and losses on the sale, lapse or other
termination  of options on  securities  will be treated as gains and losses from
the sale of  securities.  Except as described  below,  if an option written by a
Fund lapses or is terminated through a closing transaction, such as a repurchase
by the Fund of the option from its holder,  the Fund will  realize a  short-term
capital gain or loss, depending on whether the premium income is greater or less
than the amount paid by the Fund in the closing  transaction.  If securities are
purchased by a Fund  pursuant to the  exercise of a put option  written by it, a
Fund will subtract the premium  received  from its cost basis in the  securities
purchased.

         Any  distribution  of net investment  income or capital gains will have
the effect of reducing the net asset value of Fund shares held by a  shareholder
by the same amount as the distribution.  If the net asset value of the shares is
reduced  below a  shareholder's  cost as a result  of such a  distribution,  the
distribution, although constituting a return of capital to the shareholder, will
be taxable as described  above.  Investors  should consider the  consequences of
purchasing  shares  in the Fund  shortly  before  the Fund  declares  a  sizable
dividend distribution.

         Any gain or loss realized on the  redemption or exchange of Fund shares
by a shareholder  who is not a dealer in securities will be treated as long-term
capital  gain or loss if the shares  have been held for more than one year,  and
otherwise  as  short-term  capital  gain or loss.  Long-term  capital gain of an
individual  holder is  subject  to maximum  tax rate of 20%.  However,  any loss
realized by a shareholder  upon the redemption or exchange of shares in the Fund
held for six months or less will be treated as a long-term  capital  loss to the
extent of any long-term capital gain  distributions  received by the shareholder
with  respect  to such  shares.  In  addition,  no loss will be  allowed  on the
redemption or exchange of shares of a Fund, if within a period beginning 30 days
before the date of such  redemption  or  exchange  and ending 30 days after such
date,  the  shareholder   acquires  (such  as  through  dividend   reinvestment)
securities that are substantially identical to shares of the Fund. Investors are
urged  to  consult  their  tax  advisors   concerning  the  limitations  on  the
deductibility of capital losses.

         Under  the  Code,  gains or  losses  attributable  to  fluctuations  in
exchange rates between the time a Fund accrues income or receivables or expenses
or other  liabilities  denominated  in a  foreign  currency  and the time a Fund
actually collects such income or pays such liabilities, are generally treated as
ordinary income or ordinary loss. Similarly,  gains or losses on the disposition
of debt securities held by a Fund, if any,  denominated in foreign currency,  to
the  extent   attributable   to  fluctuations  in  exchange  rates  between  the
acquisition and disposition dates are also treated as ordinary income or loss.

         Options  and  futures  contracts  entered  into  by a Fund  may  create
"straddles"  for U.S.  federal  income  tax  purposes  and this may  affect  the
character  and timing of gains or losses  realized  by the Fund on  options  and
futures contracts or on the underlying securities.

         Certain  options and futures  held by a Fund at the end of each taxable
fiscal year will be  required  to be "marked to market"  for federal  income tax
purposes -- i.e.,  treated as having been sold at market value.  For options and
futures contracts,  60% of any gain or loss recognized on these deemed sales and
on actual  dispositions  will be treated as long-term  capital gain or loss, and
the remainder will be treated as short-term  capital gain or loss  regardless of
how long the Fund has held such options or futures.

         The Funds may invest in Equity Securities of foreign issuers. If a Fund
purchases  shares in certain  foreign  investment  funds (referred to as passive
foreign investment companies ("PFICs") under the Code), a Fund may be subject to
federal  income tax on a portion of an "excess  distribution"  from such foreign
investment  fund,  including any gain from the disposition of such shares,  even
though such income may have to be distributed as a taxable dividend by a Fund to
its shareholders. In addition, certain interest charges may be imposed on a Fund
as a  result  of  such  distributions.  Alternatively,  a Fund  may  in  certain
circumstances  include each year in its income and distribute to  shareholders a
pro rata portion of the PFIC's income, whether or not distributed to a Fund.

         The Funds will be  permitted to "mark to market" any  marketable  stock
held by a Fund in a PFIC.  If a Fund made such an election,  it would include in
income each year an amount equal to its share of the excess, if any, of the fair
market  value of the PFIC  stock as of the  close of the  taxable  year over the
adjusted  basis of such stock. A Fund would be allowed a deduction for its share
of the  excess,  if any, of the  adjusted  basis of the PFIC stock over its fair
market value as of the close of the taxable year,  but only to the extent of any
net mark-to-market  gains with respect to the stock included by a Fund for prior
taxable years.

         If a correct and  certified  taxpayer  identification  number is not on
file,  a Fund is  required,  subject to certain  exemptions,  to withhold 31% of
certain payments made or distributions declared to non-corporate shareholders.

         Foreign   Shareholders.   Dividends  of  net   investment   income  and
distributions of realized net short-term gain in excess of net long-term loss to
a shareholder who, as to the United States,  is a nonresident  alien individual,
fiduciary  of  a  foreign  trust  or  estate,  foreign  corporation  or  foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax at
the rate of 30% (or lower  treaty  rate) unless the  dividends  are  effectively
connected  with a U.S. trade or business of the  shareholder,  in which case the
dividends  will be subject to tax on a net income basis at the  graduated  rates
applicable to U.S. individuals or domestic  corporations.  Distributions treated
as long term capital gains to foreign  shareholders  will not be subject to U.S.
tax unless the  distributions  are effectively  connected with the shareholder's
trade or business in the United States or, in the case of a shareholder who is a
nonresident alien  individual,  the shareholder was present in the United States
for more than 182 days during the taxable year and certain other  conditions are
met.

         In  the  case  of a  foreign  shareholder  who is a  nonresident  alien
individual or foreign  entity,  a Fund may be required to withhold U.S.  federal
income tax as "backup withholding" at the rate of 31% from distributions treated
as long-term capital gains from the proceeds of redemptions,  exchanges or other
dispositions  of Fund shares unless IRS Form W-8 is provided.  Transfers by gift
of  shares  of a  Fund  by a  foreign  shareholder  who is a  nonresident  alien
individual will not be subject to U.S. federal gift tax, but the value of shares
of a Fund held by such a  shareholder  at his or her death will be includible in
his or her gross estate for U.S. federal estate tax purposes.

         State and Local Taxes. Each Fund may be subject to state or local taxes
in  jurisdictions  in which a Fund is deemed to be doing business.  In addition,
the treatment of a Fund and its  shareholders  in those states which have income
tax laws  might  differ  from  treatment  under  the  federal  income  tax laws.
Shareholders  should consult their own tax advisors with respect to any state or
local taxes.

         Other  Taxation.  The Trust is  organized as a  Massachusetts  business
Trust and,  under current law,  neither the Trust nor any Fund is liable for any
income or franchise tax in The Commonwealth of Massachusetts, provided that each
Fund continues to qualify as a regulated  investment  company under Subchapter M
of the Code.

ADDITIONAL INFORMATION

         Telephone  calls to the Funds,  J.P. Morgan or State Street may be tape
recorded.  With respect to the  securities  offered  hereby,  this  Statement of
Additional  Information  and the  Prospectus do not contain all the  information
included in the Trust's registration statement filed with the SEC under the 1933
Act and the Trust's registration statement filed under the 1940 Act. Pursuant to
the rules and regulations of the SEC,  certain  portions have been omitted.  The
registration statement including the exhibits filed therewith may be examined at
the office of the SEC in Washington, D.C.

         Statements  contained in this Statement of Additional  Information  and
the Prospectus concerning the contents of any contract or other document are not
necessarily  complete,  and in each  instance,  reference is made to the copy of
such  contract  or  other  document  filed  as  an  exhibit  to  the  applicable
Registration Statements.
Each such statement is qualified in all respects by such reference.

         No dealer, salesman or any other person has been authorized to give any
information or to make any  representations,  other than those  contained in the
Prospectus and this Statement of Additional Information,  in connection with the
offer  contained  therein  and,  if given or made,  such  other  information  or
representations  must not be relied upon as having been authorized by any of the
Trust,  the  Funds or FDI.  The  Prospectus  and this  Statement  of  Additional
Information  do not constitute an offer by any Fund or by FDI to sell or solicit
any offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is  unlawful  for the Fund or FDI to make  such  offer in such
jurisdictions. FINANCIAL STATEMENTS

         The following financial  statements of each Fund and the report thereon
of  PricewaterhouseCoopers  LLP are incorporated  herein by reference from their
respective  annual report filings made with the SEC pursuant to Section 30(b) of
the 1940 Act and Rule 30b2-1 thereunder.  Additionally, the financial statements
of each  Fund  are  incorporated  herein  by  reference  from  their  respective
semi-annual  report  filings made with the SEC pursuant to Section  30(b) of the
1940 Act and Rule 30b2-1 thereunder.  Any of the following financial reports are
available  without  charge upon request by calling J.P.  Morgan Fund Services at
(800) 766-7722 for Tax Aware Disciplined Equity Fund:  Institutional  Shares and
(800) 521-5411 for Tax Aware U.S. Equity Fund: Select Shares.

<TABLE>
<CAPTION>
<S>                                     <C>


- ----------------------------------- ----------------------------------------------------------
                                    Date of Annual Report; Date Annual Report Filed; and
Name of Fund                        Accession Number
- ----------------------------------- ----------------------------------------------------------
- -----------------------------------
Tax Aware Disciplined Equity Fund   10/31/99; 1/05/00;
                                    0000912057-00-000267
- -----------------------------------
- ----------------------------------- ----------------------------------------------------------
Tax Aware U.S. Equity Fund          10/31/99; 1/05/00;
                                    0000912057-00-000266
- ----------------------------------- ----------------------------------------------------------
</TABLE>



<PAGE>

APPENDIX A

Description of Securities Ratings

STANDARD & POOR'S

Corporate and Municipal Bonds

AAA           - Debt rated AAA has the  highest  ratings  assigned by Standard &
              Poor's to a debt  obligation.  Capacity to pay  interest and repay
              principal is extremely strong.

AA            - Debt rated AA has a very  strong  capacity to pay  interest  and
              repay  principal and differs from the highest rated issues only in
              a small degree.

A             - Debt rated A has a strong  capacity  to pay  interest  and repay
              principal  although it is somewhat more susceptible to the adverse
              effects of changes in circumstances  and economic  conditions than
              debt in higher rated categories.

BBB           - Debt rated BBB is regarded as having an adequate capacity to pay
              interest  and  repay  principal.   Whereas  it  normally  exhibits
              adequate  protection  parameters,  adverse economic  conditions or
              changing  circumstances  are  more  likely  to lead to a  weakened
              capacity  to pay  interest  and repay  principal  for debt in this
              category than for debt in higher rated categories.

BB-B          - Debt rated BB and B is regarded,  on balance,  as  predominantly
              speculative with respect to the issuer's  capacity to pay interest
              and  repay   principal  in  accordance   with  the  terms  of  the
              obligation.  BB indicates the lowest degree of speculation.  While
              such  debt  will   likely  have  some   quality   and   protective
              characteristics,  these are outweighed by large  uncertainties  or
              major risk exposures to adverse conditions.

Commercial Paper, including Tax Exempt

A             - Issues  assigned this highest  rating are regarded as having the
              greatest capacity for timely payment.  Issues in this category are
              further refined with the  designations 1, 2, and 3 to indicate the
              relative degree of safety.

A-1 - This  designation  indicates  that the degree of safety  regarding  timely
payment is very strong.

Short-Term Tax-Exempt Notes

SP-1          - The  short-term  tax-exempt  note  rating of SP-1 is the highest
              rating  assigned  by  Standard & Poor's  and has a very  strong or
              strong  capacity  to pay  principal  and  interest.  Those  issues
              determined  to possess  overwhelming  safety  characteristics  are
              given a "plus" (+) designation.

     SP-2 - The  short-term  tax-exempt  note rating of SP-2 has a  satisfactory
capacity to pay principal and interest.



MOODY'S

Corporate and Municipal Bonds

Aaa           - Bonds which are rated Aaa are judged to be of the best  quality.
              They  carry  the  smallest  degree  of  investment  risk  and  are
              generally  referred  to as  "gilt  edge."  Interest  payments  are
              protected  by a large or by an  exceptionally  stable  margin  and
              principal  is secure.  While the various  protective  elements are
              likely to  change,  such  changes  as can be  visualized  are most
              unlikely  to impair  the  fundamentally  strong  position  of such
              issues.

Aa            - Bonds which are rated Aa are judged to be of high quality by all
              standards.  Together  with the Aaa group  they  comprise  what are
              generally known as high grade bonds. They are rated lower than the
              best bonds because margins of protection may not be as large as in
              Aaa  securities or  fluctuation  of protective  elements may be of
              greater  amplitude or there may be other  elements  present  which
              make  the  long  term  risks  appear  somewhat  larger  than in Aa
              securities.

A             - Bonds  which  are  rated A  possess  many  favorable  investment
              attributes  and  are  to  be  considered  as  upper  medium  grade
              obligations. Factors giving security to principal and interest are
              considered  adequate but elements may be present  which  suggest a
              susceptibility to impairment sometime in the future.

Baa           - Bonds  which  are  rated  Baa are  considered  as  medium  grade
              obligations,  i.e.,  they are neither highly  protected nor poorly
              secured.  Interest payments and principal security appear adequate
              for the present but certain protective  elements may be lacking or
              may be  characteristically  unreliable  over any  great  length of
              time. Such bonds lack outstanding  investment  characteristics and
              in fact have speculative characteristics as well.

Ba            -  Bonds  which  are  rated  Ba are  judged  to  have  speculative
              elements; their future cannot be considered as well-assured. Often
              the  protection  of interest  and  principal  payments may be very
              moderate,  and thereby not well  safeguarded  during both good and
              bad times over the future.  Uncertainty of position  characterizes
              bonds in this class.

B             - Bonds  which are rated B  generally  lack  characteristics  of a
              desirable investment. Assurance of interest and principal payments
              or of  maintenance  of other terms of the  contract  over any long
              period of time may be small.

Commercial Paper, including Tax Exempt

Prime-1               -   Issuers   rated   Prime-1   (or   related   supporting
                      institutions)  have a superior  capacity for  repayment of
                      short-term  promissory   obligations.   Prime-1  repayment
                      capacity  will  normally  be  evidenced  by the  following
                      characteristics:

     - Leading market positions in well established industries.  - High rates of
return on funds employed. - Conservative capitalization structures with moderate
reliance  on debt and  ample  asset  protection.  - Broad  margins  in  earnings
coverage of fixed financial  charges and high internal cash  generation.  - Well
established  access to a range of  financial  markets  and  assured  sources  of
alternate liquidity.

Short-Term Tax Exempt Notes

MIG-1         - The  short-term  tax-exempt  note  rating  MIG-1 is the  highest
              rating  assigned  by  Moody's  for  notes  judged  to be the  best
              quality.  Notes with this  rating  enjoy  strong  protection  from
              established  cash  flows  of funds  for  their  servicing  or from
              established and broad-based  access to the market for refinancing,
              or both.

     MIG-2 -  MIG-2  rated  notes  are of  high  quality  but  with  margins  of
protection not as large as MIG-1.


- --------
         1Mr.  Healey is an "interested  person" (as defined in the 1940 Act) of
the Trust.  Mr.  Healey is also an  "interested  person" (as defined in the 1940
Act) of the Advisor due to his son's affiliation with JPMIM.


<PAGE>








                            J.P. MORGAN SERIES TRUST


                    J.P. MORGAN INSTITUTIONAL SMARTINDEX FUND


                       STATEMENT OF ADDITIONAL INFORMATION






                                  MARCH 1, 2000



THIS  STATEMENT  OF  ADDITIONAL  INFORMATION  IS NOT A  PROSPECTUS  BUT CONTAINS
ADDITIONAL  INFORMATION  WHICH  SHOULD BE READ IN  CONJUNCTION  WITH THE  FUND'S
PROSPECTUS DATED MARCH 1, 2000, AS SUPPLEMENTED FROM TIME TO TIME. ADDITIONALLY,
THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY REFERENCE THE FINANCIAL
STATEMENTS INCLUDED IN THE SHAREHOLDER REPORT RELATING TO THE FUND DATED MAY 31,
1999 AND NOVEMBER 30,  1999.  THE  PROSPECTUS  AND THESE  FINANCIAL  STATEMENTS,
INCLUDING  THE  INDEPENDENT   ACCOUNTANT'S   REPORT  ON  THE  ANNUAL   FINANCIAL
STATEMENTS, ARE AVAILABLE,  WITHOUT CHARGE, UPON REQUEST FROM FUNDS DISTRIBUTOR,
INC., 60 STATE STREET, SUITE 1300, BOSTON,  MASSACHUSETTS 02109, ATTENTION: J.P.
MORGAN SERIES TRUST (800) 221-7930.




<PAGE>


Table of Contents                                                       Page

GENERAL---------------------------------------------------------------------1
INVESTMENT              OBJECTIVES           AND
POLICIES------------------------------------------------1
INVESTMENT
RESTRICTIONS----------------------------------------------------------16
TRUSTEES                AND             ADVISORY
BOARD------------------------------------------------------18
OFFICERS---------------------------------------------------------------------21
INVESTMENT
ADVISOR---------------------------------------------------------------24
DISTRIBUTOR----------------------------------------------------------------27
CO-ADMINISTRATOR-----------------------------------------------------------27
SERVICES
AGENT-------------------------------------------------------------------28
CUSTODIAN               AND             TRANSFER
AGENT-----------------------------------------------------28
SHAREHOLDER
SERVICING------------------------------------------------------------29
FINANCIAL
PROFESSIONALS----------------------------------------------------------30
INDEPENDENT
ACCOUNTANTS----------------------------------------------------------31
EXPENSES---------------------------------------------------------------------31
PURCHASE                                      OF
SHARES---------------------------------------------------------------31
REDEMPTION                                    OF
SHARES-------------------------------------------------------------32
EXCHANGE                                      OF
SHARES---------------------------------------------------------------33
DIVIDENDS                                    AND
DISTRIBUTIONS------------------------------------------------------34
NET                                        ASSET
VALUE------------------------------------------------------------------34
PERFORMANCE
DATA-----------------------------------------------------------------35
PORTFOLIO
TRANSACTIONS-----------------------------------------------------------37
MASSACHUSETTS
TRUST--------------------------------------------------------------39
DESCRIPTION                                   OF
SHARES------------------------------------------------------------39
TAXES------------------------------------------------------------------------40
ADDITIONAL
INFORMATION-----------------------------------------------------------45
FINANCIAL
STATEMENTS------------------------------------------------------------------45
APPENDIX         A     DESCRIPTION          OF         SECURITIES
RATINGS-------------------------------------------------------A-1


<PAGE>


GENERAL

         J.P. Morgan  Institutional  SmartIndex Fund (the "Fund") is a series of
J.P. Morgan Series Trust, an open-end management investment company organized as
a Massachusetts business trust (the "Trust"). To date, the Trustees of the Trust
have authorized the issuance of two classes of shares--Institutional  Shares and
Select Shares. The Fund currently offers Institutional Shares only.

         This  Statement  of  Additional  Information  describes  the  financial
history, investment objective and policies, management and operation of the Fund
and provides additional  information with respect to the Fund and should be read
in  conjunction   with  the  Fund's  current   prospectus  (the   "Prospectus").
Capitalized  terms not otherwise  defined  herein have the meanings  assigned to
them in the Prospectus.  The Trust's  executive  offices are located at 60 State
Street, Suite 1300, Boston, Massachusetts 02109.

     The Fund is advised by J.P. Morgan  Investment  Management Inc. ("JPMIM" or
the "Advisor").

         Shares of the Fund are not deposits or obligations of, or guaranteed or
  endorsed  by any bank.  Shares of the Fund are not  federally  insured  by the
  Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
  governmental  agency.  An  investment  in the Fund is subject to risk that may
  cause  the  value  of the  investment  to  fluctuate,  and at the  time  it is
  redeemed, be higher or lower than the amount originally invested.

INVESTMENT OBJECTIVES AND POLICIES

         The following discussion  supplements the information in the Prospectus
regarding the investment objective and policies of the Fund.

         The Fund is designed for investors  seeking a  consistently  high total
return  from  a  broadly  diversified  portfolio  of  approximately  350  equity
securities with risk characteristics  similar to the Standard & Poor's 500 Stock
Index ("S&P 500").

         The  various  types of  securities  in which  the Fund may  invest  are
described below.

Equity Investments

         The Fund invests primarily in equity securities consisting of U.S. and,
to a lesser  extent,  foreign  common  stocks and other  securities  with equity
characteristics  which are  comprised  of  preferred  stock,  warrants,  rights,
convertible securities, trust certifications,  limited partnership interests and
investment company securities  (collectively,  "Equity Securities").  The Equity
Securities   in   which   the  Fund   invests   may   include   exchange-traded,
over-the-counter  ("OTC") and unlisted common and preferred stocks. A discussion
of the various  types of equity  investments  that may be  purchased by the Fund
appears below. See also "Quality and Diversification Requirements."

     Equity  Securities.  The Equity Securities in which the Fund may invest may
or may not pay  dividends and may or may not carry voting  rights.  Common stock
occupies the most junior position in a company's capital structure.

         The  convertible  securities  in which the Fund may invest  include any
debt securities or preferred stock,  which may be converted into common stock or
which carry the right to purchase common stock.  Convertible  securities entitle
the holder to exchange the securities for a specified number of shares of common
stock,  usually of the same company, at specified prices within a certain period
of time.

         The  terms of any  convertible  security  determine  its  ranking  in a
company's capital structure. In the case of subordinated convertible debentures,
the holders'  claims on assets and earnings  are  subordinated  to the claims of
other   creditors  and  are  senior  to  the  claims  of  preferred  and  common
shareholders. In the case of convertible preferred stock, the holders' claims on
assets and  earnings are  subordinated  to the claims of all  creditors  and are
senior to the claims of common shareholders.

Common Stock Warrants

         The Fund may invest in common stock warrants that entitle the holder to
buy common  stock from the issuer at a specific  price (the strike  price) for a
specific period of time. The market price of warrants may be substantially lower
than the current market price of the underlying  common stock,  yet warrants are
subject  to  similar  price  fluctuations.  As a  result,  warrants  may be more
volatile investments than the underlying common stock.

         Warrants  generally  do not entitle the holder to  dividends  or voting
rights with  respect to the  underlying  common stock and do not  represent  any
rights in the assets of the issuer company.  A warrant will expire  worthless if
it is not exercised prior to the expiration date.

Foreign Investments

         The  Fund  may  invest  up to 20% of its  total  assets  at the time of
purchase,  in  securities  of foreign  issuers.  This 20% limit is  designed  to
accommodate   the   increased   globalization   of  companies  as  well  as  the
re-domiciling  of companies  for tax  treatment  purposes.  It is not  currently
expected to be used to increase direct non-U.S. exposure.

         Investors  should  realize that the value of the Fund's  investments in
foreign  securities may be adversely  affected by changes in political or social
conditions,   diplomatic  relations,   confiscatory   taxation,   expropriation,
nationalization,  limitation on the removal of funds or assets, or imposition of
(or change in) exchange  control or tax regulations in those foreign  countries.
In  addition,  changes in  government  administrations  or  economic or monetary
policies  in the  United  States  or abroad  could  result  in  appreciation  or
depreciation of portfolio  securities and could favorably or unfavorably  affect
the Fund's operations.  Furthermore, the economies of individual foreign nations
may differ from the U.S.  economy,  whether  favorably or unfavorably,  in areas
such  as  growth  of  gross  national  product,   rate  of  inflation,   capital
reinvestment, resource self-sufficiency and balance of payments position; it may
also be more  difficult  to  obtain  and  enforce a  judgment  against a foreign
issuer. Any foreign investments made by the Fund must be made in compliance with
U.S. and foreign currency  restrictions and tax laws restricting the amounts and
types of foreign investments.

         Foreign  investments  may be made  directly  in  securities  of foreign
issuers  or in the  form of  American  Depository  Receipts  ("ADRs"),  European
Depository  Receipts ("EDRs") and Global  Depository  Receipts ("GDRs") or other
similar securities of foreign issuers. ADRs are securities typically issued by a
U.S. financial institution (a "depository") that evidence ownership interests in
a security or a pool of securities issued by a foreign issuer and deposited with
the depository.  ADRs include  American  Depository  Shares and New York Shares.
EDRs are receipts issued by a European  financial  institution.  GDRs (sometimes
referred  to  as  Continental   Depository  Receipts  ("CDRs"))  are  securities
typically issued by a non-U.S.  financial  institution  that evidence  ownership
interests  in a  security  or a pool of  securities  issued by either a U.S.  or
foreign  issuer.  ADRs,  EDRs,  GDRs and CDRs may be  available  for  investment
through  "sponsored"  or  "unsponsored"  facilities.  A  sponsored  facility  is
established  jointly by the issuer of the security  underlying the receipt and a
depository,  whereas an unsponsored  facility may be established by a depository
without participation by the issuer of the receipt's underlying security.

         Holders of an unsponsored  depository  receipt generally bear all costs
of  the  unsponsored  facility.   The  depository  of  an  unsponsored  facility
frequently  is under no  obligation  to  distribute  shareholder  communications
received  from the issuer of the  deposited  security or to pass through  voting
rights to the holders of the receipts with respect to the deposited securities.

Additional Investments


         When-Issued  and Delayed  Delivery  Securities.  The Fund may  purchase
securities on a when-issued or delayed delivery basis. For example,  delivery of
and payment for these  securities  can take place a month or more after the date
of the purchase commitment. The purchase price and the interest rate payable, if
any, on the securities are fixed on the purchase  commitment date or at the time
the settlement date is fixed.  The value of such securities is subject to market
fluctuation  and no  interest  will  accrue to the Fund until  settlement  takes
place.  At the time the Fund makes the  commitment  to purchase  securities on a
when-issued  or delayed  delivery  basis,  it will  record the  transaction  and
reflect  the value  each day of such  securities  in  determining  its net asset
value. At the time of settlement,  a when-issued  security may be valued at less
than the purchase price. To facilitate such acquisitions, the Fund will maintain
with the custodian a segregated  account with liquid assets,  consisting of cash
or other liquid assets, in an amount at least equal to such commitments.  If the
Fund chooses to dispose of the right to acquire a when-issued  security prior to
its acquisition, it could (as with the disposition of any other fund obligation)
incur  a  gain  or  loss  due to  market  fluctuation.  Also,  the  Fund  may be
disadvantaged if the other party to the transaction defaults.

         Investment Company Securities. Securities of other investment companies
may be acquired by the Fund to the extent permitted under the Investment Company
Act of 1940,  as  amended  (the "1940  Act").  These  limits  require  that,  as
determined  immediately  after a purchase  is made,  (i) not more than 5% of the
value of the Fund's total assets will be invested in the  securities  of any one
investment  company,  (ii) not more  than 10% of the value of the  Fund's  total
assets will be invested in the aggregate in  securities of investment  companies
as a group,  and (iii) not more than 3% of the  outstanding  voting stock of any
one  investment  company will be owned by the Fund. As a shareholder  of another
investment company, the Fund would bear, along with other shareholders,  its pro
rata portion of the other  investment  company's  expenses,  including  advisory
fees.  These  expenses  would be in addition to the advisory and other  expenses
that the Fund bears directly in connection with its own operations.

         The Securities and Exchange  Commission ("SEC") has granted the Fund an
exemptive  order  permitting  it to  invest  its  uninvested  cash in any of the
following  affiliated money market funds: J.P. Morgan  Institutional Prime Money
Market Fund, J.P. Morgan Institutional Tax Exempt Money Market Fund, J.P. Morgan
Institutional  Federal Money Market Fund and J.P. Morgan Institutional  Treasury
Money Market Fund.  The order sets the following  conditions:  (1) the Portfolio
may invest in one or more of the permitted money market funds up to an aggregate
limit of 25% of its assets;  and (2) the Advisor will waive and/or reimburse its
advisory fee from the  Portfolio in an amount  sufficient to offset any doubling
up of investment  advisory and  shareholder  servicing  fees.  The Portfolio has
applied for additional  exemptive relief from the SEC to permit the Portfolio to
invest in additional affiliated investment companies. If the requested relief is
granted,  the  Portfolio  would then be permitted to invest in non-money  market
affiliated  funds,  subject to certain  conditions  specified in the  applicable
order.


         Reverse  Repurchase  Agreements.   The  Fund  may  enter  into  reverse
repurchase  agreements.  In a reverse  repurchase  agreement,  the Fund  sells a
security and agrees to repurchase  the same  security at a mutually  agreed upon
date and price,  reflecting  the  interest  rate  effective  for the term of the
agreement.  For purposes of the 1940 Act, a reverse repurchase  agreement may be
deemed  to be a  borrowing  of  money  by the  Fund  and,  therefore,  a form of
leverage.  Leverage may cause any gains or losses for the Fund to be  magnified.
The Fund will  invest  the  proceeds  of  borrowings  under  reverse  repurchase
agreements. In addition, the Fund will enter into a reverse repurchase agreement
only when the expected  return to be earned from the  investment of the proceeds
is greater than the interest expense of the transaction.  The Fund may not enter
into reverse repurchase  agreements  exceeding in the aggregate one-third of the
market value of its total assets less liabilities (other than reverse repurchase
agreements and other borrowings). See "Investment Restrictions."

         Loans  of  Portfolio  Securities.  The  Fund is  permitted  to lend its
securities in an amount up to 33-1/3% of the value of the Fund's net assets. The
Fund may lend its securities if such loans are secured  continuously  by cash or
equivalent  collateral  or by a letter  of  credit in favor of the Fund at least
equal at all times to 100% of the market value of the  securities  loaned,  plus
accrued  interest.  While such securities are on loan, the borrower will pay the
Fund any income  accruing  thereon.  Loans will be subject to termination by the
Fund in the normal settlement time, (generally three business days after notice)
or by the borrower on one day's  notice.  Borrowed  securities  must be returned
when  the  loan is  terminated.  Any  gain or loss in the  market  price  of the
borrowed  securities  that occurs during the term of the loan inures to the Fund
and its  respective  shareholders.  The Fund  may pay  reasonable  finders'  and
custodial  fees in connection  with a loan. In addition,  the Fund will consider
all facts and  circumstances  before entering into such an agreement,  including
the creditworthiness of the borrowing financial  institution,  and the Fund will
not make any loans in excess of one year.  The Fund will not lend its securities
to any officer,  Trustee,  Member of the Advisory Board,  Director,  employee or
other  affiliate  of the Fund,  the  Advisor or the Fund's  distributor,  unless
otherwise permitted by applicable law.

         Illiquid   Investments;   Privately   Placed  and  Other   Unregistered
Securities.  The Fund may not acquire any  illiquid  securities  if, as a result
thereof,  more  than 15% of its net  assets  would be in  illiquid  investments.
Subject  to  this  non-fundamental  policy  limitation,  the  Fund  may  acquire
investments that are illiquid or have limited liquidity, such as certain private
placements or investments  that are not  registered  under the Securities Act of
1933, as amended (the "1933 Act"),  and cannot be offered for public sale in the
United  States  without first being  registered  under the 1933 Act. An illiquid
investment is any investment that cannot be disposed of within seven days in the
normal course of business at  approximately  the amount at which it is valued by
the Fund.  The price the Fund pays for  illiquid  securities  or  receives  upon
resale may be lower than the price paid or received for similar  securities with
a more liquid  market.  Accordingly,  the  valuation  of these  securities  will
reflect any limitations on their liquidity.

         As to illiquid  investments,  these restricted  holdings are subject to
the risk that the Fund  will not be able to sell them at a price the Fund  deems
representative of their value. If a restricted  holding must be registered under
the 1933 Act,  before it may be sold,  the Fund may be  obligated  to pay all or
part of the  registration  expenses.  Also,  a  considerable  period  may elapse
between the time of the  decision to sell and the time the Fund is  permitted to
sell a holding  under an  effective  registration  statement.  If during  such a
period adverse market  conditions were to develop,  the Fund might obtain a less
favorable price than prevailed when it decided to sell.

Money Market Instruments

         Although the Fund intends, under normal circumstances and to the extent
practicable,  to be fully invested in equity securities,  the Fund may invest in
money  market  instruments  to  invest  temporary  cash  balances,  to  maintain
liquidity  to  meet  redemptions  or  as  a  defensive  measure  during,  or  in
anticipation of, adverse market  conditions.  A description of the various types
of money market instruments that may be purchased by the Fund appears below. See
"Quality and Diversification Requirements."

     U.S. Treasury Securities.  The Fund may invest in direct obligations of the
U.S.  Treasury,  including  Treasury  bills,  notes and bonds,  all of which are
backed as to principal and interest payments by the full faith and credit of the
United States.

         Additional  U.S.  Government  Obligations.   The  Fund  may  invest  in
obligations   issued   or   guaranteed   by   U.S.    Government   agencies   or
instrumentalities. These obligations may or may not be backed by the "full faith
and credit" of the United States.  Securities which are backed by the full faith
and credit of the United States include  obligations of the Government  National
Mortgage  Association,  the Farmers Home  Administration  and the  Export-Import
Bank. In the case of  securities  not backed by the full faith and credit of the
United States,  the Fund must look  principally to the federal agency issuing or
guaranteeing the obligation for ultimate repayment and may not be able to assert
a  claim   against  the  United  States  itself  in  the  event  the  agency  or
instrumentality does not meet its commitments.  Securities in which the Fund may
invest  that are not backed by the full  faith and  credit of the United  States
include,  but are not  limited  to:  (i)  obligations  of the  Tennessee  Valley
Authority,  the Federal Home Loan  Mortgage  Corporation,  the Federal Home Loan
Banks and the U.S.  Postal  Service,  each of which has the right to borrow from
the U.S. Treasury to meet its obligations; (ii) securities issued by the Federal
National  Mortgage  Association,   which  are  supported  by  the  discretionary
authority of the U.S. Government to purchase the agency's obligations; and (iii)
obligations  of the Federal Farm Credit  System and the Student  Loan  Marketing
Association,  each of whose  obligations may be satisfied only by the individual
credit of the issuing agency.

         Bank Obligations.  Unless otherwise noted below, the Fund may invest in
negotiable  certificates of deposit,  time deposits and bankers'  acceptances of
(i) banks,  savings and loan associations and savings banks which have more than
$2 billion in total assets and are organized under the laws of the United States
or any state,  (ii)  foreign  branches  of these  banks or of  foreign  banks of
equivalent  size (Euros) and (iii) U.S.  branches of foreign banks of equivalent
size  (Yankees).  The Fund will not invest in obligations for which the Advisor,
or any of its affiliated persons, is the ultimate obligor or accepting bank. The
Fund may also  invest  in  obligations  of  international  banking  institutions
designated   or  supported   by  national   governments   to  promote   economic
reconstruction,  development  or  trade  between  nations  (e.g.,  the  European
Investment Bank, the Inter-American Development Bank, or the World Bank).

         Commercial  Paper. The Fund may invest in commercial  paper,  including
master  demand  obligations.  Master demand  obligations  are  obligations  that
provide for a periodic  adjustment  in the  interest  rate paid and permit daily
changes in the amount  borrowed.  Master  demand  obligations  are  governed  by
agreements  between  the issuer and Morgan  Guaranty  Trust  Company of New York
("Morgan"),  an affiliate of the Advisor acting as agent, for no additional fee.
The monies loaned to the borrower  come from  accounts  managed by Morgan or its
affiliates,  pursuant to arrangements with such accounts. Interest and principal
payments  are  credited  to such  accounts.  Morgan has the right to increase or
decrease the amount  provided to the borrower under an obligation.  The borrower
has the right to pay  without  penalty all or any part of the  principal  amount
then outstanding on an obligation together with interest to the date of payment.
Since these obligations  typically provide that the interest rate is tied to the
Federal  Reserve  commercial  paper  composite  rate,  the rate on master demand
obligations  is subject to change.  Repayment of a master  demand  obligation to
participating accounts depends on the ability of the borrower to pay the accrued
interest  and  principal  of the  obligation  on demand,  which is  continuously
monitored by Morgan. Since master demand obligations  typically are not rated by
credit rating agencies, the Fund may invest in such unrated obligations only if,
at the time of investment, the obligation is determined by the Advisor to have a
credit quality which satisfies the Fund's quality restrictions. See "Quality and
Diversification  Requirements." Although there is no secondary market for master
demand  obligations,  such  obligations  are considered by the Fund to be liquid
because  they are  payable  upon  demand.  The Fund  does not have any  specific
percentage  limitation  on  investments  in  master  demand  obligations.  It is
possible  that the  issuer of a master  demand  obligation  could be a client of
Morgan to whom Morgan, in its capacity as a commercial bank, has made a loan.

         Repurchase  Agreements.  The Fund may enter into repurchase  agreements
with brokers,  dealers or banks that meet the credit guidelines  approved by the
Trust's  Trustees.  In a repurchase  agreement,  the Fund buys a security from a
seller that has agreed to repurchase the same security at a mutually agreed upon
date and price.  The resale price  normally is in excess of the purchase  price,
reflecting an agreed upon interest rate. This interest rate is effective for the
period of time the  agreement is in effect and is not related to the coupon rate
on the underlying security. A repurchase agreement may also be viewed as a fully
collateralized  loan of money by the Fund to the  seller.  The  period  of these
repurchase  agreements will usually be short, from overnight to one week, and at
no time will the Fund invest in  repurchase  agreements  for more than  thirteen
months. The securities which are subject to repurchase agreements,  however, may
have maturity dates in excess of thirteen  months from the effective date of the
repurchase  agreement.  The Fund will always  receive  securities  as collateral
whose market value is, and during the entire term of the agreement  remains,  at
least equal to 100% of the dollar amount  invested by the Fund in each agreement
plus accrued  interest,  and the Fund will make payment for such securities only
upon physical delivery or upon evidence of book entry transfer to the account of
the custodian.  If the seller defaults, the Fund might incur a loss if the value
of the  collateral  securing the repurchase  agreement  declines and might incur
disposition costs in connection with liquidating the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization  upon  disposal  of the  collateral  by the Fund may be  delayed  or
limited.

Quality and Diversification Requirements

         The Fund intends to meet the  diversification  requirements of the 1940
Act. Current 1940 Act diversification  requirements require that with respect to
75% of the assets of the Fund:  (1) the Fund may not invest  more than 5% of its
total assets in the securities of any one issuer, except obligations of the U.S.
Government,  its  agencies and  instrumentalities,  and (2) the Fund may not own
more than 10% of the outstanding voting securities of any one issuer. As for the
other 25% of the Fund's assets not subject to the  limitation  described  above,
there is no limitation on investment of these assets under the 1940 Act, so that
all of such assets may be invested in securities of any one issuer.  Investments
not subject to the  limitations  described above could involve an increased risk
to the Fund should an issuer, or a state or its related  entities,  be unable to
make  interest  or  principal  payments  or  should  the  market  value  of such
securities decline.

     The Fund will also comply with the diversification  requirements imposed by
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company. See "Taxes."

         The Fund may invest in convertible debt securities, for which there are
no specific quality  requirements.  In addition, at the time the Fund invests in
any commercial paper, bank obligation or repurchase  agreement,  the issuer must
have  outstanding  debt rated A or higher by  Moody's  Investors  Service,  Inc.
("Moody's")  or Standard & Poor's  Ratings Group  ("S&P"),  the issuer's  parent
corporation,  if any, must have  outstanding  commercial  paper rated Prime-1 by
Moody's or A-1 by S&P, or if no such ratings are available,  the investment must
be of comparable quality in the Advisor's opinion.  At the time the Fund invests
in any  other  short-term  debt  securities,  they  must be rated A or higher by
Moody's or S&P, or if unrated,  the investment must be of comparable  quality in
the Advisor's opinion.

         In  determining  suitability  of  investment  in a  particular  unrated
security,  the Advisor takes into consideration asset and debt service coverage,
the purpose of the  financing,  history of the issuer,  existence of other rated
securities of the issuer, and other relevant  conditions,  such as comparability
to other issuers.

Options and Futures Transactions

         The Fund may use  futures  contracts  and  options for hedging and risk
management purposes, although it currently intends only to use futures contracts
and only for the purpose of "equitizing" cash as described below.
The Fund may not use futures contracts and options for speculation.

         The Fund  intends  to use  futures  contracts  to keep  the Fund  fully
invested and to reduce the transaction costs associated with cash flows into and
out of the Fund. The objective  where equity futures are used to "equitize" cash
is to match the  notional  value of all  futures  contracts  to the Fund's  cash
balance.  The notional value of futures and of the cash is monitored  daily.  As
the  cash  is  invested  in  securities  and/or  paid  out  to  participants  in
redemptions,  the Advisor simultaneously adjusts the futures positions.  Through
such  procedures,  the Fund  not  only  gains  equity  exposure  from the use of
futures,  but also benefits from  increased  flexibility in responding to client
cash flow needs. Additionally,  because it can be less expensive to trade a list
of securities as a package or program trade rather than as a group of individual
orders,  futures provide a means through which transaction costs can be reduced.
Such  non-hedging risk management  techniques are not  speculative,  but because
they involve leverage include, as do all leveraged transactions, the possibility
of losses as well as gains that are greater  than if these  techniques  involved
the purchase and sale of the securities  themselves  rather than their synthetic
derivatives.

         The Fund may use options and futures  contracts  to manage its exposure
to changing  security  prices.  Some options and futures  strategies,  including
selling futures contracts and buying puts, tend to hedge the Fund's  investments
against  price   fluctuations.   Other  strategies,   including  buying  futures
contracts,  writing puts and calls,  and buying calls,  tend to increase  market
exposure.  Options and futures contracts may be combined with each other or with
forward contracts in order to adjust the risk and return  characteristics of the
Fund's  overall  strategy  in a manner  deemed  appropriate  to the  Advisor and
consistent  with the Fund's  objective and policies.  Because  combined  options
positions involve multiple trades,  they result in higher  transaction costs and
may be more difficult to open and close out.

         The use of options and futures is a highly  specialized  activity which
involves  investment  strategies and risks different from those  associated with
ordinary portfolio securities  transactions,  and there can be no guarantee that
their use will increase the Fund's return. While the use of these instruments by
the  Fund  may  reduce  certain  risks  associated  with  owning  its  portfolio
securities,  these  techniques  themselves  entail  certain other risks.  If the
Advisor applies a strategy at an inappropriate  time or judges market conditions
or trends  incorrectly,  options  and  futures  strategies  may lower the Fund's
return.  Certain  strategies limit the Fund's  possibilities to realize gains as
well as limiting its exposure to losses.  The Fund could also experience  losses
if the prices of its options and futures  positions were poorly  correlated with
its other investments,  or if it could not close out its positions because of an
illiquid  secondary market. In addition,  the Fund will incur transaction costs,
including  trading  commissions  and option  premiums,  in  connection  with its
futures and options  transactions  and these  transactions  could  significantly
increase the Fund's turnover rate.

         The Fund may purchase put and call  options on  securities,  indexes of
securities and futures contracts,  or purchase and sell futures contracts,  only
if such options are written by other persons and if (i) the  aggregate  premiums
paid on all such  options  which are held at any time do not  exceed  20% of the
Fund's net assets,  and (ii) the aggregate margin deposits  required on all such
futures or options thereon held at any time do not exceed 5% of the Fund's total
assets.

Options

         Purchasing Put and Call Options.  By purchasing a put option,  the Fund
obtains the right (but not the obligation) to sell the instrument underlying the
option at a fixed  strike  price.  In return for this  right,  the Fund pays the
current market price for the option (known as the option premium).  Options have
various types of underlying instruments,  including specific securities, indexes
of securities, indexes of securities prices, and futures contracts. The Fund may
terminate its position in a put option it has purchased by allowing it to expire
or by exercising the option.  The Fund also may close out a put option  position
by entering into an offsetting  transaction,  if a liquid market exists.  If the
option is allowed to expire,  the Fund will lose the entire  premium it paid. If
the Fund  exercises  a put  option on a  security,  it will sell the  instrument
underlying the option at the strike price. If the Fund exercises an option on an
index, settlement is in cash and does not involve the actual sale of securities.
If an  option  is  American  style,  it may be  exercised  on any  day up to its
expiration  date. A European  style  option may be  exercised on its  expiration
date.

         The buyer of a typical  put  option can expect to realize a gain if the
price of the underlying instrument falls substantially. However, if the price of
the instrument  underlying the option does not fall enough to offset the cost of
purchasing  the option,  a put buyer can expect to suffer a loss (limited to the
amount of the premium paid, plus related transaction costs).

         The features of call options are  essentially  the same as those of put
options,  except  that the  purchaser  of a call  option  obtains  the  right to
purchase, rather than sell, the instrument underlying the option at the option's
strike price. A call buyer typically  attempts to participate in potential price
increases of the instrument  underlying the option with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can expect to
suffer a loss if security prices do not rise  sufficiently to offset the cost of
the option.

         Selling  (Writing)  Put and Call  Options.  When the Fund  writes a put
option,  it  takes  the  opposite  side of the  transaction  from  the  option's
purchaser. In return for receipt of the premium, the Fund assumes the obligation
to pay the strike price for the  instrument  underlying  the option if the other
party to the option  chooses to exercise it. The Fund may seek to terminate  its
position in a put option it writes  before  exercise by purchasing an offsetting
option in the market at its current price. If the market is not liquid for a put
option the Fund has written,  however,  the Fund must continue to be prepared to
pay the  strike  price  while the  option is  outstanding,  regardless  of price
changes, and must continue to post margin as discussed below.

         If the price of the  underlying  instrument  rises,  a put writer would
generally expect to profit,  although its gain would be limited to the amount of
the premium it received.  If security  prices  remain the same over time,  it is
likely that the writer also will profit,  because it should be able to close out
the option at a lower  price.  If security  prices  fall,  the put writer  would
expect to suffer a loss.  This loss should be less than the loss from purchasing
and holding the underlying  instrument  directly,  however,  because the premium
received for writing the option should offset a portion of the decline.

         Writing  a call  option  obligates  the  Fund to sell  or  deliver  the
option's  underlying  instrument in return for the strike price upon exercise of
the option. The  characteristics of writing call options are similar to those of
writing put  options,  except  that  writing  calls  generally  is a  profitable
strategy  if prices  remain  the same or fall.  Through  receipt  of the  option
premium,  a call writer  offsets part of the effect of a price  decline.  At the
same time,  because a call writer  must be  prepared  to deliver the  underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

         The writer of an exchange  traded put or call option on a security,  an
index of  securities  or a futures  contract  is  required  to  deposit  cash or
securities  or a letter of credit as margin and to make mark to market  payments
of variation margin as the position becomes unprofitable.

         Options  on  Indexes.  Options on  securities  indexes  are  similar to
options on securities,  except that the exercise of securities  index options is
s