JP MORGAN SERIES TRUST
485APOS, 2000-06-23
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As filed with the U.S. Securities and Exchange Commission on June 23, 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. 23

                                            AND

            REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

                                AMENDMENT NO. 24

                               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)
[ ] on [] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph  (a)(i)
[ ] on [] pursuant to paragraph  (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[X] on July 31, 2000 pursuant to paragraph (a)(ii) of Rule 485.


<PAGE>

--------------------------------------------------------------------------------
                                                       JULY  , 2000 | PROSPECTUS
--------------------------------------------------------------------------------

J.P. MORGAN MARKET NEUTRAL FUND

                                        ----------------------------------------
                      Seeking to provide long term capital
                       appreciation while neutralizing the
                           risks associated with stock
                                market investing

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>


CONTENTS
--------------------------------------------------------------------------------
2 | The fund's goal, investment approach, risks and expenses

J.P. MORGAN MARKET NEUTRAL FUND
Fund description ............................................   2
Investor expenses ...........................................   3

4 |

U.S. EQUITY MANAGEMENT APPROACH
J.P. Morgan .................................................   4
J.P. Morgan Market Neutral Fund .............................   4
Who may want to invest ......................................   4
U.S. equity investment process ..............................   5

6 | Investing in the J.P. Morgan Market Neutral 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
Performance of private accounts .............................   9
Risk and reward elements ....................................  10

FOR MORE INFORMATION ................................. back cover

<PAGE>


J.P. MORGAN MARKET NEUTRAL 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 10-11.

[GRAPHIC OMITTED]
GOAL
The fund's  goal is to provide  long-term  capital  appreciation  from a broadly
diversified  portfolio  of U.S.  stocks  while  neutralizing  the general  risks
associated  with  stock  market  investing.  This  goal can be  changed  without
shareholder approval.

[GRAPHIC OMITTED]
INVESTMENT APPROACH
Principal Strategies
The fund takes long and short  positions in different  stocks,  selecting from a
universe of mid to large cap stocks with characteristics similar to those of the
Russell  1000 and/or  Standard & Poor's 500 (S&P 500)  Indexes,  in an effort to
insulate  the  fund's  performance  from the  effects of  general  stock  market
movements.  In rising  markets,  the fund expects that the long  positions  will
appreciate more rapidly than the short positions, and in declining markets, that
the short  positions  will  decline  faster  than the long  positions.  The fund
expects that this difference in rates of appreciation, along with any returns on
cash generated by short sales, will generate a positive return; the fund pursues
returns exceeding those of 90-day U.S. Treasury Bills.

The fund purchases  securities  that it believes are undervalued and sells short
securities  that it believes are overvalued.  The long and short  portfolios are
matched  on a variety  of risk  characteristics  in order to limit  exposure  to
macroeconomic factors. In each sector in which the fund invests, it balances the
dollars  invested  in long and short  positions  to remain  sector  neutral.  In
attempting to  neutralize  market and sector risks,  the fund  emphasizes  stock
picking as the primary means of generating returns.

PRINCIPAL RISKS
While  the  fund's  market  neutral  approach  seeks to  minimize  the  risks of
investing in the overall stock market, it may involve more risk than other funds
that do not engage in short selling.  The fund's long positions could decline in
value while the value of the securities sold short increases, thereby increasing
the potential for loss. It also is possible that the  combination  of securities
held long and sold short will fail to protect the fund from overall stock market
risk as anticipated.

The fund will have  substantial  short positions and must borrow the security to
make delivery to the buyer. The fund may not always be able to borrow a security
it wants to sell short.  The fund also may be unable to close out an established
short  position at an acceptable  price,  and may have to sell long positions at
disadvantageous times to cover its short positions.

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.


<PAGE>

REGISTRANT: J.P. MORGAN SERIES TRUST
(J.P. MORGAN MARKET NEUTRAL FUND: SELECT
SHARES)

PORTFOLIO MANAGEMENT
The  fund's  assets  are  managed  by  J.P.  Morgan,   which  currently  manages
approximately $376 billion, including approximately $331 million using a similar
strategy as the fund.

The portfolio management team is led by James C. Wiess, vice president, Timothy
J. Devlin, vice president, and Bernard A. Kroll, vice president. 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. Mr. Kroll has been at J.P. Morgan since
1996 and prior to managing this fund was an equity derivatives specialist at
Goldman Sachs & Co.

--------------------------------------------------------------------------------
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 MARKET NEUTRAL FUND

<PAGE>

--------------------------------------------------------------------------------
INVESTOR EXPENSES
The estimated  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                                                            1.50
Distribution (Rule 12b-1) fees                                             none
Other expenses                                                             0.42
--------------------------------------------------------------------------------
Total operating expenses                                                   1.92
Fee waiver and
expense reimbursement(2)                                                   0.52
--------------------------------------------------------------------------------
Net expenses(2)                                                            1.40
--------------------------------------------------------------------------------

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
7/xx/00 through 9/30/01 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($)               143                553
--------------------------------------------------------------------------------

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

(2) Reflects an agreement  dated 7/XX/00 by Morgan Guaranty Trust Company of New
    York ("Morgan Guaranty"), an affiliate of J.P. Morgan, to reimburse the fund
    to the extent expenses  (excluding  extraordinary  expenses) exceed 1.40% of
    the fund's average daily net assets through 9/30/01.


                                             J.P. MORGAN MARKET NEUTRAL FUND | 3


<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 375 analysts and portfolio managers
around the world and has approximately  $376 billion in assets under management,
including  assets  managed  by  the  fund's  advisor,   J.P.  Morgan  Investment
Management Inc.

J.P. MORGAN INSTITUTIONAL MARKET NEUTRAL FUND
The fund  takes  long and  short  positions  in U.S.  stocks,  selecting  from a
universe of mid to large cap stocks with characteristics similar to those of the
Russell 1000 and/or S&P 500 Indexes.  As a  shareholder,  you should  anticipate
risks and rewards beyond those of 90-day U.S. Treasury Bills.

--------------------------------------------------------------------------------
Who may want to invest

The fund is designed for investors who:

o   are pursuing long-term capital appreciation but want to minimize exposure to
    general stock market risk

o   want returns that exceed those of 90-day U.S. Treasury Bills with controlled
    risk

The fund is not designed for investors who:

o   want a fund  that  pursues  market  trends  or  focuses  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   are seeking returns similar to those of typical stock funds



4 | U.S. EQUITY MANAGEMENT APPROACH

<PAGE>

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

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

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

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



<PAGE>

The fund invests  primarily in U.S. stocks.  The fund's  investment  philosophy,
developed by the advisor, focuses on stock picking while largely avoiding sector
or market-timing strategies.

U.S. EQUITY INVESTMENT PROCESS
In managing the fund, J.P. Morgan employs a three-step process:

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.

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.

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

o catalysts that could trigger a significant change in a stock's price

o high potential reward compared to potential risk

o temporary mispricings caused by market overreactions



                                            U.S. EQUITY MANAGEMENT APPROACH | 5


<PAGE>


YOUR INVESTMENT
--------------------------------------------------------------------------------

For your  convenience,  the fund  offers  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
    investment 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.

<PAGE>

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: Morgan Guaranty Trust shareholder services
   Account number: 00073-836
   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.


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 cash.

<PAGE>


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 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. The fund has the right to suspend redemption of shares and to
postpone payment of proceeds for up to seven days or as permitted by law.

--------------------------------------------------------------------------------
Shareholder Services Agent                Transfer Agent
Morgan Christiana Center                  State Street Bank and Trust Company
J.P. Morgan Funds Services - 2/OPS3       P.O. Box 8411
500 Staton Christiana Road                Boston, MA 02266-8411
Newark, DE 19713                          Attention: JP 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,  cash  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 its holdings and a discussion of recent and  anticipated  market
conditions and fund performance.

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

DIVIDENDS AND DISTRIBUTIONS
Income  dividends are typically paid four times a year. The fund typically makes
capital gains  distributions,  if any, once per year. However, the fund may make
more or fewer payments in a given year,  depending on its investment results and
its tax compliance situation.  The 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.


<PAGE>

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 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 of the trust are  shared  by all funds  governed  by these
trustees. Funds Distributor, Inc., as co-administrator,  along with J.P. Morgan,
provides trust 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                              1.50% 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 the fund.


<PAGE>

PERFORMANCE OF PRIVATE ACCOUNTS
The fund's goal 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 "Private Account Composite").

The performance of the Private  Account  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 Private  Account  Composite are not subject to
the same  limitations  imposed on mutual funds. If the accounts  included in the
Private  Account  Composite  had  been  subject  to  these  limitations,   their
performance might have been lower.

The performance of the Private Account  Composite  reflect the deductions of the
fund's total annual operating expenses, after expense reimbursements.

<TABLE>
<CAPTION>

                                                       Annual Total Returns for the Year Ended December 31,
                                1990        1991       1992        1993       1994        1995       1996
1997        1998
<S>                             <C>         <C>       <C>          <C>        <C>         <C>       <C>
<C>        <C>
Private Account Composite       3.02%       4.88%     15.89%      -0.96%      2.56%       5.77%     13.52%
4.12%      11.50%
----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bill              7.21%       5.60%      3.51%       2.87%      3.90%       5.60%      5.21%
5.26%       4.86%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Private Account  Composite  currently  includes all  discretionary  accounts
managed by J.P. Morgan using  substantially  similar investment  strategy as the
fund. The inception date for the Private Account Composite was January 31, 1990.
Prior to January 1, 1993, the Composite may not have included all  discretionary
accounts.

                                                                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
securities, including those that are designed to help the fund manage risk.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Potential risks                         Potential rewards                     Policies to balance risk and reward
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                   <C>
Market conditions
o The fund's share price and            o Stocks have generally               o Under normal circumstances the fund plans to
  performance will fluctuate              outperformed more stable              remain fully invested, with at least 65% in
  in response to stock market             investments (such as bonds            stocks; stock investments may include U.S. and
  movements                               and cash equivalents) over            foreign common stocks, convertible securities,
                                          the long term                         preferred stocks, trust or partnership
o Adverse market conditions                                                     interests, warrants, rights, and investment
  may from time to time cause                                                   company securities
  the fund to take temporary
  defensive positions that are                                                o The fund seeks to limit risk through
  inconsistent with its                                                         diversification
  principal investment
  strategies and may hinder                                                   o During periods of adverse market conditions, the
  the fund from achieving its                                                   fund has the option of investing up to 100% of
  investment objective                                                          assets in investment-grade short-term securities
------------------------------------------------------------------------------------------------------------------------------------
Management choices
o The fund could underperform           o The fund could outperform           o J.P. Morgan focuses its active management on
  its benchmark due to its                its benchmark due to these            securities selection, the area where it believes
  securities and asset                    same choices                          its commitment to research can most enhance
  allocation choices returns
------------------------------------------------------------------------------------------------------------------------------------
Foreign investments

o Currency exchange rate                o Favorable exchange rate             o The fund anticipates that its total foreign
  movements could reduce gains            movements could generate              investments will not exceed 20% of assets
  or create losses                        gains or reduce losses
                                                                              o The fund actively manages the currency exposure
o The fund could lose money             o Foreign investments, which            of its foreign investments relative to its
  because of foreign                      represent a major portion of          benchmark, and may hedge back into the U.S.
  government actions,                     the world's securities,               dollar from time to time (see also
  political instability, or               offer attractive potential            "Derivatives")
  lack of adequate and                    performance and
  accurate information                    opportunities for
                                          diversification
------------------------------------------------------------------------------------------------------------------------------------
Derivatives

o Derivatives such as futures,          o Hedges that correlate well          o The fund uses derivatives for hedging and for
  options, swaps and forward              with underlying positions             risk management (i.e., to establish or adjust
  foreign currency contracts              can reduce or eliminate               exposure to particular securities, markets or
  that are used for hedging               losses at low cost                    currencies); risk management may include
  the portfolio or specific                                                     management of the fund's exposure relative to
  securities may not fully              o The fund could make money             its benchmark
  offset the underlying                   and protect against losses
  positions(1) and this could             if management's analysis            o The fund only establishes hedges that it expects
  result in losses to the fund            proves correct                        will be highly correlated with underlying
  that would not otherwise                                                      positions
  have occurred                         o Derivatives that involve
                                          leverage could generate             o While the fund may use derivatives that
o Derivatives used for risk               substantial gains at low              incidentally involve leverage, it does not use
  management may not have the             cost                                  them for the specific purpose of leveraging its
  intended effects and may                                                      portfolio
  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
------------------------------------------------------------------------------------------------------------------------------------
</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.

10 | FUND DETAILS
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Potential risks                         Potential rewards                     Policies to balance risk and
reward
------------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                                    <C>
Illiquid holdings
o The fund could have                   o These holdings may offer            o The fund may not invest more than 15% of net
  difficulty valuing these                more attractive yields or             assets in illiquid holdings
  holdings precisely                      potential growth than
                                          comparable widely traded            o To maintain adequate liquidity to meet
o The fund could be unable to             securities                            redemptions, the fund may hold investment-grade
  sell these holdings at the                                                    short-term securities (including repurchase
  time or price it desires                                                      agreements and reverse repurchase agreements)
                                                                                and, for temporary or extraordinary purposes,
                                                                                may borrow from banks up to 33 1/3% of the value
                                                                                of its total assets
------------------------------------------------------------------------------------------------------------------------------------
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
  securities before issue or              of attractive transaction             leverage risk
  for delayed delivery, it                opportunities
  could be exposed to leverage
  risk if it does not use
  segregated accounts
------------------------------------------------------------------------------------------------------------------------------------
Short-term trading
o Increased trading would               o The fund could realize gains        o The fund generally avoids short-term trading,
  raise the fund's brokerage              in a short period of time             except to take advantage of attractive or
  and related costs                                                             unexpected opportunities or to meet demands
                                        o A fund could protect against          generated by shareholder activity
o Increased short-term capital            losses if a stock is
  gains distributions would               overvalued and its value
  raise shareholders' income              later falls
  tax liability
------------------------------------------------------------------------------------------------------------------------------------
Short selling
o Short sales may not have the          o The fund could make money           o The fund will not engage in short selling if the
  intended effects and may                and protect against losses            total market value of all securities sold short
  result in losses                        if management's analysis              would exceed 100% of the fund's net assets
                                          proves correct
o The fund may not be able to                                                 o The fund sets aside liquid assets in segregated
  close out a short position            o Short selling may allow the           or broker accounts to cover short positions
  at a particular time or at              fund to generate positive             and offset a portion of the leverage risk
  an acceptable price                     returns in declining markets
                                                                              o The fund makes short sales through brokers
o The fund may not be able to                                                   that Morgan has determined to be highly
  borrow certain securities to                                                  creditworthy
  sell short, resulting in
  missed opportunities

o Segregated  accounts  with  respect  to  short  sales  may  limit  the  fund's
  investment flexibility

o Short sales involve leverage risk, credit exposure to the brokers that execute
  the short sale and retain the  proceeds,  have no cap on maximum  losses,  and
  gains are limited to the price of the stock at the time of the short sale

o If the SEC staff changed its current  policy of permitting  brokers  executing
  the fund's short sales to hold the  proceeds of such short sales,  the cost of
  such transactions would increase significantly and the fund may be required to
  cease operations or change its investment objective
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                                               FUND DETAILS | 11

<PAGE>



                      THIS PAGE IS INTENTIONALLY LEFT BLANK










12 |

<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 Funds
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713

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.  (1-202-942-8090) 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  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 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





                                                                          IMPR30

<PAGE>

--------------------------------------------------------------------------------
                                                     JULY  , 2000  |  PROSPECTUS
--------------------------------------------------------------------------------

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







                                              ----------------------------------
                                              Seeking to provide high after tax
                                              total return through a disciplined
                                              management approach

This prospectus  contains  essential  information  for anyone  investing in this
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>


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

1     | The fund's goal,  principal  strategies,  principal risks,  expenses and
      performance

J.P. MORGAN INSTITUTIONAL TAX AWARE U.S. EQUITY FUND
Fund description .......................................................       1
Investor expenses ......................................................       2

3  |

U.S. EQUITY MANAGEMENT APPROACH
J.P. Morgan ............................................................       3
J.P. Morgan Institutional Tax Aware U.S. Equity Fund ...................       3
Who may want to invest .................................................       3
Investment process .....................................................       4
Tax aware investing at J.P. Morgan .....................................       4

5  | Investing in the J.P. Morgan Institutional Tax Aware U.S. Equity Fund

YOUR INVESTMENT
Investing through a financial professional .............................       5
Investing through an employer-sponsored retirement plan ................       5
Investing through an IRA or rollover IRA ...............................       5
Investing directly .....................................................       5
Opening your account ...................................................       5
Adding to your account .................................................       5
Selling shares .........................................................       6
Account and transaction policies .......................................       6
Dividends and distributions ............................................       7
Tax considerations .....................................................       7

9  | More about risk and the fund's business operations

FUND DETAILS
Business structure .....................................................       8
Management and administration ..........................................       8
Risk and reward elements ...............................................       9

FOR MORE INFORMATION ............................................     back cover


<PAGE>



J.P. MORGAN INSTITUTIONAL TAX AWARE U.S. EQUITY 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 9-10.

[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 4. 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 4.

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.

<PAGE>


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

PORTFOLIO MANAGEMENT
The  fund's  assets  are  managed  by  J.P.  Morgan,   which  currently  manages
approximately  $376  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.



1 | J.P. MORGAN INSTITUTIONAL 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 institutional shares because
returns reflect performance of the J.P. Morgan Tax Aware U.S. Equity Fund
(select shares), a separate class of shares.

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.


Year-by-year total return (%)     Shows changes in returns by calendar year(1,2)
--------------------------------------------------------------------------------
                         1997                  1998                  1999

40%

20%                      30.32                 31.18

0%                                                                   18.31
--------------------------------------------------------------------------------


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

The J.P.  Morgan Tax Aware U.S.  Equity Fund's  year-to-date  total return as of
3/31/00 was 6.66%.  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 (select shares) (after expenses)     18.31              26.46
S&P 500 Index (no expenses)                                                 21.04              27.56
---------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


--------------------------------------------------------------------------------
INVESTOR EXPENSES
The estimated  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)
Annual expenses (% of fund assets)
--------------------------------------------------------------------------------
Management fees                                                             0.45
Marketing (12b-1) fees                                                      none
Other expenses                                                              0.26
--------------------------------------------------------------------------------
Total operating expenses                                                    0.71
Fee waiver and expense
reimbursement(3)                                                            0.01
--------------------------------------------------------------------------------
Net expenses(3)                                                             0.07
--------------------------------------------------------------------------------

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 7/-
-/00 through 2/28/02 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($)       72                    226              394             882
--------------------------------------------------------------------------------

(1)  Returns  reflect  performance of the J.P. Morgan Tax Aware U.S. Equity Fund
     (select  shares).  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 7/- -/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  0.70% of the fund's
     average daily net assets through 2/28/01.

                        J.P. MORGAN INSTITUTIONAL TAX AWARE U.S. EQUITY FUND | 2



<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 375 analysts and portfolio managers
around the world and has approximately  $376 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
The fund invests primarily in U.S. stocks directly. As a shareholder, you should
anticipate  risks and rewards  beyond  those of a typical bond fund or a typical
balanced fund.


<PAGE>


WHO MAY WANT TO INVEST
--------------------------------------------------------------------------------
The fund is 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 a fund that seeks to outperform  the markets in which it invests over the
  long term

o are  individuals  that could benefit from a strategy that pursues returns from
  an after-tax perspective

The fund is not designed for investors who:

o want a  fund  that  pursues  market  trends  or  focuses  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 are investing through a tax-deferred account such as an IRA.



3 | U.S. EQUITY MANAGEMENT APPROACH


<PAGE>



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



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



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


<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  the fund  follows  its own  strategy,  the  fund has a single  investment
philosophy.  This philosophy,  developed by the fund's advisor, focuses on stock
picking while largely avoiding sector or market-timing strategies.

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

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.

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.

Stock  selection  The fund buys and sells stocks  according to its own policies,
using the research and valuation rankings as a basis. In general, the management
team buys stocks that are identified as undervalued  and considers  selling them
when they  appear  overvalued.  Along  with  attractive  valuation,  the  fund's
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 | 4



<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    Determine  the amount you are  investing.  The  minimum  amount for initial
     investment is $3,000,000 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 on the
     right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-766-7722.



<PAGE>

YOUR INVESTMENT
--------------------------------------------------------------------------------

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.M. Institutional Shareholder Services
     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

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.





5 | 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    The  fund  reserves  the  right to make  redemptions  of over  $250,000  in
     securities rather than in cash.


<PAGE>


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 days 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 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. 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.

Shareholder Services Agent
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713
1-800-766-7722

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

                                                             YOUR INVESTMENT | 6

<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 12) 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 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 its holdings and a discussion of recent and  anticipated  market
conditions and fund performance.

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

DIVIDENDS AND DISTRIBUTIONS

The fund  typically  pays income  dividends  four times a year and makes capital
gains  distributions,  if any, once per year. 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 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,  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.



7 | YOUR INVESTMENT


<PAGE>




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

BUSINESS STRUCTURE
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  1-800-766-7722.  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 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:


<PAGE>


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 billion
--------------------------------------------------------------------------------
Distributor, Inc.)                              of average net assets in
                                                J.P. Morgan-advised portfo-
                                                lios, 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 | 8



<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  certain  funds 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 Stocks have generally outper-    o Under normal circumstances the fund plans to remain
   and performance will fluctuate         formed more stable invest-         fully invested, with at least 65% in stocks; stock
   in response to stock                   ments (such as bonds and           investments may include U.S. and foreign common stocks,
   market movements                       cash equivalents) over the         convertible securities, preferred stocks, trust or
                                          long term                          partnership interests, warrants, rights, and investment
o  Adverse market conditions may                                             company securities
   from time to time cause the
   fund to take temporary defen-                                           o The fund seeks to limit risk through diversification
   sive positions that are
   inconsistent with its principal                                         o During severe market downturns, the fund has the option
   investment strategies and may                                             of investing up to 100% of assets in investment-grade
   hinder a fund from achieving its                                          short-term securities
   investment objective
------------------------------------------------------------------------------------------------------------------------------------
Management choices

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

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

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

When-issued and delayed
delivery securities

o  When the fund buys securi-           o The fund can take advantage        o The fund uses segregated accounts to offset leverage
   ties before issue or for               of attractive transaction            risk
   delayed delivery, it could be          opportunities
   exposed to leverage risk if it
   does not use segregated
   accounts
------------------------------------------------------------------------------------------------------------------------------------
Short-term trading

o  Increased  trading  would  raise     o The fund  could  realize  gains  o The fund generally avoids short-term trading, except
   the fund's brokerage and relat-        in a short period of time            to take advantage of attractive or unexpected
   ed costs                                                                    opportunities or to meet demands generated by
                                                                               shareholder activity.

o  Increased   short-term  capital                                         o  The  fund  could  protect  against  gains
distributions  would  losses  if a stock is  overvalued  raise  shareholders' income and its value later falls tax liability

</TABLE>

9 | 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 for hedging and for
  options, swaps, and forward                underlying positions can reduce           risk management (i.e., to establish or adjust
  foreign currency contracts that            or eliminate losses at low cost           exposure to particular securities, markets or
  are used for hedging the port-                                                       currencies); risk management may include
  folio or specific securities may         o The fund could make money                 management of the fund's exposure relative to
  not fully offset the underlying            and protect against losses if             its benchmark
  positions1 and this could                  management's analysis
proves
  result in losses to the fund               correct                                o  The fund only establishes hedges that it
  that would not have otherwise                                                        expects will be highly correlated with
  occurred                                 o Derivatives that involve leverage         underlying positions
                                             could generate substantial gains
o Derivatives used for risk man-             at low cost                            o  While the fund may use derivatives that
  agement may not have the                                                             incidentally involve leverage, it does not
  intended effects and may                                                             use them for the specific purpose of
  result in losses or missed                                                           leveraging its portfolio
  opportunities

o The counterparty to a deriva-
  tives contract could default

o Derivatives that involve lever-
  age could magnify losses

o Certain types of derivatives
  involve costs to the fund
  which can reduce returns

------------------------------------------------------------------------------------------------------------------------------------
Securities lending

o When the fund lends a secur-             o The fund may enhance income            o J.P. Morgan maintains a list of approved
  ity, there is a risk that the              through the investment of the            borrowers
  loaned securities may not be               collateral received from the
  returned if the borrower                   borrower                               o The fund receives collateral equal to at
  defaults                                                                            least 100% of the current value of securities
                                                                                      loaned
o The collateral will be subject to
  the risks of the securities in                                                   o The lending agents indemnify a fund against
  which it is invested                                                                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 The fund could have difficulty           o These holdings may offer more          o The fund may not invest more than 15% of net
  valuing these holdings                     attractive yields or potential           assets in illiquid holdings
  precisely                                  growth than comparable widely
                                             traded securities                      o To maintain adequate liquidity to meet
o The fund could be unable to                                                         redemptions, the fund may hold
  sell these holdings at the                                                          investment-grade short-term securities
  time or price it desires                                                            (including repurchase agreements and reverse
                                                                                      repurchase agreements) and, for temporary or
                                                                                      extraordinary purposes, may borrow from banks
                                                                                      up to 33 1/3% of the value of its total assets
------------------------------------------------------------------------------------------------------------------------------------
</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 | 10

<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
Morgan Christiana Center
J.P. Morgan Funds Services - 2/OPS3
500 Stanton Christiana Road
Newark, DE 19713

Telephone:  1-800-766-7722

Hearing impaired:  1-888-468-4015

Email:  [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.  (1-202-942-8090) 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

<PAGE>









                               J.P. MORGAN SERIES TRUST


                         J.P. MORGAN MARKET NEUTRAL FUND


                       STATEMENT OF ADDITIONAL INFORMATION





                                   JULY , 2000














   THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, BUT CONTAINS
 ADDITIONAL INFORMATION WHICH SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
    OF THE J.P. MORGAN MARKET NEUTRAL FUND DATED JULY, 2000 AND J.P. MORGAN
  INSTITUTIONAL MARKET NEUTRAL FUND DATED OCTOBER 1, 1999 AS REVISED MARCH 3,
    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 INSTITUTIONAL SHARES DATED
   MAY 31, 1999. THE PROSPECTUS AND THESE FINANCIAL STATEMENTS, INCLUDING THE
   INDEPENDENT ACCOUNTANTS' REPORT THEREON ARE AVAILABLE, WITHOUT CHARGE UPON
 REQUEST FROM FUNDS DISTRIBUTOR, INC., ATTENTION: J.P. MORGAN SERIES TRUST (800)
                                   221-7930.


<PAGE>




 <TABLE>
 <CAPTION>

                                TABLE OF CONTENTS
                                                                          PAGE

 <S>                                                                       <C>
 GENERAL----------------------------------------------------------------------1
 INVESTMENT OBJECTIVES  AND
 POLICIES---------------------------------------------------------------------1
INVESTMENT
RESTRICTIONS------------------------------------------------------------------17
TRUSTEES, ADVISORY BOARD MEMBERS AND
OFFICERS---------------------------------------------------------------------19
CODE OF
ETHICS------------------------------------------------------------------------24
INVESTMENT ADVISOR------------------------------------------------------------24
DISTRIBUTOR-------------------------------------------------------------------26
CO-ADMINISTRATOR--------------------------------------------------------------27
SERVICES
AGENT-------------------------------------------------------------------------27
CUSTODIAN AND TRANSFER  AGENT-------------------------------------------------28
 SHAREHOLDER
 SERVICING--------------------------------------------------------28
 FINANCIAL
 PROFESSIONALS----------------------------------------------------------------29
 INDEPENDENT
 ACCOUNTANTS------------------------------------------------------------------30
 EXPENSES---------------------------------------------------------------------30
 PURCHASE OF
 SHARES---------------------------------------------------------------------31
 REDEMPTION OF
 SHARES-----------------------------------------------------------------------32
 EXCHANGE OF
 SHARES-----------------------------------------------------------------------33
 DIVIDENDS AND
 DISTRIBUTIONS---------------------------------------------------------------33
 NET ASSET
 VALUE------------------------------------------------------------------------34
 PERFORMANCE
 DATA-------------------------------------------------------------------------35
 PORTFOLIO
 TRANSACTIONS-----------------------------------------------------------------36
 MASSACHUSETTS
 TRUST------------------------------------------------------------------------38
 DESCRIPTION  OF
 SHARES----------------------------------------------------------------------38
 TAXES------------------------------------------------------------------------39
 ADDITIONAL
 INFORMATION------------------------------------------------------------------43
  FINANCIAL
 STATEMENTS------------------------------------------------------------------45
 APPENDIX A------------------------------------------------------------------A-1

 </TABLE>
 <PAGE>


GENERAL

           J.P.  Morgan  Market  Neutral  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.

           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  long  term  capital
appreciation, while seeking to neutralize the risks of stock market investing.

           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.
Generally, ADRs, in registered form, are designed for use in the U.S. securities
markets,  and EDRs, in bearer form, are designed for use in European  securities
markets.

           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.

Short Selling

           The Fund will engage heavily in short selling. In these transactions,
the Fund sells a security  it does not own in  anticipation  of a decline in the
market value of the security. To complete the transaction,  the Fund must borrow
the security to make delivery to the buyer. The Fund is obligated to replace the
security  borrowed by purchasing it subsequently at the market price at the time
of  replacement.  The  price at such  time may be more or less than the price at
which the  security  was sold by the Fund,  which may  result in a loss or gain,
respectively.  Unlike purchasing a stock,  where potential losses are limited to
the purchase  price,  short sales have no cap on maximum  losses,  and gains are
limited to the price of the stock at the time of the short sale.

           The Fund will not sell securities  short if, after effect is given to
any such short sale, the total market value of all  securities  sold short would
exceed 100% of the Fund's net assets.

           The Fund also may make short  sales  "against  the box," in which the
Fund  enters  into a short sale of a security  which it owns or has the right to
obtain at no additional cost.

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, 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.  See "Risk Management" below. The Fund may not use futures
contracts and options for speculation.

           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
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. The 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 the
Fund  may not be  able  to  close  out an  option  position  into  which  it has
previously entered. When the Fund purchases an OTC option (as defined below), 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 Board of Trustees.  While exchange  traded options are obligations of the
Options Clearing Corporation, in the case of OTC options, the Fund relies on the
dealer from which it purchased the option to perform if the option is exercised.
Thus, when the 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
the Fund as well as the loss of the expected benefit of the transaction.

           Provided  that the  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,  the 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 Fund 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
Fund 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 the  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 interpretations of the SEC thereunder.

           Combined  Positions.  The Fund is  permitted  to  purchase  and write
options in combination  with other series of the Trust,  or in combination  with
futures or forward contracts,  to adjust the risk and return  characteristics of
the overall position.  For example, the 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 the Fund's
current or anticipated  investments  exactly. The 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 also can diverge from the prices
of their underlying  instruments,  even if the underlying  instruments match the
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  also may 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.  The 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 the 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 the 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  the Fund to continue to hold a position  until  delivery or  expiration
regardless  of  changes in its value.  As a result,  the Fund's  access to other
assets held to cover its options or futures  positions  also could 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,  the 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 Fund will not be commodity pools,  certain  derivatives  subject the Fund to
the rules of the Commodity Futures Trading  Commission which limit the extent to
which the Fund can  invest in such  derivatives.  The Fund may invest in futures
contracts and options with respect thereto for hedging  purposes  without limit.
However,  the 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 the 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,  the Fund 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 the Fund's
assets  could  impede  portfolio  management  or  the  Fund's  ability  to  meet
redemption requests or other current obligations.

Swaps and Related Swap Products

           The Fund may engage in swap transactions,  including, but not limited
to, interest rate,  currency,  securities index,  basket,  specific security and
commodity swaps,  interest rate caps, floors and collars and options on interest
rate swaps (collectively defined as "swap transactions").

           The Fund may enter  into  swap  transactions  for any  legal  purpose
consistent with its investment  objective and policies,  such as for the purpose
of  attempting  to obtain or preserve a  particular  return or spread at a lower
cost than  obtaining  that return or spread  through  purchases  and/or sales of
instruments in cash markets,  to protect  against  currency  fluctuations,  as a
duration management  technique,  to protect against any increase in the price of
securities the Fund anticipates  purchasing at a later date, or to gain exposure
to certain matters in the most  economical way possible.  The Fund will not sell
interest rate caps, floors or collars if it does not own securities with coupons
which provide the interest that the Fund may be required to pay.

           Swap  agreements  are two-party  contracts  entered into primarily by
institutional  counterparties  for periods  ranging  from a few weeks to several
years. In a standard swap transaction, two parties agree to exchange the returns
(or  differentials  in rates of  return)  that  would be earned or  realized  on
specified notional investments or instruments. The gross returns to be exchanged
or  "swapped"  between the parties are  calculated  by  reference to a "notional
amount," i.e., the return on or increase in value of a particular  dollar amount
invested at a particular  interest  rate,  in a particular  foreign  currency or
commodity,  or in a "basket" of securities  representing a particular index. The
purchaser of an interest rate cap or floor, upon payment of a fee, has the right
to receive payments (and the seller of the cap is obligated to make payments) to
the extent a specified  interest  rate exceeds (in the case of a cap) or is less
than (in the case of a floor) a specified level over a specified  period of time
or at specified dates. The purchaser of an interest rate collar, upon payment of
a fee,  has the right to  receive  payments  (and the  seller  of the  collar is
obligated to make  payments) to the extent that  specified  interest  rate falls
outside an agreed  upon range over a  specified  period of time or at  specified
dates. The purchase of an option on an interest rate swap, upon payment of a fee
(either  at the time of  purchase  or in the form of  higher  payments  or lower
receipts within an interest rate swap  transaction)  has the right,  but not the
obligation,  to  initiate a new swap  transaction  of a  pre-specified  notional
amount  with  pre-specified   terms  with  the  seller  of  the  option  as  the
counterparty.

           The "notional  amount" of a swap transaction is the agreed upon basis
for  calculating  the payments  that the parties  have agreed to  exchange.  For
example,  one swap  counterparty  may agree to pay a floating  rate of  interest
(e.g., three month LIBOR) calculated based on a $10 million notional amount on a
quarterly basis in exchange for receipt of payments calculated based on the same
notional  amount and a fixed rate of interest  on a  semi-annual  basis.  In the
event the Fund is obligated to make  payments more  frequently  than it receives
payments from the other party, it will incur incremental credit exposure to that
swap  counterparty.  This  risk  may be  mitigated  somewhat  by the use of swap
agreements  which call for a net payment to be made by the party with the larger
payment  obligation  when the  obligations  of the parties  fall due on the same
date.  Under most swap  agreements  entered  into by the Fund,  payments  by the
parties will be exchanged on a "net basis," and the Fund will receive or pay, as
the case may be, only the net amount of the two payments.

           The  amount  of the  Fund's  potential  gain  or  loss  on  any  swap
transaction  is not subject to any fixed limit.  Nor is there any fixed limit on
the Fund's  potential loss if it sells a cap or collar.  If the Fund buys a cap,
floor, or collar, however, the Fund's potential loss is limited to the amount of
the fee that it has paid.  When  measured  against  the  initial  amount of cash
required to initiate the  transaction,  which is  typically  zero in the case of
most conventional swap transactions,  swaps, caps, floors and collars tend to be
more volatile than many other types of instruments.

           The use of swap  transactions,  caps,  floors  and  collars  involves
investment  techniques and risks which are different from those  associated with
portfolio security transactions. If the Advisor is incorrect in its forecasts of
market values,  interest rates,  and other  applicable  factors,  the investment
performance of the Fund will be less favorable than if these  techniques had not
been used. These instruments typically are not traded on exchanges. Accordingly,
there is a risk that the other  party to certain of these  instruments  will not
perform its obligations to the Fund or that the Fund may be unable to enter into
offsetting  positions to terminate its exposure or liquidate its position  under
certain of these  instruments  when it wishes to do so. Such  occurrences  could
result in losses to the Fund.

           The Advisor  will,  however,  consider such risks and will enter into
swap and other derivative  transactions only when it believes that the risks are
not unreasonable.

           The Fund will maintain cash or liquid assets in a segregated  account
with its  custodian  in an amount  sufficient  at all times to cover its current
obligations under its swap transactions,  caps, floors and collars.  If the Fund
enters into a swap agreement on a net basis, it will segregate assets with daily
value at least equal to the excess,  if any, of the Fund's  accrued  obligations
under the swap agreement over the accrued amount the Fund is entitled to receive
under the  agreement.  If the Fund enters into a swap  agreement on other than a
net basis,  or sells a cap,  floor or collar,  it will  segregate  assets with a
daily value at least equal to the full  amount of a Fund's  accrued  obligations
under the agreement.

           The Fund will not enter into any swap  transaction,  cap,  floor,  or
collar, unless the counterparty to the transaction is deemed creditworthy by the
Advisor.  If a counterparty  defaults,  the Fund may have  contractual  remedies
pursuant to the agreements related to the transaction. The swap markets in which
many types of swap  transactions  are traded have grown  substantially in recent
years, with a large number of banks and investment  banking firms acting both as
principals and as agents using standardized swap documentation. As a result, the
markets  for  certain  types of swaps  (e.g.,  interest  rate swaps) have become
relatively  liquid.  The markets for some types of caps,  floors and collars are
less liquid.

           The liquidity of swap transactions,  caps, floors and collars will be
as set forth in  guidelines  established  by the  Advisor  and  approved  by the
Trustees which are based on various  factors,  including (1) the availability of
dealer quotations and the estimated  transaction volume for the instrument,  (2)
the number of dealers and end users for the instrument in the  marketplace,  (3)
the level of market making by dealers in the type of instrument,  (4) the nature
of the instrument (including any right of a party to terminate it on demand) and
(5) the nature of the marketplace for trades (including the ability to assign or
offset the Fund's  rights and  obligations  relating  to the  instrument).  Such
determination  will govern whether the instrument  will be deemed within the 15%
restriction on investments in securities that are not readily marketable.

           During the term of a swap, cap, floor or collar, changes in the value
of the  instrument  are  recognized as unrealized  gains or losses by marking to
market to reflect the market value of the  instrument.  When the  instrument  is
terminated,  the  Fund  will  record  a  realized  gain  or  loss  equal  to the
difference,  if any,  between  the  proceeds  from  (or  cost  of)  the  closing
transaction and the Fund's basis in the contract.

           The federal income tax treatment  with respect to swap  transactions,
caps, floors, and collars may impose limitations on the extent to which the Fund
may engage in such transactions.

Risk Management

           The Fund may employ  non-hedging  risk  management  techniques.  Risk
management strategies are used 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.

Portfolio Turnover

           The table below sets forth the portfolio turnover rates for the Fund.
A rate of 100%  indicates  that the  equivalent of all of the 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.

     Institutional  Shares:  For the period December 31, 1998  (commencement  of
operations) through May 31, 1999: 195%.

INVESTMENT RESTRICTIONS

           The investment  restrictions set forth below have been adopted by the
Trust with respect to the 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 Fund. 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 the Fund's assets.

           The Fund:

     1. May not make any investments inconsistent with the Fund's classification
as a diversified investment company under the 1940 Act;

           2. May not  purchase  any  security  which  would  cause  the 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 1940 Act
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 the 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, the 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 the 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 the Fund's
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 the Fund and may be changed by
the Trustees. These non-fundamental investment policies require that the Fund:

           (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 the Fund's net  assets  would be in  investments  which are
illiquid; and

     (ii) 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 the 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, ADVISORY BOARD MEMBERS AND OFFICERS

Trustees

           The Trustees of the Trust,  their  principal  occupations  during the
past five years,  business addresses and dates of birth are set forth below. The
mailing address of the Trustees is c/o Pierpont Group Inc. 461 Fifth Avenue, New
York , NY 10017.

     FREDERICK S.  ADDY-Trustee;  Retired,  Former  Executive Vice President and
Chief  Financial  Officer,  Amoco  Corporation.  His date of birth is January 1,
1932.

     WILLIAM G. BURNS-Trustee; Retired; Former Vice Chairman and Chief Financial
Officer, NYNEX. 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 date
of birth is May 23, 1934.

           MATTHEW  HEALEY1-Trustee,   Chairman  and  Chief  Executive  Officer;
Chairman, Pierpont Group, Inc., since prior to 1992. 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 date of birth is March 17, 1934.

           Each Trustee is  currently  paid an annual fee of $75,000 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>

NAME OF TRUSTEE AND TITLE                  AGGREGATE TRUSTEE COMPENSATION       TOTAL TRUSTEE COMPENSATION ACCRUED BY THE MASTER
                                           PAID BY THE TRUST DURING 1999        PORTFOLIOS(*), J.P. MORGAN INSTITUTIONAL FUNDS,
                                                                                J.P. MORGAN FUNDS AND THE TRUST DURING 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>

(*) The  J.P.  Morgan  Funds  and  J.P.  Morgan  Institutional  Funds  are  each
multi-series  registered  investment  companies  that  are  part  of a  two-tier
(master-feeder)  investment fund structure. Each series of the J.P. Morgan Funds
and J.P.  Morgan  Institutional  Funds is a feeder fund that  invests all of its
investable  assets in one of 19 separate  master  portfolios  (collectively  the
"Master Portfolios") for which JPMIM acts as investment adviser, 14 of which are
registered investment companies.

     (**) 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, the Trust, the J.P. Morgan Funds and
the J.P. Morgan Institutional Funds) 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 J.P. Morgan Family of Funds  (formerly,  The Pierpont 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 fee paid to Pierpont  Group,  Inc. by the Fund for the period
December 31, 1998 (commencement of operations) through May 31, 1999 was $91.

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  have  available  to it 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  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 -- Former  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.

           James J. Schonbachler -- Retired; Prior to September,  1998, Managing
Director,  Bankers  Trust  Company and Chief  Executive  Officer  and  Director,
Bankers Trust A.G.,  Zurich and BT Brokerage  Corp. His date of birth is January
26, 1943.

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 Chief  Executive
Officer receives no compensation in his capacity as an officer of the Trust. 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 c/o Pierpont Group
Inc. 461 Fifth Avenue, New York , NY 10017.

     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.
Prior to July 1994, she was President and Chief  Compliance  Officer of 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 Manager of Treasury Servicing and Administration of FDI. Prior to
November  1998,  Mr. Covino was employed by Fidelity  Investments  where he held
multiple  positions  in its  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.
Prior to May 1994, Ms. Jacoppo-Wood was a senior paralegal at The Boston Company
Advisors, Inc. ("TBCA"). 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.  Prior to April 1994,  Mr. Kelley was employed by Putnam  Investments  in
legal and compliance capacities. 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  for  Investors  Bank & Trust  Company.  Prior to July 1994 she was a
finance student at Stonehill College. 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.
Prior to August 1994,  Ms.  Nelson was an Assistant  Vice  President  and Client
Manager for The Boston Company, Inc. 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.

     GEORGE A. RIO-President and Assistant  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.  From  September 1983 to May
1994,  Mr. Rio was  Senior  Vice  President  & Manager  of Client  Services  and
Director of Internal Audit at The Boston  Company.  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.

           ELBA  VASQUEZ-Vice  President  and  Assistant  Secretary.  Currently,
services as Vice  President.  Prior serviced as Assistant  Vice President  since
1997 and  Sales  Associate  since  May  1996 of FDI.  (March  1990 to May  1996,
employed in various mutual fund sales and marketing  positions by the U.S. Trust
Company of New York. Her date of birth is December 14, 1961.

CODE OF ETHICS

           The Trust and the Advisor  have adopted  codes of ethics  pursuant to
Rule 17j-1 under the 1940 Act. Each of these codes permits  personnel subject to
such code to invest in securities, including securities that may be purchased or
held by the  Portfolio.  Such  purchases,  however,  are  subject to  procedures
reasonably necessary to prevent a fraud or deceit on the Trust.

INVESTMENT ADVISOR

           The  Trust  has  retained  JPMIM as  Investment  Advisor  to  provide
investment advice and portfolio  management services to the Fund. Subject to the
supervision  of the Fund's  Trustees,  the Advisor  makes the Fund's  day-to-day
investment decisions,  arranges for the execution of portfolio  transactions and
generally manages the Fund's investments.

           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 more than $376 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 375
research analysts,  capital market researchers,  portfolio managers, and traders
and one of 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.  The
conclusions of the equity analysts'  fundamental  research are quantified into a
set of projected returns for individual  companies through the use of a dividend
discount  model.  These  returns are  projected  for two to five 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 Fund 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 Fund.  Such  accounts are  supervised  by officers  and  employees of the
Advisor  who may  also be  acting  in  similar  capacities  for  the  Fund.  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  Fund is the  90-day  U.S.
Treasury Bill.

           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. Morgan is also a wholly
owned subsidiary of J.P. Morgan, which is a bank holding company organized under
the laws of the State of Delaware.

           The Fund is managed by  employees  of the Advisor  who, in acting for
their  clients,  including the Fund, do not discuss their  investment  decisions
with any personnel of J.P. Morgan with any of its affiliated  persons,  with the
exception of certain investment  management  affiliates of J.P. Morgan or broker
dealer  affiliates of J.P.  Morgan which execute  transactions  on behalf of the
Fund.

           As compensation  for the services  rendered and related expenses such
as salaries  of advisory  personnel  borne by the Advisor  under the  Investment
Advisory  Agreements,  the Fund has  agreed to pay the  Advisor a fee,  which is
computed  daily and may be paid  monthly,  equal to 1.25% of the Fund's  average
daily net assets.

           For the period December 31, 1998 (commencement of operations) through
May 31, 1999,  the Fund paid to paid the Advisor  $62,113 in advisory fees under
the prior Investment Advisory Agreement described above.

           The Investment  Advisory Agreement between the Advisor and the Trust,
on behalf of the 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 the 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."

           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 the 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 the 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 Fund's distributor.

           The  Distribution  Agreement  will continue in effect with respect to
the Fund for a period of two years after execution and will continue  thereafter
only if it is  approved  at least  annually  (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 Advisor Board" and "Officers"). The
Distribution Agreement will terminate automatically if assigned by either party.
The  Distribution  Agreement is also  terminable with respect to the 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 dated August 1,
1996,  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 Fund; (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 and investors;  and (vi) maintains related books and
records.

           For its services under the Co-Administration  Agreement, the 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
the 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.

     For the period December 31, 1998  (commencement of operations)  through May
31, 1999, the Fund paid to FDI $103 in administrative fees.

           See "Expenses" below for applicable expense limitations.

  SERVICES AGENT

           The Trust, on behalf of the 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 the 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 the 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,  the 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 Fund,  the Trust's
other series 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 the 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 for
which Morgan provides administrative services.

     For the period December 31, 1998  (commencement of operations)  through May
31, 1999, the Fund paid to Morgan, as Services Agent, $2,147.

CUSTODIAN AND TRANSFER AGENT

           The Bank of New York  ("BONY"),  One Wall Street,  New York, New York
10286,  serves as the Trust's  and each of the  Portfolio's  custodian  and fund
accounting agent.  Pursuant to the Custodian  Contract,  BONY is responsible for
holding portfolio  securities and cash, and maintaining the books of account and
records of portfolio transactions.

           State Street Bank and Trust Company  ("State  Street"),  225 Franklin
Street,  Boston,  Massachusetts  02110, serves as the Trust's custodian and fund
accounting,  transfer and dividend  disbursing agent.  Pursuant to the Custodian
Contract with the Trust,  State Street is responsible  for maintaining the books
and  records of the Fund's  portfolio  transactions  and for  holding  portfolio
securities and cash. The custodian maintains portfolio  transaction  records. 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 the Fund,  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 the 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 Fund's transfer  agent;  transmitting
purchase and  redemption  orders to the Fund's  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 Fund has agreed to pay
Morgan  for  these  services,  the  Select  Shares  pay a fee of  0.25%  and the
Institutional  Shares  pay a fee of  0.10%  (expressed  as a  percentage  of the
average  daily net asset value 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 the Fund,  the  shareholder  servicing
fee paid by the series of the Fund to Morgan for the periods indicated:

     Institutional  Shares:  For the period December 31, 1998  (commencement  of
operations) through May 31, 1999: $4,141.

           The Fund 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 Fund. See
"Financial  Professionals"  below.  Organizations that provide  recordkeeping or
other services to certain  employee benefit or retirement plans that include the
Fund 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  Fund,
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.

           The 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 the Fund's behalf.
The 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 the Fund,  assists in the preparation and/or review of the Fund's federal and
state income tax returns and consults  with the Fund 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 Officers,"
"Investment Advisor,"  "Co-Administrator",  "Distributor",  "Services Agent" and
"Shareholder  Servicing"  above, the Fund is 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,  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 Fund as described
in the  prospectus,  to the  extent  necessary  to  maintain  the  Fund's  total
operating  expenses at the  following  annual rate of the Fund's  average  daily
assets. This limit does not cover extraordinary expenses.

Select Shares                  1.40% until September 30, 2001
Institutional Shares 1.25% until September 30, 2000

           The table  below sets forth for the  series of the Fund  listing  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 periods indicated:

     Institutional  Shares:  For the period December 31, 1998  (commencement  of
operations) to May 31, 1999: $88,648.

PURCHASE OF SHARES

           Additional Minimum Balance Information. 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 the Fund only
through  the  Distributor.  All  purchase  transactions  in  Fund  accounts  are
processed by Morgan as shareholder servicing agent and the 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 Fund reserves the right to determine  the purchase  orders that
they will accept.

           References  in  the  Prospectus  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 the Fund may make transactions in shares of the Fund.

           The 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 the 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 the Fund. In addition, securities accepted in payment for shares
must:  (i) meet the  investment  objective  and  policies  of the Fund;  (ii) be
acquired  by the  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.  The 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  Fund  as  described  in  the
Prospectus.  The 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. See
below and "Exchange of Shares."

           The Trust,  on behalf of the 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 the 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
interests of the remaining  shareholders  of the Fund 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 has been granted  exemptive  relief
from the SEC with  respect  to  redemptions  in-kind  by the  Fund.  The Fund is
permitted to pay  redemptions  to greater than 5%  shareholders  in  securities,
rather than in cash,  to the extent  permitted by the SEC. 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,  the Fund will attempt to select  securities  for in-kind
redemptions  that  approximate  the  overall   characteristics   of  the  Fund's
portfolio.  The 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 the Fund's  portfolio  securities.
The 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.

           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  the 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.  The 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 the 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 Fund  generally  intends to pay
redemption  proceeds in cash,  however,  since it reserves the right at its sole
discretion  to  pay  redemptions   over  $250,000  in-kind  as  a  portfolio  of
representative  stocks rather than in cash,  the fund reserves the right to deny
an  exchange  request in excess of that  amount.  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

           The Fund declares and pays dividends and  distributions  as described
under "Dividends and Distributions" in the Prospectus.

           Dividends  and  capital  gains  distributions  paid by the  Fund  are
automatically reinvested in additional shares of the Fund unless the shareholder
has elected to have them paid in cash. Dividends and distributions to be paid in
cash are  credited to the  shareholder's  account at Morgan or at his  financial
professional or, in the case of certain Morgan customers, are mailed by check in
accordance  with the  customer's  instructions.  The Fund  reserves the right to
discontinue, alter or limit the automatic reinvestment privilege at any time.

           If a  shareholder  has elected to receive  dividends  and/or  capital
gains  distributions  in cash and the postal or other delivery service is unable
to deliver checks to the  shareholder's  address of record,  such  shareholder's
distribution  option will  automatically be converted to having all dividend and
other distributions  reinvested in additional shares. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.




NET ASSET VALUE

           The Fund  computes 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,  the Fund will close for purchases and
redemptions  at the  same  time.  The Fund  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 Fund's business days.

           Portfolio  securities  are  valued  at the  last  sale  price  on the
securities  exchange or national  securities market on which such securities are
primarily  traded.  Unlisted  securities  are valued at the last  average of the
quoted bid and asked  prices in the OTC market.  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 average
currency exchange rate on the valuation date.

           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 in 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 the  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 Fund 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  for the  different  series may be  obtained by calling
JPMIM  at  (800)   531-5411  for  Select  Shares  and  at  (800)   766-7722  for
Institutional Shares.

           The  classes  of  shares of the 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 the 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 class of shares of the Fund 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, also may be calculated.

           Below is set forth  historical  return  information for the series of
the Fund for the periods indicated:

     Institutional  Shares: (May 31, 1999): Average annual total return, 1 year:
N/A;  average annual total return,  5 years:  N/A;  average annual total return,
commencement of operations  (December 31, 1998) to period end: 1.34%;  aggregate
total return, 1 year: N/A; aggregate total return, 5 years: N/A; aggregate total
return, commencement of operations (December 31, 1998) to period end: 1.34%.

           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 the 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 the  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 Fund's 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 Fund 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 the Fund; (5)
descriptions  of  investment  strategies  for  the  Fund;  (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  Fund;  (7)  comparisons  of  investment  products
(including  the  Fund)  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 the Fund's volatility  relative to its benchmark or to past
performance,  including  risk  adjusted  measures.  The Fund  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 the Fund.

PORTFOLIO TRANSACTIONS

     The  Advisor  places  orders  for the Fund 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 the Fund.  See  "Investment  Objectives  and Policies." 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 Fund 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 the Fund.  The Advisor  believes that the value of research  services
received is not determinable and does not significantly reduce its expenses. The
Fund  does  not  reduce  its fee to the  Advisor  by any  amount  that  might be
attributable to the value of such services.

           Subject to the  overriding  objective of obtaining the best execution
of  orders,  the  Advisor  may  allocate  a  portion  of  the  Fund's  brokerage
transactions  to  affiliates  of the  Advisor.  In order for  affiliates  of the
Advisor to effect any portfolio transactions for the Fund, the commissions, fees
or other  remuneration  received by such  affiliates must be reasonable and fair
compared to the commissions,  fees, or other  remuneration paid to other brokers
in connection with comparable  transactions  involving similar  securities being
purchased or sold on a securities  exchange during a comparable  period of time.
Furthermore,  the Trust's Trustees, including a majority of the Trustees who are
not "interested  persons," have adopted procedures which are reasonably designed
to  provide  that any  commissions,  fees,  or other  remuneration  paid to such
affiliates are consistent with the foregoing standard.

           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.

           Portfolio securities will not be purchased from or through or sold to
or through the Advisor or FDI or any "affiliated person" (as defined in the 1940
Act) thereof when such entities are acting as  principals,  except to the extent
permitted by law. In addition,  the Fund will not purchase  securities  from any
underwriting  group of which the  Advisor or an  affiliate  of the  Advisor is a
member, except to the extent permitted by law.

           Investment  decisions  made by the  Advisor  are the  product of many
factors  in  addition  to basic  suitability  for the 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 Fund only may sell
a security to another  series of the Trust 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 the Fund,  as
well as other  clients  including  other  clients,  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 the 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 the Fund.
In some instances, this procedure might adversely affect the Fund.

           The Fund paid the following approximate brokerage commissions for the
period  December 31, 1998  (commencement  of  operations)  through May 31, 1999:
$4,334.

MASSACHUSETTS TRUST

           The Trust is a "Massachusetts  business trust" of which the Fund is a
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 the
Fund and that every written  agreement,  obligation,  instrument or  undertaking
made on behalf  of the Fund will  contain a  provision  to the  effect  that the
shareholders are not personally liable thereunder.

           The Trust's  Declaration  of Trust further  provides that no Trustee,
Members of the Advisory Board, officer, employee or agent of the Trust is liable
to the Fund or to a  shareholder,  and that no Trustee,  Members of the Advisory
Board,  officer,  employee or agent is liable to any third persons in connection
with the affairs of the 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 the  Fund.  The  Trust's
Declaration  of Trust  provides that a Trustee,  Members of the Advisory  Board,
officer,  employee or agent is entitled to be indemnified  against all liability
in  connection  with the affairs of the Fund,  except  liabilities  arising from
disabling conduct.

DESCRIPTION OF SHARES

     The 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
the Fund.  To date,  the Fund is authorized  to issue  Institutional  Shares and
Select Shares, but only Institutional Shares are currently offered.

           Each share represents an equal proportional interest in the Fund with
each other share of the same class.  Upon  liquidation of the Fund,  holders are
entitled  to  share  pro  rata in the  net  assets  of the  Fund  available  for
distribution  to such  shareholders.  Shares of the 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 also are required, under certain circumstances,  to assist shareholders
in communicating with other shareholders.

           For  information  relating to mandatory  redemption of Fund shares or
their  redemption  at the option of the Trust under certain  circumstances,  see
"Redemption of Shares".

     As of August 31, 1999,  the following  owned of record or, to the knowledge
of management,  beneficially owned more than 5% of the outstanding shares of the
Fund

Institutional Shares: JPMIM (99.94%).

           The  address  of each  owner  listed  above is c/o  JPMIM,  522 Fifth
Avenue,  New York,  NY 10036.  As of the date of this  Statement  of  Additional
Information, Trustees, Members of the Advisory Board and the officers as a group
owned less than 1% of the shares of the Fund.

TAXES

           The following discussion of tax consequences is based on U.S. federal
tax laws in effect on the date of the Statement of Additional Information. These
laws and  regulations  are subject to change by  legislative  or  administrative
action, possibly on a retroactive basis.

           The Fund  intends to  qualify  and remain  qualified  as a  regulated
investment  company under  Subchapter M of the Code.  As a regulated  investment
company, the 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 the 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  the  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,  the  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.  If the Fund does not
qualify as a regulated  investment  company, it will be treated for tax purposes
as an ordinary corporation subject to federal income tax.

           Under the  Code,  the 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. The 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 the
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.

           Distributions  of net  investment  income and realized net short-term
capital gain in excess of net  long-term  capital  loss is generally  taxable to
shareholders of the Fund as ordinary income whether such distributions are taken
in cash or reinvested in additional  shares.  The Fund expects 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 the Fund,  the  overdistribution
would be considered a return of capital rather than a dividend payment. The Fund
intends 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 the 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 the Fund. In general,
long-term  capital gain of an  individual  shareholder  will be subject to a 20%
rate  of tax.  Investors  should  consult  their  tax  advisors  concerning  the
treatment of capital gains and losses.

           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 a put option 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 the
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 the Fund  pursuant to the  exercise of a put option  written by it,
the  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.

           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 the 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  disposition  of
foreign currency or to certain foreign currency contracts, or to fluctuations in
exchange  rates  between  the time the Fund  accrues  income or  receivables  or
expenses or other liabilities denominated in a foreign currency and the time the
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 the 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.

            Forward currency  contracts,  options and futures  contracts entered
into by the 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  forward  currency  contracts,  options  and  futures  contracts  or  on  the
underlying securities.

            Certain options,  futures and foreign currency contracts held by the
Fund at the end of each  taxable  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.
However,  gain or loss recognized on certain foreign currency  contracts will be
treated as ordinary income or loss.

           The Fund may invest in Equity  Securities of foreign issuers.  If the
Fund purchases  shares in certain foreign  corporations  (referred to as passive
foreign investment  companies ("PFICs") under the Code), the Fund may be subject
to federal income tax on a portion of an "excess distribution" from such foreign
corporation, including any gain from the disposition of such shares, even though
a portion of such income may have to be distributed as a taxable dividend by the
Fund to its shareholders.  In addition,  certain interest charges may be imposed
on the Fund as a result of such  distributions.  Alternatively,  the Fund may in
some cases be  permitted to include  each year in its income and  distribute  to
shareholders a pro rata portion of the foreign investment fund's income, whether
or not distributed to the Fund.

           The Fund will be permitted to "mark to market" any  marketable  stock
held by it in a PFIC.  If the 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.  The 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 the Fund for
prior taxable years.

           If a correct and certified taxpayer  identification  number is not on
file, the 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,  the 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 (or any  successor  form) is
provided.  Transfers by gift of shares of the 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 the 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.

           Foreign  Taxes.  It is  expected  that the  Funds may be  subject  to
foreign  withholding  taxes  or other  foreign  taxes  with  respect  to  income
(possibly including,  in some cases, capital gains) received from sources within
foreign countries.

           State  and Local  Taxes.  The Fund may be  subject  to state or local
taxes in  jurisdictions  in which the Fund is deemed  to be doing  business.  In
addition,  the treatment of the Fund and its  shareholders  in those states that
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 the Fund is liable for any
income or franchise tax in The Commonwealth of Massachusetts,  provided that the
Fund continues to qualify as a regulated  investment  company under Subchapter M
of the Code.

ADDITIONAL INFORMATION

           Telephone  calls to the Fund, 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. 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 the 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    financial    statements    and   the    report    thereon   of
PricewaterhouseCoopers  LLP are  incorporated  herein by reference to the Fund's
May 31,  1999  annual  report  filing  made with the SEC on  September  23, 1999
pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder  (Accession
Number  0001047469-99-036598).  The financial  statements are available  without
charge upon request by calling J.P. Morgan Funds Services at (800) 766-7722.


<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.


<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





                                   July , 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 J.P.  MORGAN TAX AWARE  DISCIPLINED  EQUITY  FUND AND J.P.
MORGAN TAX AWARE U.S.  EUQITY FUND:  SELECT SHARES 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>
<CAPTION>

                                                           Table of Contents
<S>                                                                                <C>
                                                                                  Page
GENERAL..............................................................................1
INVESTMENT OBJECTIVES AND POLICIES...................................................1
INVESTMENT RESTRICTIONS...........................................................  16
TRUSTEES, MEMBERS OF THE ADVISORY BOARD AND OFFICERS................................18
CODE OF ETHICS.......................................................................23
INVESTMENT ADVISOR.................................................................. 23
DISTRIBUTOR..........................................................................25
CO-ADMINISTRATOR.....................................................................26
SERVICES AGENT.......................................................................26
CUSTODIAN AND TRANSFER AGENT.........................................................27
SHAREHOLDER SERVICING................................................................28
FINANCIAL PROFESSIONALS..............................................................29
INDEPENDENT ACCOUNTANTS..............................................................29
EXPENSES.............................................................................29
PURCHASE OF SHARES...................................................................30
REDEMPTION OF SHARES.................................................................31
EXCHANGE OF SHARES...................................................................33
DIVIDENDS AND DISTRIBUTIONS..........................................................33
NET ASSET VALUE......................................................................33
PERFORMANCE DATA.....................................................................35
PORTFOLIO TRANSACTIONS...............................................................36
DESCRIPTION OF SHARES................................................................39
TAXES................................................................................40
ADDITIONAL INFORMATION...............................................................44
FINANCIAL STATEMENTS.................................................................44

</TABLE>


<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 two  classes of the U.S.
Equity Fund (Select Shares and Institutional 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 (select  shares) -- 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, MEMBERS OF THE ADVISORY BOARD AND OFFICERS

Trustees

           The Trustees of the Trust,  their  principal  occupations  during the
past five years,  business addresses and dates of birth are set forth below. The
mailing  address of the Trustees is c/o Pierpont  Group Inc.,  461 Fifth Avenue,
New York, New York 10017.

     FREDERICK S. ADDY--Trustee;  Retired;  Prior to April 1994,  Executive Vice
President and Chief Financial Officer,  Amoco Corporation.  His date of birth is
January 1, 1932.

     WILLIAM  G.  BURNS--Trustee;   Retired,  Former  Vice  Chairman  and  Chief
Financial Officer, NYNEX. 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 date of birth is May 23, 1934.

           MATTHEW  HEALEY1--Trustee,  Chairman  and  Chief  Executive  Officer;
Chairman, Pierpont Group, Inc., since prior to 1993. 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 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
                                        AGGREGATE TRUSTEE COMPENSATION PAID   PORTFOLIOS (*), J.P. MORGAN INSTITUTIONAL FUNDS,
NAME OF TRUSTEE                              BY THE TRUST DURING 1999                     J.P.MORGAN FUNDS&THE TRUST DURING 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 (***)Chairman and Chief   $1,018                                       $75,000
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.

James J. Schonbachler -- Retired;  Prior to September,  1998, Managing Director,
Bankers Trust Company and Chief  Executive  Officer and Director,  Bankers Trust
A.G., Zurich and BT Brokerage Corp. His date of birth is January 26, 1943.

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 c/o Pierpont  Group Inc., 461 Fifth Avenue,
New York, New York 10017. 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.

     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.

           ELBA  VASQUEZ-Vice  President  and  Assistant  Secretary.  Currently,
services as Vice  President.  Prior serviced as Assistant  Vice President  since
1997 and  Sales  Associate  since  May  1996 of FDI.  (March  1990 to May  1996,
employed in various mutual fund sales and marketing  positions by the U.S. Trust
Company of New York. Her date of birth is December 14, 1961.
CODE OF ETHICS

           The Trust and the Advisor  have adopted  codes of ethics  pursuant to
Rule 17j-1 under the 1940 Act. Each of these codes permits  personnel subject to
such code to invest in securities, including securities that may be purchased or
held by the  Portfolio.  Such  purchases,  however,  are  subject to  procedures
reasonably necessary to prevent a fraud or deceit on the Trust.


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 $376 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 375
research analysts,  capital market researchers,  portfolio managers, and traders
and one of 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,  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. Morgan is also a wholly
owned subsidiary of J.P. Morgan, which is a bank holding company organized under
the laws of the State of Delaware.

           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 with any of its affiliated  persons,  with the
exception of certain investment  management  affiliates of J.P. Morgan or broker
affiliates of J.P. Morgan which transactions of behalf of the Fund.

           As compensation  for the services  rendered and related expenses such
as salaries  of  advisory  personnel  borne by the  Advisor  under the  Advisory
Investment 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."

           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, dated August 1,
1996,  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% for the Select
Shares and .10% for the  Institutional  Shares (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 (Select Shares):  -- 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.

           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 each Fund, as described
in the  Prospectuses,  to the extent  necessary  to maintain  each of the Fund's
total  operating  expenses at the  following  annual rates of each of the Fund's
average daily net assets.
These limits do not cover extraordinary expenses.

<TABLE>
<CAPTION>
<S>                                                              <C>
Tax Aware Disciplined Equity Fund:                            0.55% until February 28, 2001
Tax Aware U.S. Equity Fund (Select Shares):                   0.85% until February 28, 2001
Tax Aware U.S. Equity Fund (Institutional Shares):            0.70% until February 28, 2001
</TABLE>

           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 (Select  Share):  -- 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 and J.P.  Morgan Tax Aware U.S.
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 (Select Shares) (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%.

     Tax Aware U.S. Equity Fund Institutional  Shares  performance  reflexes the
Select Shares Performance in the Prospectus. These lower operating expenses than
those of the Institutional Shares.

           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  Disciplined  Equity  Fund - Charles  Schwab & Co.  Inc.  Special
Custody  Account for the benefit of  Customers  (30.78%);  American  Contractors
Insurance Group (6.38%).

     Tax Aware U.S.  Equity  Fund  (Select  Shares) - Charles  Schwab & Co. Inc.
Special Custody Account for the benefit of Customers (13.16%).

           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 Accession
Name of Fund                                                        Number
------------------------------------------------------------------- ----------------------------------------------------------------
-------------------------------------------------------------------
Tax Aware Disciplined Equity Fund                                   10/31/99; 1/05/00;
                                                                    0000912057-00-000267
-------------------------------------------------------------------
------------------------------------------------------------------- ----------------------------------------------------------------
Tax Aware U.S. Equity Fund: Select Shares                           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

     -  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.




<PAGE>

ITEM 23.  EXHIBITS.

     (a) Declaration of Trust.(1)

     (a)1  Amendment  No.  1 to  Declaration  of  Trust,  Amended  and  Restated
Establishment  and  Designation  of Series and  Classes of Shares of  Beneficial
Interest.(2)

     (a)2 Amendment No. 2 to  Declaration of Trust,  Second Amended and Restated
Establishment  and  Designation  of Series and  Classes of Shares of  Beneficial
Interest.(4)

     (a)3 Amendment No. 3 to  Declaration  of Trust,  Third Amended and Restated
Establishment  and  Designation  of Series and  Classes of Shares of  Beneficial
Interest.(6)

     (a)4 Amendment No. 4 to  Declaration of Trust,  Fourth Amended and Restated
Establishment  and  Designation  of Series and  Classes of Shares of  Beneficial
Interest.(8)

     (a)5 Amendment No. 5 to  Declaration  of Trust,  Fifth Amended and Restated
Establishment  and  Designation  of Series and  Classes of Shares of  Beneficial
Interest.(10)

     (a)6 Amendment No. 6 to  Declaration  of Trust. To be filed by amendment.

      (b)      Restated By-Laws.(2)

 (b)(1) Amendment to Restated By-Laws of Registrant. (12)

     (d) Amended  Investment  Advisory  Agreement  between  Registrant  and J.P.
Morgan Investment Management Inc. ("JPMIM").(9)

(d)1 Amended  Investment  Advisory  Agreement  between  Registrant  and J.P.
Morgan Investment Management Inc. To be filed by amendment.

     (e)  Form  of   Distribution   Agreement   between   Registrant  and  Funds
Distributor, Inc. ("FDI").(2)

     (g) Form of Custodian Contract between Registrant and State Street Bank and
Trust Company ("State Street").(2)

     (g)2 Custodian  Contract  between  Registrant  and Bank of New  York.(12)

     (h)1 Form of Co-Administration Agreement between Registrant and FDI.(2)

     (h)2 Form of  Administrative  Services  Agreement  between  Registrant  and
Morgan Guaranty Trust Company of New York ("Morgan").(2)

     (h)2(a)  Form  of  Restated   Administrative   Services  Agreement  between
Registrant and Morgan. To be filed by amendment.

     (h)3 Form of Transfer Agency and Service Agreement  between  Registrant and
State Street.(2)

     (h)4 Form of Restated  Shareholder  Servicing  Agreement between Registrant
and Morgan.(9)

     (h)5 Form of Shareholder  Servicing  Agreement between Registrant
and Morgan.  To be filed by amendment.

      (j)      Consent of independent accountants. To be filed by amendment.

      (l)     Purchase agreement with respect to Registrant's initial shares.(2)

      (n)      Financial Data Schedules (not applicable)

      (o)1     18f-3 Plan for J.P. Morgan California Bond Fund.(3)

      (o)2     18f-3 Plan for J.P. Morgan Global 50 Fund. (7)

     (o)3  18f-3 Plan for J.P.  Morgan Tax Aware  Enhanced  Income  Fund (11)

(p)(1)  Code of  Ethics  for J.P.  Morgan Series Trust. (13)

(p)(2) Code of Ethics for J.P.  Morgan  Investment  Management  Inc. (13)

 (p)(3) Code of Ethics for Funds Distributor Inc. (13)

      -------------------
      (1)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on August 29, 1996 (Accession No.
               0000912057-96-019242).

      (2)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on November 8, 1996 (Accession No.
               0001016964-96-000034).

      (3)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on February 10, 1997 (Accession No.
               0001016964-97-000014).

      (4)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on June 19, 1997 (Accession No.
               0001016964-97-000117).

      (5)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on October 21, 1997 (Accession No.
               0001042058-97-000005).

      (6)      Incorporated herein from Registrant's  registration  statement on
               Form   N-1A   as   filed   on   January   2,   1998    (Accession
               No.0001041455-98-000012).

      (7)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on March 2, 1998 (Accession No.
               0001042058-98-000030).

      (8) Incorporated  herein from Registrant's  registration  statement on
          Form N-1A as filed on July 28, 1998 (Accession No.
          0001041455-98-000039).

      (9)      Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on August 25, 1998 (Accession No.
               0001041455-98-000054).

      (10) Incorporated herein from Registrant's  registration statement on Form
      N-1A as filed on December 30, 1998(Accession No. 0001041455-98-000054).

      (11)     Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on February 1, 1999 (Accession No.
               0000899681-99-000024).

(12)     Incorporated herein from Registrant's  registration  statement on
               Form   N-1A   as   filed   on   February 28, 2000    (Accession
               No. 0001041455-00-000052).

      (13)    Incorporated herein from Registrant's  registration  statement on
               Form N-1A as filed on April 17, 2000 (Accession No.
               0001041455-00-000096).



ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.

               Not applicable.

ITEM 25. INDEMNIFICATION.

 Reference  is made to  Section  5.3 of  Registrant's  Declaration  of Trust and
Section 5 of Registrant's Distribution Agreement.

 Registrant,  its Trustees and officers are insured against certain  expenses in
connection with the defense of claims, demands,  actions, suits, or proceedings,
and certain liabilities that might be imposed as a result of such actions, suits
or proceedings.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933,  as amended (the "1933 Act"),  may be  permitted to  directors,  trustees,
officers and controlling persons of the Registrant and the principal underwriter
pursuant to the  foregoing  provisions  or otherwise,  the  Registrant  has been
advised that in the opinion of the SEC such  indemnification  is against  public
policy as expressed  in the 1933 Act and is,  therefore,  unenforceable.  In the
event that a claim for indemnification  against such liabilities (other than the
payment by the Registrant of expenses  incurred or paid by a director,  trustee,
officer,  or controlling person of the Registrant and the principal  underwriter
in connection with the successful defense of any action, suite or proceeding) is
asserted  against  the  Registrant  by  such  director,   trustee,   officer  or
controlling person or principal  underwriter in connection with the shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy  as  expressed  in the  1933  Act  and  will  be  governed  by the  final
adjudication of such issue.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.

         JPMIM is a registered  investment adviser under the Investment Advisers
Act of 1940, as amended,  and is a wholly owned  subsidiary of J.P. Morgan & Co.
Incorporated. JPMIM manages employee benefit funds of corporations, labor unions
and  state  and  local  governments  and the  accounts  of  other  institutional
investors, including investment companies.

         To the knowledge of the Registrant, none of the directors, except those
set forth below, or executive  officers of JPMIM, is or has been during the past
two  fiscal  years  engaged  in any  other  business,  profession,  vocation  or
employment of a substantial  nature,  except that certain officers and directors
of JPMIM also hold various  positions  with,  and engage in business  for,  J.P.
Morgan & Co. Incorporated, which owns all the outstanding stock of JPMIM.

ITEM 27. PRINCIPAL UNDERWRITERS.

     (a)  Funds   Distributor,   Inc.  (the   "Distributor")  is  the  principal
underwriter of the Registrant's shares.

     Funds  Distributor,  Inc. acts as principal  underwriter  for the following
investment companies other than the Registrant:

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Funds
J.P. Morgan Institutional Funds
J.P. Morgan Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

     Funds Distributor,  Inc. does not act as depositor or investment adviser to
any of the investment companies.

     Funds  Distributor,  Inc. is registered  with the  Securities  and Exchange
Commission as a  broker-dealer  and is a member of the National  Association  of
Securities Dealers. Funds Distributor, Inc. is located at 60 State Street, Suite
1300,  Boston,  Massachusetts  02109.  Funds  Distributor,  Inc.  is an indirect
wholly-owned  subsidiary of Boston  Institutional Group, Inc., a holding company
all of whose outstanding shares are owned by key employees.

(b)
 The  following is a list of the executive  officers,  directors and partners of
Funds Distributor, Inc.:

Director, President and Chief Executive Officer:     Marie E. Connolly
Executive Vice President:                            George Rio
Executive Vice President:                            Donald R. Roberson
Executive Vice President:                            William S. Nichols
Director, Senior Vice President, Treasurer and
  Chief Financial Officer:                           Joseph F. Tower, III
Senior Vice President, General Counsel, Chief
  Compliance Officer, Secretary and Clerk            Margaret M. Chambers
Senior Vice President:                               Paula R. David
Senior Vice President:                               Judith K. Benson
Senior Vice President:                               Gary S. MacDonald
Director, Chairman of the Board, Executive
   Vice President                                    William J. Nutt

(c) Not applicable

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.

         All accounts,  books and other  documents  required to be maintained by
Section  31(a) of the  Investment  Company  Act of 1940,  as amended  (the "1940
Act"), and the Rules thereunder will be maintained at the offices of:

     Morgan  Guaranty  Trust  Company  of New York and  J.P.  Morgan  Investment
Management  Inc.: 60 Wall Street,  New York,  New York  10260-0060,  9 West 57th
Street,  New York, New York 10019 or 522 Fifth Avenue,  New York, New York 10036
(records relating to its functions as investment advisor,  shareholder servicing
agent and administrative services agent).

     The Bank of New York,  1 Wall  Street,  New York,  New York 10086  (records
relating to its functions as custodian and fund accounting agent).

     State Street Bank and Trust  Company:  1776 Heritage  Drive,  North Quincy,
Massachusetts  02171 (records  relating to its functions as custodian,  transfer
agent and dividend disbursing agent).

     Funds Distributor, Inc.: 60 State Street, Suite 1300, Boston, Massachusetts
02109 (records relating to its functions as distributor and co-administrator).

     Pierpont Group,  Inc.: 461 Fifth Avenue,  New York, New York 10017 (records
relating  to its  assisting  the  Trustees  in  carrying  out  their  duties  in
supervising the Registrant's affairs).

ITEM 29. MANAGEMENT SERVICES.

               Not applicable.

ITEM 30. UNDERTAKINGS.

      (a)      If the  information  called  for  by  Item  5A of  Form  N-1A  is
               contained  in the  latest  annual  report  to  shareholders,  the
               Registrant  shall  furnish  each person to whom a  prospectus  is
               delivered with a copy of the Registrant's latest annual report to
               shareholders upon request and without charge.

      (b)      The  Registrant  undertakes  to comply with Section  16(c) of the
               1940  Act  as  though  such  provisions  of  the  1940  Act  were
               applicable to the Registrant, except that the request referred to
               in the  second  full  paragraph  thereof  may  only  be  made  by
               shareholders  who  hold  in the  aggregate  at  least  10% of the
               outstanding shares of the Registrant, regardless of the net asset
               value of shares held by such requesting shareholders.

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements  of the  Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration  statement
to be signed on its behalf by the undersigned,  thereto duly authorized,  in the
City of New York and State of New York on the 23rd day of June, 2000.

J.P. MORGAN SERIES TRUST


By       /s/ Elba Vasquez
         ---------------------------------------
         Elba Vasquez
         Vice President and Assistant Secretary

Pursuant to the  requirements of the Securities Act of 1933,  this  registration
statement  has been  signed  below by the  following  persons in the  capacities
indicated on June 23, 2000.

/s/ George A. Rio
------------------------------
George A. Rio
President and Treasurer
Officer of the Portfolios

Matthew Healey*
-----------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)

Frederick S. Addy*
------------------------------
Frederick S. Addy
Trustee

William G. Burns*
------------------------------
William G. Burns
Trustee

Arthur C. Eschenlauer*
------------------------------
Arthur C. Eschenlauer
Trustee

Michael P. Mallardi*
------------------------------
Michael P. Mallardi
Trustee


*By      /s/ Elba Vasquez
         ----------------------------
         Elba Vasquez
         as attorney-in-fact pursuant to a power of attorney.

<PAGE>

INDEX TO EXHIBITS

Exhibit No.       Description of Exhibit
-------------    ------------------------
None




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