<PAGE>
LETTER TO THE SHAREHOLDERS OF THE J.P. MORGAN GLOBAL 50 FUND
December 1, 1999
Dear Shareholder:
We are pleased to report that the J.P. Morgan Global 50 Fund delivered an
exceptional total return of 35.18% for the 12 months ended October 31, 1999,
exceeding the return of the Lipper Global Funds Average by over 700 basis points
and the MSCI World Index by over 1000 basis points.
The fund's net asset value on October 31 was $18.06 per share, increasing from
$13.36 per share over the 12 months. The fund's net assets stood at
approximately $101 million on October 31.
Included in this report is an interview with Shawn Lytle, a member of the
portfolio management team. This interview is designed to reflect what happened
during the reporting period, as well as provide an outlook for the months ahead.
As chairman and president of Asset Management Services, we thank you for
investing with J.P. Morgan. Should you have any comments or questions, please
telephone your Morgan representative or J.P. Morgan Funds Services at
800-521-5411.
Sincerely yours,
/s/ Ramon de Oliveira /s/ Keith M. Schappert
Ramon de Oliveira Keith M. Schappert
Chairman of Asset Management Services President of Asset Management Services
J.P. Morgan & Co. Incorporated J.P. Morgan & Co. Incorporated
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<S> <C>
LETTER TO THE SHAREHOLDERS.....................1
FUND PERFORMANCE ..............................2
PORTFOLIO MANAGER Q&A..........................3
FUND FACTS AND HIGHLIGHTS......................5
FINANCIAL STATEMENTS...........................8
- --------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
EXAMINING PERFORMANCE
There are several ways to evaluate a mutual fund's historical performance
record. One approach is to look at the growth of a hypothetical investment of
$10,000. The chart at right shows that $10,000 invested on May 31, 1998,* would
have grown to $12,040 on October 31, 1999.
Another way to look at performance is to review a fund's average annual total
return. This figure takes the fund's actual (or cumulative) return and shows
what would have happened if the fund had achieved that return by performing at a
constant rate each year. Average annual total returns represent the average
yearly change of a fund's value over various time periods, typically one, five,
or ten years (or since inception). Total returns for periods of less than one
year are not annualized and provide a picture of how a fund has performed over
the short term.
Growth of $10,000 since fund inception* May 31, 1998 - October 31, 1999
[GRAPH]
<TABLE>
<CAPTION>
J.P. Morgan MSCI Lipper Global
Global 50 Fund World Index Funds Average
<S> <C> <C> <C>
5/31/98 10,000 10,000 10,000
6/30/98 9,953 10,236 10,043
7/31/98 10,047 10,218 10,010
8/31/98 8,260 8,854 8,521
9/30/98 7,867 9,009 8,595
10/31/98 8,907 9,822 9,172
11/30/98 9,513 10,404 9,683
12/31/98 9,820 10,911 10,146
1/31/99 10,193 11,148 10,372
2/28/99 9,893 10,850 10,062
3/31/99 10,673 11,300 10,432
4/30/99 11,280 11,744 10,933
5/31/99 10,800 11,313 10,626
6/30/99 11,533 11,840 11,210
7/31/99 11,520 11,802 11,226
8/31/99 11,660 11,780 11,204
9/30/99 11,467 11,664 11,097
10/31/99 12,040 12,269 11,573
</TABLE>
LIPPER PERFORMANCE AVERAGES ARE CALCULATED BY TAKING AN ARITHMETIC AVERAGE OF
THE RETURNS OF THE FUNDS IN THE GROUP. THE AVERAGE CUMULATIVE RETURNS WHICH
RESULT FROM THIS METHODOLOGY WILL DIFFER FROM ANNUALIZING THE GROWTH OF THE
MINIMUM INITIAL INVESTMENT.
<TABLE>
<CAPTION>
PERFORMANCE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
---------------------- ----------------------------------
THREE SIX ONE SINCE
AS OF OCTOBER 31, 1999 MONTHS MONTHS YEAR INCEPTION*
- ------------------------------------------------------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
J.P. Morgan Global 50 Fund 4.51% 6.74% 35.18% 14.00%
MSCI World Index** 3.95% 4.47% 24.91% 15.53%
Lipper Global Funds Average 3.11% 5.98% 28.13% 10.33%
As of September 30, 1999
- ------------------------------------------------------------------------------------- ----------------------------------
J.P. Morgan Global 50 Fund -0.58% 7.43% 45.76% 10.81%
MSCI World Index** -1.48% 3.22% 29.47% 12.24%
Lipper Global Funds Average -1.02% 6.37% 30.51% 7.49%
</TABLE>
*The fund commenced operations on May 29, 1998, and has provided an average
annual total return of 13.92% from that date through October 31, 1999. For the
purpose of comparison, the "since inception" returns are calculated from May 31,
1998, the first date when data for the fund's benchmark and its Lipper category
average were available.
**The MSCI World Index is an unmanaged index that measures stock market
performance worldwide using the share prices of approximately 1,600 companies
listed on stock exchanges in 22 countries. It does not include fees or operating
expenses and is not available for actual investment. Past performance is no
guarantee of future results. Returns are net of fees and reflect the
reimbursement of certain fund expenses as described in the prospectus. Had
expenses not been subsidized returns would have been lower. Lipper Analytical
Services, Inc. is a leading source for mutual fund data.
2
<PAGE>
PORTFOLIO MANAGER Q&A
[PHOTO]
Following is an interview with Shawn Lytle, vice president, a member of the
London-based portfolio management team of the J.P. Morgan Global 50 Fund. Shawn
joined J.P. Morgan in 1992. Prior to joining the portfolio management team in
London, Shawn was responsible for new business development for independent U.S.
money managers. Shawn holds a B.A. in business administration from Georgetown
University. This interview was conducted on November 19, 1999, and reflects his
views on that date.
THE FUND'S PERFORMANCE HAS BEEN EXCEPTIONAL - UP 35.18% IN THE 12 MONTHS ENDED
OCTOBER 31, 1999. WHAT LED TO SUCH A STRONG RETURN?
SL: Remember that last year at this time we were coming out of the tremendous
turmoil of the summer of 1998, when Russia's currency devalued and concerns
about the economies in Latin American and Asia drove equity prices down
worldwide. Fortunately, the Federal Reserve and other central banks acted
quickly. In the U.S., short-term interest rates were reduced by 75 basis points.
That surge in liquidity helped stock markets rally worldwide toward the end of
the year, so markets that had sold off earlier snapped back sharply.
THAT EXPLAINS THE FUND'S STRONG ABSOLUTE PERFORMANCE. HOW DID IT OUTPERFORM THE
LIPPER GLOBAL FUNDS AVERAGE BY 700 BASIS POINTS?
SL: We've had strong stock selection across the board and specifically in two
areas: in the technology sector and in Japan. Stock selection in Japan has been
particularly effective.
WHY DID TECHNOLOGY WORK?
SL: Our holdings in both the United States and worldwide outperformed the world
technology sector. In the U.S., we owned EMC, a data storage leader,
particularly in the Internet. We sold it in June and two months later bought
Cisco. But remember we can search worldwide for the best stocks in each sector.
We happened to find better value in European and Japanese technology companies,
even though the U.S. has twice as many technology companies. One of our best
performers was ST Microelectronics, the French semiconductor maker. The
semiconductor industry was at the bottom of its cycle last September. It
rebounded sharply in the fourth quarter of 1998 and has continued to perform
well to date in 1999. We also looked at U.S. semiconductor maker Texas
Instruments at the time, but we preferred ST Micro because it was selling at a
lower price/earnings multiple, it offered pure exposure to the semiconductor
industry, it made very good chips used in the popular Nokia cellular telephones,
and it had good capacity management, a big issue in the industry.
Another European technology stock we liked was Philips (Netherlands), a consumer
electronics company with interests in electronics and semiconductors. It has
done very well by restructuring, and it has been able to drive its cost-cutting
gains through to earnings.
3
<PAGE>
WHAT WORKED IN JAPAN?
SL: We held three technology companies that each more than doubled: Sony, Rohm
and Softbank. Sony, of course, is one of the leading consumer electronics
companies in the world, and its new PlayStation has attracted considerable
attention. Rohm is a basic electronics company and Softbank, which we purchased
midway through the period, has extensive Internet holdings. In other Japanese
sectors, stock selection was also strong. Companies like Yamanouchi in
healthcare and Mitsubishi Chemical in chemicals and Mitsui Trust in banking all
outperformed their global peers.
WHAT MADE TECHNOLOGY WORK SO WELL?
SL: Our success in technology during the period is a perfect example of how we
want the investment process to work. We divide the equity markets worldwide into
19 sectors, and pick the best opportunities in each sector, regardless of
region. In technology, we found European and Japanese technology companies at
more reasonable prices and with better expected returns than in the U.S. That
worked because valuations were high in the U.S. over the last 12 months.
SO THE EMPHASIS IS ON STOCK SELECTION, RIGHT?
SL: Right. We're bottom-up stock pickers, letting our stock selection dictate
our country weights. In sectors, we are well diversified, but not neutral. We
can overweight a sector. For example, we currently have an overweight in
telecommunications. In countries, our stock selection led us to hold more
Japanese stocks than the median portfolio manager. So when the Japanese stock
market outperformed all other industrialized stock markets in the world over the
period, that validated our bottom-up approach. We overweighted Japan last
October because as the yen appreciated, we thought stocks of its exporters like
Sony and Honda were unduly punished.
WHAT IS YOUR OUTLOOK?
SL: We're going to continue to do what we've been doing - working with our
expert analysts around the world to try to identify undervalued companies. We
are continuing to find more of these companies in Europe and the Far East than
in the United States, where we believe equity values are stretched. We like
Japanese stocks because we see an economy which is finally stabilizing and
corporate restructuring which is finally taking hold.
HOW ABOUT EUROPE?
SL: We hold a larger overweight in Europe than we do in Japan and we continue to
find attractive stocks in many sectors. For example, in telecommunications, we
own five European companies, including Mannesmann in Germany. The changing
dynamics in the telecommunications markets there, with the explosion of wireless
use and mergers and acquisitions activity, make this an exciting sector. In
fact, total European mergers and acquisitions activity surpassed that of the
U.S. in the third quarter for the first time ever. We expect this trend to
continue. We see the best value worldwide in Europe for three reasons: 1) strong
economic growth; 2) we expect merger and acquisition activity to continue; and
3) corporate restructuring is continuing at a rapid pace.
4
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
J.P. Morgan Global 50 Fund seeks to provide a high total return from a
concentrated portfolio of global equity securities.
- --------------------------------------------------------------------------------
COMMENCEMENT OF INVESTMENT OPERATIONS
5/29/98
- --------------------------------------------------------------------------------
FUND NET ASSETS AS OF 10/31/99
$101,070,440
- --------------------------------------------------------------------------------
DIVIDEND PAYABLE DATE
12/20/99
- --------------------------------------------------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/20/99
EXPENSE RATIO
The fund's current annual expense ratio of 1.50% covers shareholders' expenses
for custody, tax reporting, investment advisory and shareholder services after
reimbursement. The fund is no-load and does not charge any sales, redemption, or
exchange fees. There are no additional charges for buying, selling, or
safekeeping fund shares, or for wiring redemption proceeds from the fund.
FUND HIGHLIGHTS
ALL DATA AS OF OCTOBER 31, 1999
COUNTRY ALLOCATION
(PERCENTAGE OF TOTAL INVESTMENTS)
[CHART]
- - EUROPE/AFRICA 45.3%
- - UNITED STATES 20.0%
- - JAPAN 18.6%
- - ASIA PACIFIC EX-JAPAN 10.9%
- - CANADA 3.4%
- - LATIN AMERICA 1.8%
<TABLE>
<CAPTION>
LARGEST EQUITY HOLDINGS % OF TOTAL INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
Mitsui Trust & Banking Co. (Japan) 3.9%
Mitsubishi Chemical Corp. (Japan) 3.0%
Sony Corp. (Japan) 2.9%
Christian Dior SA (France) 2.7%
DBS Group Holdings Ltd. (Singapore) 2.6%
Rohm Co. Ltd. (Japan) 2.5%
Stora Enso OYJ, R Shares (Finland) 2.5%
Koninklijke Philips Electronics NV (Netherlands) 2.5%
Cisco Systems Inc. (United States) 2.5%
Allied Zurich PLC (United Kingdom) 2.5%
</TABLE>
5
<PAGE>
DISTRIBUTED BY FUNDS DISTRIBUTOR, INC. J.P. MORGAN INVESTMENT MANAGEMENT INC.
SERVES AS INVESTMENT ADVISOR. SHARES OF THE FUND ARE NOT BANK DEPOSITS AND ARE
NOT GUARANTEED BY ANY BANK, GOVERNMENT ENTITY, OR THE FDIC. RETURN AND SHARE
PRICE WILL FLUCTUATE AND REDEMPTION VALUE MAY BE MORE OR LESS THAN ORIGINAL
COST.
Reference to specific securities are not intended to be or should be interpreted
as recommendations to buy or sell the securities. Opinions expressed are based
on current market conditions and are subject to change without notice. The fund
invests in foreign securities which are subject to special risks such as
economic and political instability and currency fluctuation.
CALL J.P. MORGAN FUNDS SERVICES AT (800) 521-5411 FOR A PROSPECTUS CONTAINING
MORE COMPLETE INFORMATION ABOUT THE FUND, INCLUDING MANAGEMENT FEES AND OTHER
EXPENSES. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
6
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
COMMON STOCK (86.2%)
AUSTRALIA (4.1%)
News Corp. Ltd. (Broadcasting & Publishing)(s)... 279,000 $ 2,016,146
North Ltd. (Metals & Mining)(s).................. 1,078,400 2,082,223
------------
4,098,369
------------
AUSTRIA (1.9%)
Bank Austria AG (Banking)(s)..................... 38,200 1,897,897
------------
CANADA (1.4%)
Newcourt Credit Group, Inc. (Financial
Services)(s)................................... 86,500 1,421,844
------------
CHINA (1.7%)
Huaneng Power International, Inc. (Spon. ADR)
(Energy Source)(s)............................. 94,000 1,139,750
Huaneng Power International, Inc., H Shares
(Energy Source)(s)............................. 2,018,000 629,853
------------
1,769,603
------------
FINLAND (2.4%)
Stora Enso OYJ, R Shares (Forest Products &
Paper)(s)...................................... 184,653 2,454,353
------------
FRANCE (11.1%)
Banque Nationale de Paris (Financial
Services)(s)................................... 22,417 1,967,377
Christian Dior SA (Retail)(s).................... 15,050 2,692,277
Rhodia SA (Chemicals)(s)......................... 96,067 1,852,823
STMicroelectronics NV (Electronics)(s)........... 27,180 2,385,391
Total SA, B Shares (Oil-Services)(s)............. 17,319 2,339,135
------------
11,237,003
------------
GERMANY (2.2%)
Mannesman AG (Diversified Manufacturing)(s)...... 14,000 2,199,849
------------
HONG KONG (2.3%)
Hongkong Electric Holdings Ltd. (Electric)(s).... 749,500 2,291,085
------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
IRELAND (0.3%)
Eircom PLC (Telecommunication Services)(s)+...... 63,200 $ 262,384
------------
ITALY (1.9%)
Telecom Italia SPA - RNC (Telecommunication
Services)(s)................................... 395,000 1,938,820
------------
JAPAN (18.1%)
Honda Motor Co. Ltd. (Automotive)(s)............. 48,000 2,023,763
Mitsubishi Chemical Corp. (Chemicals)(s)......... 638,000 2,891,662
Mitsui Trust & Banking Co. Ltd. (Banking)(s)..... 1,228,000 3,812,494
Rohm Co. Ltd. (Electronics)(s)................... 11,000 2,466,461
Softbank Corp. (Computer Software)(s)............ 5,000 2,074,549
Sony Corp. (Electronics)(s)...................... 18,200 2,835,683
Yamanouchi Pharmaceutical Co. Ltd.
(Pharmaceuticals)(s)........................... 47,400 2,148,351
------------
18,252,963
------------
NETHERLANDS (4.4%)
Koninklijke Philips Electronics NV
(Electronics)(s)............................... 23,857 2,444,804
Wolters Kluwer NV (Broadcasting &
Publishing)(s)................................. 61,500 2,053,600
------------
4,498,404
------------
SINGAPORE (2.5%)
DBS Group Holdings Ltd. (144A) (Financial
Services)(s)................................... 228,480 2,581,628
------------
SOUTH AFRICA (2.0%)
South African Breweries Ltd. (Food, Beverages &
Tobacco)(s)+................................... 234,698 2,054,787
------------
SPAIN (3.7%)
Actividades de Construccion y Servicios SA
(Construction & Housing)(s).................... 69,300 1,660,702
Iberdrola SA (Electric)(s)....................... 140,100 2,040,915
------------
3,701,617
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
8
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
SWITZERLAND (3.8%)
Nestle SA (Food, Beverages & Tobacco)(s)......... 1,100 $ 2,122,414
Swisscom AG (Telecommunication Services)(s)...... 5,500 1,676,634
------------
3,799,048
------------
UNITED KINGDOM (6.3%)
Allied Zurich PLC (Insurance)(s)................. 198,800 2,413,959
British Airways PLC (Airlines)(s)................ 385,000 1,964,731
Cable & Wireless PLC (Telecommunication
Services)(s)................................... 170,200 1,982,895
------------
6,361,585
------------
UNITED STATES (16.1%)
Ambac Financial Group, Inc. (Insurance)(s)....... 35,400 2,115,150
Bank of America Corp. (Banking)(s)............... 29,700 1,911,938
Bristol-Myers Squibb Co. (Pharmaceuticals)(s).... 28,800 2,212,200
Cisco Systems, Inc. (Computer Peripherals)(s)+... 32,700 2,420,822
Level 3 Communications, Inc. (Telecommunication
Services)(s)+.................................. 31,000 2,118,656
MCI WorldCom, Inc. (Telecommunication
Services)(s)+.................................. 25,800 2,213,156
Monsanto Co. (Chemicals)(s)...................... 42,900 1,651,650
Philip Morris Companies, Inc. (Food, Beverages &
Tobacco)(s).................................... 50,500 1,271,969
Waste Management, Inc. (Pollution Control)(s).... 21,000 385,875
------------
16,301,416
------------
TOTAL COMMON STOCK (COST $74,775,787).......... 87,122,655
------------
</TABLE>
<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCKS (3.8%)
<S> <C> <C>
CANADA (1.9%)
Seagram, Ltd., 7.5% (Food, Beverages &
Tobacco)....................................... 39,000 1,928,062
------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
UNITED STATES (1.9%)
Union Pacific Capital Trust, 6.25%
(Transportation)............................... 40,600 $ 1,986,863
------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST
$4,190,006)................................... 3,914,925
------------
</TABLE>
<TABLE>
<CAPTION>
PREFERRED STOCK (3.8%)
<S> <C> <C>
BRAZIL (1.8%)
Embratel Participacoes SA (ADR)
(Telecommunication Services)(s)................ 11,070 142,526
Tele Norte Leste Participacoes SA (ADR)
(Telecommunication Services)(s)................ 98,080 1,655,100
------------
1,797,626
------------
GERMANY (2.0%)
Volkswagen AG (Automotive)(s).................... 57,100 2,022,505
------------
TOTAL PREFERRED STOCK (COST $4,263,728)........ 3,820,131
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
CONVERTIBLE BONDS (2.0%)
NETHERLANDS (2.0%)
Telefonica Europe BV, 2.00% due 07/15/02
(Telecommunication Services) (cost
$1,925,461)+................................... $1,210,000 2,005,575
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS (1.3%)
<S> <C> <C>
REPURCHASE AGREEMENT (1.2%)
State Street Bank and Trust Co., 4.25% dated
10/31/99 due 11/01/99, proceeds $1,207,427
(collateralized by $1,040,000, U.S. Treasury
Note, 8.125% due 08/15/19, valued at
$1,232,400).................................... 1,207,000 1,207,000
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
9
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS (0.1%)
United States Treasury Bills, 5.09%(y) due
03/02/00(s).................................... $ 100,000 $ 98,377
------------
TOTAL SHORT-TERM INVESTMENTS (COST
$1,305,316)................................... 1,305,377
------------
TOTAL INVESTMENTS (COST
$86,460,298) (97.1%)........................................ 98,168,663
OTHER ASSETS IN EXCESS OF
LIABILITIES (2.9%).......................................... 2,901,777
------------
NET ASSETS (100.0%)........................................... $101,070,440
============
</TABLE>
- ------------------------------
Note: Based on the cost of investments of $86,656,488 for federal income tax
purposes at October 31, 1999, the aggregate gross unrealized appreciation and
depreciation was $18,129,658 and $6,617,483, respectively, resulting in net
unrealized appreciation of $11,512,175.
+ - Non-income producing security.
(s) - Security is fully or partially segregated with custodian as collateral for
futures contracts or with broker as initial margin for futures contracts.
$37,215,871 of the market value has been segregated.
(y) - Yield to maturity.
144A - Securities restricted for resale to Qualified Institutional Buyers.
ADR - American Depositary Receipt.
Spon. ADR - Sponsored ADR.
The Accompanying Notes are an Integral Part of the Financial Statements.
10
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
PERCENT OF
TOTAL INVESTMENTS
-----------------
<S> <C>
Telecommunication Services........................ 14.3%
Electronic........................................ 10.3%
Banking........................................... 7.8%
Food, Beverages & Tobacco......................... 7.5%
Chemicals......................................... 6.5%
Financial Services................................ 6.1%
Insurance......................................... 4.6%
Pharmaceuticals................................... 4.5%
Electric.......................................... 4.4%
Broadcasting & Publishing......................... 4.2%
Automotive........................................ 4.1%
Retail............................................ 2.7%
Forest Products & Paper........................... 2.5%
Computer Peripherals.............................. 2.5%
Oil Services...................................... 2.4%
Diversifed Manufacturing.......................... 2.2%
Metals & Mining................................... 2.1%
Computer Software................................. 2.1%
Airlines.......................................... 2.0%
Transportation.................................... 2.0%
Energy Source..................................... 1.8%
Construction & Housing............................ 1.7%
Short-Term Investment............................. 1.2%
Pollution Control................................. 0.4%
Government Obligation............................. 0.1%
-----
100.0%
=====
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
11
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $86,460,298) $ 98,168,663
Cash 11,461
Foreign Currency at Value (Cost $584,066) 569,775
Receivable for Investments Sold 4,104,732
Unrealized Appreciation of Forward Foreign
Currency Contracts 247,912
Dividends and Interest Receivable 88,808
Foreign Tax Reclaim Receivable 76,730
Receivable for Shares of Beneficial Interest Sold 31,148
Receivable for Expense Reimbursements 24,968
Deferred Organization Expenses 14,326
Variation Margin Receivable 5,176
Prepaid Trustees' Fees 289
------------
Total Assets 103,343,988
------------
LIABILITIES
Payable for Investments Purchased 1,398,903
Unrealized Depreciation of Forward Foreign
Currency Contracts 557,888
Advisory Fee Payable 103,311
Payable for Shares of Beneficial Interest
Redeemed 37,160
Shareholder Servicing Fee Payable 20,664
Organization Expenses Payable 16,250
Foreign Tax Withholding Payable 9,534
Administrative Services Fee Payable 4,158
Administration Fee Payable 67
Fund Services Fee Payable 55
Accrued Expenses 125,558
------------
Total Liabilities 2,273,548
------------
NET ASSETS $101,070,440
============
J.P. MORGAN SHARES
Applicable to 5,596,131 shares outstanding
(par value $0.001, unlimited shares authorized) $101,070,440
============
Net Asset Value, Offering and Redemption Price
per Share $18.06
-----
-----
ANALYSIS OF NET ASSETS
Paid-in Capital $ 86,176,459
Undistributed Net Investment Income 1,614,387
Accumulated Net Realized Gain on Investments,
Futures and Foreign Currency Contracts and
Transactions 1,877,364
Net Unrealized Appreciation of Investments,
Futures and Foreign Currency Contracts and
Translations 11,402,230
------------
Net Assets $101,070,440
============
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
12
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend Income (Net of Foreign Withholding Tax
of $127,941 ) $ 1,475,740
Interest Income 89,425
-----------
Investment Income 1,565,165
EXPENSES
Advisory Fee $ 1,099,930
Shareholder Servicing Fee 219,986
Custodian Fees and Expenses 187,607
Transfer Agent Fees 77,372
Professional Fees and Expenses 49,205
Administrative Services Fee 45,603
Amortization of Organization Expense 3,996
Fund Services Fee 1,781
Administrative Fee 800
Trustees' Fees and Expenses 791
Miscellaneous 47,261
-----------
Total Expenses 1,734,332
Less: Reimbursement of Expenses (414,416)
-----------
NET EXPENSES 1,319,916
-----------
NET INVESTMENT INCOME 245,249
NET REALIZED GAIN ON
Investment Transactions 7,555,495
Futures 530,211
Foreign Currency Contracts and Transactions 88,981
-----------
Net Realized Gain 8,174,687
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF
Investment Transactions 15,863,591
Futures (5,539)
Foreign Currency Contracts and Translations 1,374,480
-----------
Net Change in Unrealized Appreciation 17,232,532
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $25,652,468
===========
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
13
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 29, 1998
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------- -------------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 245,249 $ 148,574
Net Realized Gain (Loss) on Investments, Futures
and Foreign Currency Contracts and Transactions 8,174,687 (5,467,543)
Net Change in Unrealized Appreciation
(Depreciation) of Investments, Futures and
Foreign Currency Contracts and Translations 17,232,532 (5,830,302)
--------------- ------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 25,652,468 (11,149,271)
--------------- ------------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Shares of Beneficial Interest Sold 30,583,982 101,633,355
Cost of Shares of Beneficial Interest Redeemed (31,651,984) (13,998,110)
--------------- ------------------
Net Increase (Decrease) from Shareholder
Transactions (1,068,002) 87,635,245
--------------- ------------------
Total Increase in Net Assets 24,584,466 76,485,974
NET ASSETS
Beginning of Period 76,485,974 --
--------------- ------------------
End of Period (including undistributed net
investment income of $1,614,387 and $1,276,161
respectively) $ 101,070,440 $ 76,485,974
=============== ==================
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
14
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a unit outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 29, 1998
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.36 $ 15.00
--------------- ------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.06 0.22
Net Realized and Unrealized Gain (Loss) on
Investments, Futures and Foreign Currency
Contracts and Transactions 4.64 (1.86)
--------------- ------------------
Total from Investment Operations 4.70 (1.64)
--------------- ------------------
NET ASSET VALUE, END OF PERIOD $ 18.06 $ 13.36
=============== ==================
RATIOS AND SUPPLEMENTAL DATA
Total Return 35.18% (10.93)%(a)
Net Assets, End of Period (in thousands) $ 101,070 $ 76,486
Ratio to Average Net Assets
Net Expenses 1.50% 1.50%(b)
Net Investment Income 0.28% 0.43%(b)
Expenses without Reimbursement 1.97% 2.07%(b)
Portfolio Turnover 84% 54%(a)
</TABLE>
- ------------------------
(a) Not Annualized.
(b) Annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
15
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The J.P. Morgan Global 50 Fund (the "fund") is a series of J.P. Morgan Series
Trust, a Massachusetts business trust (the "trust"). The trust, which was
organized on August 15, 1996, is registered under the Investment Company Act of
1940, as amended, as a no-load, diversified, open-end management investment
company. The fund's investment objective is to provide high total return from a
concentrated portfolio of global equity securities. The trustees of the trust
have divided the beneficial interests in the fund into two classes of shares,
Institutional Shares and Select Shares. Currently, the fund only offers Select
Shares. The fund commenced operations on May 29, 1998. The Declaration of Trust
permits the trustees to issue an unlimited number of shares in the fund.
The fund may have elements of risk not typically associated with investments in
the United States due to concentrated investments in a limited number of
countries or regions which may vary throughout the year. Such concentrations may
subject the fund to additional risks resulting from political or economic
conditions in such countries or regions and the possible imposition of adverse
governmental laws or currency exchange restrictions affecting such countries or
regions which could cause the securities and their markets to be less liquid and
prices more volatile than those comparable to the United States.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual amounts could differ from
those estimates. The following is a summary of the significant accounting
policies of the fund:
a) The fund values securities that are listed on an exchange using prices
supplied daily by an independent pricing service that are based on the
last traded price on a national securities exchange or in the absence of
recorded trades, at the readily available mean of the bid and asked prices
on such exchange, if such exchange or market constitutes the broadest and
most representative market for the security. Securities listed on a
foreign exchange are valued at the last trade price or, in the absence of
recorded trades, at the readily available mean of the bid and asked prices
on such exchange available before the time when net assets are valued.
Independent pricing service procedures may also include the use of prices
based on yields or prices of securities of comparable quality, coupon,
maturity and type, indications as to values from dealers, operating data,
and general market conditions. Unlisted securities are valued at the
average of the quoted bid and asked prices in the over-the-counter market
provided by a principle market maker or dealer. If prices are not supplied
by the fund's independent pricing service or principle market maker or
dealer, such securities are priced using fair values in accordance with
procedures adopted by the fund's Trustees. All short-term securities with
a remaining maturity of sixty days or less are valued using by the
amortized cost method.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the domestic market and
may also take place on days on which the domestic market is closed. If
events materially affecting the value of foreign securities occur between
the time when the exchange on which they are traded closes and the time
when the fund's net assets are calculated, such securities will be valued
at fair value in accordance with procedures established by and under the
general supervision of the fund's trustees.
16
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
The fund's custodian takes possession of the collateral pledged for
investments in repurchase agreements on behalf of the fund. It is the
policy of the fund to value the underlying collateral daily on a mark-to-
market basis to determine that the value, including accrued interest, is
at least equal to the repurchase price plus accrued interest. In the event
of default of the obligation to repurchase, the fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
b) The books and records of the fund are maintained in U.S. dollars. The
market value of investment securities, other assets and liabilities and
foreign currency contracts are translated at the prevailing exchange rates
at the end of the period. Purchases, sales, income and expenses are
translated at the exchange rates prevailing on the respective dates of
such transactions. Translation gains and losses resulting from changes in
exchange rates during the reporting period and gains and losses realized
upon settlement of foreign currency transactions are reported in the
Statement of Operations. Although the net assets of the fund are presented
at the exchange rates and market values prevailing at the end of the
period, the fund does not isolate the portion of the results of operations
arising as a result of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of securities
during the period.
c) Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or as of the time that the
relevant ex-dividend date and amount becomes known. Interest income, which
includes the amortization of premiums and discounts, if any, is recorded
on an accrual basis. Amortization is calculated using the scientific
method. For financial and tax reporting purposes, realized gains and
losses are determined on the basis of specific lot identification.
d) Distributions to shareholders of net investment income and net realized
capital gains, if any, are declared and paid annually.
e) The fund incurred organization expenses in the amount of $20,000. Morgan
Guaranty Trust Company of New York ("Morgan"), a wholly owned subsidiary
of J.P. Morgan & Co. Incorporated ("J.P. Morgan") has paid the
organization expenses of the fund. The fund has agreed to reimburse Morgan
for these costs which are being deferred and amortized on a straight-line
basis over a period not to exceed five years beginning with the
commencement of operations of the fund.
f) The fund may enter into forward and spot foreign currency contracts to
protect securities and related receivables and payables against
fluctuations in future foreign currency rates and to enhance returns. A
forward contract is an agreement to buy or sell currencies of different
countries on a specified future date at a specified rate. Risks associated
with such contracts include the movement in the value of the foreign
currency relative to the U.S. dollar and the ability of the counterparty
to perform.
The market value of the contract will fluctuate with changes in currency
exchange rates. Contracts are valued daily at the current foreign exchange
rates, and the change in the market value is recorded by the fund as
unrealized appreciation or depreciation of forward foreign currency
contract translations.
17
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
g) A futures contract is an agreement to purchase/sell a specified quantity
of an underlying instrument at a specified future date or to make/receive
a cash payment based on the value of a securities index. The price at
which the purchase and sale will take place is fixed when the fund enters
into the contract. Upon entering into such a contract, the fund is
required to pledge to the broker an amount of cash and/ or liquid
securities equal to the minimum "initial margin" requirements of the
exchange. Pursuant to the contract, the fund agrees to receive from, or
pay to, the broker an amount of cash equal to the daily fluctuation in the
value of the contract. Such receipts or payments are known as "variation
margin" and are recorded by the fund as unrealized gains or losses. When
the contract is closed, the fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened
and the value at the time when it was closed. The fund invests in futures
contracts for the purpose of hedging its existing fund securities, or
securities the fund intends to purchase, against fluctuations in value
caused by changes in prevailing market interest rates or securities
movements. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates
and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts.
h) The fund intends to comply with the provisions of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies and
to distribute substantially all of its income, including net realized
capital gains, if any, within the prescribed time periods. Accordingly, no
provision for federal income or excise tax is necessary.
i) The fund accounts for and reports distributions to shareholders in
accordance with Statement of Position 93-2 "Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies." The effect of applying
this statement was to increase Undistributed Net Investment Income by
$92,977, decrease Accumulated Net Realized Gain on Investments, Futures
and Foreign Currency Contracts and Transactions by $88,981, and decrease
Paid-in Capital by $3,996. The adjustments are primarily attributable to
foreign currency reclasses. Net investment income, net realized gains and
net assets were not affected by this change.
2. TRANSACTIONS WITH AFFILIATES
a) The fund has an Investment Advisory Agreement with J.P. Morgan Investment
Management, Inc. ("JPMIM"), an affiliate of Morgan and wholly-owned
subsidiary of J.P. Morgan. Under the terms of the agreement, the fund pays
JPMIM at an annual rate of 1.25% of the fund's average daily net assets.
For the fiscal year ended October 31, 1999, such fees amounted to
$1,099,930.
b) The trust, on behalf of the fund, has retained Funds Distributor, Inc.
("FDI"), a registered broker-dealer, to serve as the co-administrator and
distributor for the fund. Under a Co-Administration Agreement between FDI
and the trust on behalf of the fund, FDI provides administrative services
necessary for the operations of the fund, furnishes office space and
facilities required for conducting the business of the fund and pays the
compensation of the fund's officers affiliated with FDI. 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
18
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
assets to the aggregate net assets of the trust and certain other
investment companies subject to similar agreements with FDI. For the
fiscal year ended October 31, 1999, the fee for these services amounted to
$800.
c) The trust, on behalf of the fund, has an Administrative Services Agreement
(the "Services Agreement") with Morgan under which Morgan is responsible
for overseeing certain aspects of the administration and operation of the
fund. Under the Services Agreement, the fund has agreed to pay Morgan a
fee equal to its allocable share of an annual complex-wide charge. This
charge is calculated based on the aggregate average daily net assets of
the trust and certain other registered investment companies for which
JPMIM acts as investment advisor in accordance with the following annual
schedule: 0.09% on 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 net assets of the trust and certain other
investment companies for which Morgan provides administrative services.
For the fiscal year ended October 31, 1999, the fee for these services
amounted to $45,603.
In addition, Morgan has agreed to reimburse the fund to the extent
necessary to maintain the total operating expenses of the fund at no more
than 1.50% of the average daily net assets of the fund until further
notification. For the fiscal year ended October 31, 1999, Morgan has
agreed to reimburse the fund $414,416 for expenses under this agreement.
d) The trust, on behalf of the fund, has a Shareholder Servicing Agreement
with Morgan to provide account administration and personal account
maintenance service to fund shareholders. The agreement provides for the
fund to pay Morgan a fee for these services which is computed daily and
paid monthly at an annual rate of 0.25% of the average daily net assets of
the fund. For the fiscal year ended October 31, 1999, the fee for these
services amounted to $219,986.
Morgan, Charles Schwab & Co. ("Schwab") and the trust are parties to
separate services and operating agreements (the "Schwab Agreements")
whereby Schwab makes fund shares available to customers of investment
advisors and other financial intermediaries who are Schwab's clients. The
fund is not responsible for payments to Schwab under the Schwab
Agreements; however, in the event the services agreement with Schwab is
terminated for reasons other than a breach by Schwab and the relationship
between the trust and Morgan is terminated, the fund would be responsible
for the ongoing payments to Schwab with respect to pre-termination shares.
e) The trust, on behalf of the fund, has a Fund Services Agreement with
Pierpont Group, Inc. ("Group") to assist the trustees in exercising their
overall supervisory responsibilities for the trust's affairs. The trustees
of the trust represent all the existing shareholders of Group. The fund's
allocated portion of Group's costs in performing its services amounted to
$1,781 for the fiscal year ended October 31, 1999.
f) An aggregate annual fee of $75,000 is paid to each trustee for serving as
a trustee of the trust, the J.P. Morgan Institutional Funds and
J.P. Morgan Series Trust. The Trustees' Fees and Expenses shown in the
financial statements represents the fund's allocated portion of the total
fees and expenses. The trust's Chairman and Chief Executive Officer also
serves as Chairman of Group and receives compensation
19
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
and employee benefits from Group in his role as Group's Chairman. The
allocated portion of such compensation and benefits included in the Fund
Services Fee shown in the financial statements was $300.
3. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the trustees to issue an unlimited number of
full and fractional shares of beneficial interest of one or more series.
Transactions in shares of beneficial interest of the fund were as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 29, 1999
(COMMENCEMENT OF
FOR THE YEAR ENDED OPERATIONS) THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998
------------------ -----------------------
<S> <C> <C>
Shares sold...................................... 1,838,738 6,808,830
Shares redeemed.................................. (1,968,762) (1,082,675)
----------------- ----------------------
Net Increase..................................... (130,024) 5,726,155
================= ======================
</TABLE>
From time to time, the fund may have a concentration of several shareholders
holding a significant percentage of shares outstanding. Investment activities of
these shareholders could have a material impact on the fund.
4. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the fiscal year
ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
- --------- -----------
<S> <C>
$71,404,009 $72,334,144
</TABLE>
At October 31, 1999, the fund had open forward foreign currency contracts as
follows:
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
CONTRACTUAL VALUE AT APPRECIATION/
PURCHASE CONTRACTS VALUE 10/31/99 (DEPRECIATION)
- ------------------ ----------- ----------- --------------
<S> <C> <C> <C>
Canadian Dollar 2,742,996, expiring 12/15/99..... $ 1,862,753 $ 1,866,290 $ 3,537
British Pound 3,597,629, expiring 12/15/99....... 5,776,533 5,913,642 137,109
Danish Krone 3,717,000, expiring 12/15/99........ 521,465 527,715 6,250
Euro 9,381,167, expiring 12/15/99................ 10,092,025 9,902,358 (189,667)
Euro 267,142 for JPY 30,000,000,
expiring 12/15/99............................... 289,926 281,983 (7,943)
Hong Kong Dollar 8,726,594, expiring 12/15/99.... 1,122,624 1,122,526 (98)
Hong Kong Dollar 756,000 for GBP 59,934,
expiring 12/15/99............................... 98,517 97,246 (1,271)
</TABLE>
20
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
CONTRACTUAL VALUE AT APPRECIATION/
PURCHASE CONTRACTS VALUE 10/31/99 (DEPRECIATION)
- ------------------ ----------- ----------- --------------
<S> <C> <C> <C>
Japanese Yen 205,023,290, expiring 12/15/99...... $ 1,950,000 $ 1,981,388 $ 31,388
Norwegian Krone 1,768,457, expiring 12/15/99..... 223,177 225,255 2,078
Swedish Krona 11,547,172, expiring 12/15/99...... 1,395,766 1,408,581 12,815
Swiss Franc 1,317,276, expiring 12/15/99......... 867,000 868,934 1,934
Swiss Franc 1,501,691 for GBP 605,192,
expiring 12/15/99............................... 994,791 990,581 (4,210)
</TABLE>
<TABLE>
<CAPTION>
SETTLEMENT
SALES CONTRACTS VALUE
- --------------- -----------
<S> <C> <C> <C>
Australian Dollar 2,374,241,
expiring 12/15/99............................... 1,548,777 1,515,719 33,058
Euro 15,504,506, expiring 12/15/99............... 16,176,372 16,365,892 (189,520)
Hong Kong Dollar 23,270,783,
expiring 12/15/99............................... 2,994,182 2,993,386 796
Japanese Yen 1,023,977,108, expiring 12/15/99.... 9,773,577 9,895,930 (122,353)
Singapore Dollar 3,258,000,
expiring 12/15/99............................... 1,969,175 1,966,964 2,211
South African Rand 6,087,378,
expiring 12/15/99............................... 983,993 984,018 (25)
Swiss Franc 4,162,098, expiring 12/15/99......... 2,719,436 2,745,501 (26,065)
-------------
NET UNREALIZED DEPRECIATION ON FORWARD FOREIGN
CURRENCY CONTRACTS.............................. $ (309,976)
=============
</TABLE>
At October 31, 1999, the fund had an open futures contract as follows:
<TABLE>
<CAPTION>
CURRENT MARKET
NET UNREALIZED VALUE
CONTRACT LONG APPRECIATION OF CONTRACT
------------- -------------- --------------
<S> <C> <C> <C>
S&P 500 Index, expiring December 1999............ 1 $ 16,794 $ 344,050
============ ============= =============
</TABLE>
5. CREDIT AGREEMENT
The trust, on behalf of the fund, together with other affiliated investment
companies (the "funds"), entered into a revolving line of credit agreement (the
"Agreement") on May 27, 1998, with unaffiliated lenders. The maximum borrowing
under the Agreement is $150,000,000. The Agreement expired on May 26, 1999,
however, the fund as party to the Agreement has renewed the Agreement and will
continue its participation therein for an additional 364 days until May 23,
2000. The purpose of the Agreement is to provide another
21
<PAGE>
J.P. MORGAN GLOBAL 50 FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
alternative for settling large fund shareholder redemptions. Interest on any
such borrowings outstanding will approximate market rates. The funds pay a
commitment fee at an annual rate of 0.085% (0.065% prior to May 26, 1999) on the
unused portion of the committed amount. This is allocated to the funds in
accordance with procedures established by their respective trustees. There were
no outstanding borrowings pursuant to the Agreement at October 31, 1999.
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
J.P. Morgan Global 50 Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of J.P. Morgan Global 50 Fund (one of
the funds comprising J.P. Morgan Series Trust, hereafter referred to as the
"fund") at October 31, 1999 and the results of its operations for the year then
ended, the changes in its net assets and the financial highlights for the year
then ended and for the period May 29, 1998 (commencement of operations) to
October 31, 1998, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
October 31, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
December 17 , 1999
23
<PAGE>
J.P. MORGAN FUNDS
FEDERAL MONEY MARKET FUND
PRIME MONEY MARKET FUND
TAX EXEMPT MONEY MARKET FUND
TAX AWARE ENHANCED INCOME FUND: SELECT SHARES
SHORT TERM BOND FUND
BOND FUND
EMERGING MARKETS DEBT FUND
GLOBAL STRATEGIC INCOME FUND
TAX EXEMPT BOND FUND
CALIFORNIA BOND FUND: SELECT SHARES
NEW YORK TAX EXEMPT BOND FUND
DIVERSIFIED FUND
DISCIPLINED EQUITY FUND
TAX AWARE U.S. EQUITY FUND: SELECT SHARES
U.S. EQUITY FUND
U.S. SMALL COMPANY FUND
U.S. SMALL COMPANY OPPORTUNITIES FUND
EMERGING MARKETS EQUITY FUND
EUROPEAN EQUITY FUND
GLOBAL 50 FUND: SELECT SHARES
INTERNATIONAL EQUITY FUND
INTERNATIONAL OPPORTUNITIES FUND
FOR MORE INFORMATION ON THE J.P. MORGAN FUNDS, CALL J.P. MORGAN FUNDS SERVICES
AT (800) 521-5411.
J.P. MORGAN
GLOBAL 50 FUND
ANNUAL REPORT
OCTOBER 31, 1999
