<PAGE>
LETTER TO THE SHAREHOLDERS OF THE JPM INSTITUTIONAL MONEY MARKET FUND
July 10, 1995
Dear Shareholder:
During the semi-annual period, the Fund's maturity management, security
selection, and focus on high quality issues helped it outperform
IBC/Donoghue's Taxable Money Fund Average. For the six months ended May 31,
1995, the Fund had a total return of 2.92%, outperforming IBC/Donoghue's
average return of 2.72%. In addition, as seen in the table on page 4, the
Fund has consistently outperformed this average for the one- , three- ,
five- , and ten-year periods.
The Fund's net asset value remained constant at $1.00 per share. The Fund's
net assets were approximately $580.2 million on May 31, 1995, compared with
$584.9 million at the end of November 1994. The net assets of The Money
Market Portfolio, in which the Fund invests, stood at almost $3.0 billion at
May 31, 1995.
MARKET REVIEW
The Federal Reserve increased short-term interest rates throughout much of
1994 in order to slow the pace of economic expansion to levels that could be
sustained without increasing inflation. As increasing numbers of investors
came to believe that these actions would accomplish this goal, the money
market portion of the yield curve flattened to 125 basis points by the end of
January.
January's retail sales report for the month of December, coupled with more
benign inflation numbers, suggested that the Federal Reserve would tighten
monetary policy at its February 1, 1995 meeting. At that meeting, the central
bank increased both the Fed funds and discount rates by 0.50% (to 6.00% and
5.25%, respectively). The market generally expected these increases and, as a
result, the money market curve underwent additional flattening. Also of note
in February were government reports that seemed to indicate an economic
slowdown, and comments from Federal Reserve Chairman Alan Greenspan which
hinted that the next move might be to ease monetary policy.
The money market yield curve experienced further flattening during the last
two months of the period, as more and more evidence suggested a slowing
economy. One such key indicator was the growth in inventories shown on the
April Gross Domestic Product (GDP) report, which caused us to reduce our
expectation to below-trend growth for the second quarter. When the Federal
Reserve made no policy changes at the Federal Open Market Committee meeting
in May, significant price fluctuations motivated borrowers to protect
themselves with callable one-year certificates of deposit.
TABLE OF CONTENTS
LETTER TO THE SHAREHOLDERS.............1 FUND PERFORMANCE............4
FUND FACTS AND HIGHLIGHTS..............3 FINANCIAL STATEMENTS........6
1
<PAGE>
PORTFOLIO REVIEW
Morgan draws upon proprietary research to control the Portfolio's maturity
structure and make security selection decisions. Our portfolio managers
invest in a range of fixed income instruments to increase the potential for
higher returns.
Given our revised estimate for second-quarter growth of less than 1% and our
increased expectation that the Federal Reserve would ease its rates, we
lengthened the Portfolio's target life of 30 days to a range of 45 to 55
days. By the end of May, the Portfolio had an average life of 56 days, versus
49 days for the Donoghue average.
The Portfolio benefited from the flattening in the yield curve by maintaining
a barbell strategy. A barbell strategy involves concentrating holdings at
either end of the money market yield curve to achieve a specific target
average life. We avoided callable certificates of deposit because we found
them to be costly, opting instead for one-year U.S. government agency paper,
which offered more relative value.
INVESTMENT OUTLOOK
Going forward, we expect that a decline in interest rates in the weeks ahead
will result in large redemptions in callable certificates of deposits by
early September. We are avoiding the purchase of securities maturing then to
avoid reinvestment risk.
Weak economic data during the second quarter of 1995 seemed to be influenced
by the increase in inventories, but much of this surplus appears to have been
absorbed by now. A 20% increase in housing starts at the end of June
suggests that the 1.50% drop in interest rates, together with a weak dollar,
should maintain positive momentum in the economy over the next few quarters.
Given the shape of the yield curve and our outlook for growth in the coming
quarters, we plan to move to a target maturity of 55 to 60 days.
As always, we welcome your comments or questions. Please call J.P. Morgan
Funds Services toll free at (800) 766-7722.
Sincerely,
/s/ Evelyn E. Guernsey
Evelyn E. Guernsey
J.P. Morgan Funds Services
2
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
The JPM Institutional Money Market Fund seeks to provide current income,
maintain a high level of liquidity, and preserve capital. It is designed for
investors who seek to preserve capital and earn current income from a
portfolio of high-quality money market instruments.
----------------------------------------
COMMENCEMENT OF OPERATIONS
7/12/93
----------------------------------------
NET ASSETS AS OF 5/31/95
$580,220,937
----------------------------------------
DIVIDEND PAYABLE DATES
Monthly
----------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/18/95
EXPENSE RATIO
The Fund's annualized expense ratio of 0.20% 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 MAY 31, 1995
PORTFOLIO ALLOCATION
(PERCENTAGE OF TOTAL INVESTMENTS)
Pie chart depicting the allocation of the Fund's investment securities held at
May 31, 1995 by investment categories. The pie is broken in pieces representing
investment categories in the following percentages:
COMMERCIAL PAPER 27.8%
CERTIFICATES OF DEPOSIT 19.7%
U.S. GOVERNMENT AGENCIES 17.8%
REPURCHASE AGREEMENTS 14.3%
FLOATING RATE NOTES 8.5%
TIME DEPOSITS (FOREIGN) 5.3%
CORPORATE BONDS 2.5%
OTHER 4.1%
AVERAGE 7-DAY YIELD
5.93%
AVERAGE MATURITY
56 days
3
<PAGE>
FUND PERFORMANCE
EXAMINING PERFORMANCE
One 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 you
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 in a fund's value over various time periods, typically 1, 5, or 10
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.
<TABLE>
<CAPTION>
PERFORMANCE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
---------------- ------------------------------------
THREE SIX ONE THREE FIVE TEN
AS OF MAY 31, 1995 MONTHS MONTHS YEAR YEARS* YEARS* YEARS*
------------------------------------------------------------------ ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The JPM Institutional Money Market Fund 1.51% 2.92% 5.28% 3.82% 4.77% 6.11%
IBC/Donoghue's Taxable Money Fund Avg. 1.39% 2.72% 4.83% 3.52% 4.46% 5.81%
AS OF MARCH 31, 1995
------------------------------------------------------------------ ------------------------------------
The JPM Institutional Money Market Fund 1.43% 2.75% 4.86% 3.69% 4.83% 6.15%
IBC/Donoghue's Taxable Money Fund Avg. 1.35% 2.54% 4.43% 3.40% 4.54% 5.85%
</TABLE>
*CONSISTENT WITH APPLICABLE REGULATORY GUIDANCE, PERFORMANCE FOR THE PERIOD
PRIOR TO THE JPM INSTITUTIONAL MONEY MARKET FUND'S INCEPTION REFLECTS THE
PERFORMANCE OF THE PIERPONT MONEY MARKET FUND, THE PREDECESSOR ENTITY TO THE
MONEY MARKET PORTFOLIO, WHICH HAD A SIMILAR INVESTMENT OBJECTIVE AND
RESTRICTIONS AS THE PORTFOLIO. THE PERFORMANCE FOR SUCH PERIOD REFLECTS
DEDUCTION OF THE EXPENSES OF THE PIERPONT MONEY MARKET FUND, WHICH WERE HIGHER
THAN THE EXPENSES FOR THE JPM INSTITUTIONAL MONEY MARKET FUND, AFTER
REIMBURSEMENT.
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. ALL FUND RETURNS ARE NET
OF FEES AND ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND REFLECT REIMBURSEMENT
OF CERTAIN FUND AND PORTFOLIO EXPENSES AS DESCRIBED IN THE PROSPECTUS.
IBC/DONOGHUE'S TAXABLE MONEY FUND AVERAGE IS AN AVERAGE OF ALL TAXABLE MAJOR
MONEY MARKET FUND RETURNS. THIS COMPARATIVE INFORMATION IS AVAILABLE TO THE
PUBLIC FROM THE IBC/DONOGHUE ORGANIZATION, INC. NO REPRESENTATION IS MADE THAT
THE INFORMATION GATHERED FROM THIS SOURCE IS ACCURATE OR COMPLETE. THE FUND
INVESTS ALL OF ITS INVESTABLE ASSETS IN THE MONEY MARKET PORTFOLIO, A SEPARATELY
REGISTERED INVESTMENT COMPANY WHICH IS NOT AVAILABLE TO THE PUBLIC BUT ONLY TO
OTHER COLLECTIVE INVESTMENT VEHICLES SUCH AS THE FUND.
4
<PAGE>
SIGNATURE BROKER-DEALER SERVICES, INC. IS THE DISTRIBUTOR OF THE JPM
INSTITUTIONAL MONEY MARKET FUND (THE "FUND").
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("MORGAN") SERVES AS PORTFOLIO
INVESTMENT ADVISOR AND MAKES THE FUND AVAILABLE SOLELY IN ITS CAPACITY AS
SHAREHOLDER SERVICING AGENT FOR CUSTOMERS. INVESTMENTS IN THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, MORGAN OR ANY OTHER
BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL
AGENCY. ALTHOUGH THE FUND SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE, THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO CONTINUE TO DO SO.
Performance data quoted herein represent past performance. Please remember that
past performance is not a guarantee of future performance. Fund returns are net
of fees. All returns assume the reinvestment of income and reflect the
reimbursement of certain Fund and Portfolio expenses as described in the
Prospectus.
MORE COMPLETE INFORMATION ABOUT THE FUND, INCLUDING MANAGEMENT FEES AND OTHER
EXPENSES, IS PROVIDED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING. YOU MAY OBTAIN ADDITIONAL COPIES OF THE PROSPECTUS
BY CALLING J.P. MORGAN FUNDS SERVICES AT (800) 766-7722.
5
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in The Money Market Portfolio ("Portfolio"), at value $583,081,720
Receivable for Expense Reimbursements (Note 2b) 271,627
Deferred Organization Expense (Note 1d) 31,625
Prepaid Expenses 1,267
------------
Total Assets 583,386,239
------------
LIABILITIES
Dividend Payable 3,036,008
Shareholder Servicing Fee Payable (Note 2c) 64,287
Administration Fee Payable (Note 2a) 13,398
Fund Services Fee Payable (Note 2d) 2,609
Accrued Expenses 49,000
------------
Total Liabilities 3,165,302
------------
NET ASSETS
Applicable to 580,060,842 Shares of Beneficial Interest
Outstanding
(unlimited authorized shares, par value $0.001) $580,220,937
------------
------------
Net Asset Value, Offering and Redemption Price Per Share $1.00
------------
------------
ANALYSIS OF NET ASSETS
Paid-In Capital $580,060,842
Accumulated Undistributed Net Realized Gain on Investment 160,095
------------
Net Assets $580,220,937
------------
------------
</TABLE>
See Accompanying Notes.
6
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO (NOTE 1b)
Allocated Interest Income $ 16,305,573
Allocated Portfolio Expenses (528,837)
------------
Net Investment Income Allocated from Portfolio 15,776,736
FUND EXPENSES
Shareholder Servicing (Note 2c) $ 298,955
Administration Fee (Note 2a) 74,041
Fund Services Fee (Note 2d) 27,243
Registration Fees 13,301
Transfer Agent Fee 12,016
Printing 9,427
Trustees' Fees and Expenses (Note 2e) 6,393
Professional Fees 6,048
Amortization of Organization Expenses (Note 1d) 5,200
Miscellaneous 15,728
---------
Total Fund Expenses 468,352
Less: Reimbursements of Expenses (Note 2b) (453,679)
---------
NET FUND EXPENSES 14,673
------------
NET INVESTMENT INCOME 15,762,063
NET REALIZED GAIN ON INVESTMENTS ALLOCATED FROM PORTFOLIO 162,712
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,924,775
------------
------------
</TABLE>
See Accompanying Notes.
7
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE FISCAL
MONTHS ENDED MAY YEAR ENDED
31, 1995 NOVEMBER 30,
(UNAUDITED) 1994
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 15,762,063 $ 8,053,551
Net Realized Gain (Loss) on Investments Allocated from Portfolio 162,712 (2,617)
---------------- ---------------
Net Increase in Net Assets Resulting from Operations 15,924,775 8,050,934
---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (15,762,063) (8,053,551)
---------------- ---------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (AT $1.00 PER
SHARE)
Proceeds from Shares of Beneficial Interest Sold 1,257,976,563 1,235,877,598
Reinvestment of Dividends 14,137,282 5,179,159
Cost of Shares of Beneficial Interest Redeemed (1,276,922,784) (683,375,165)
---------------- ---------------
Net Increase (Decrease) from Transactions in Shares of Beneficial
Interest (4,808,939) 557,681,592
---------------- ---------------
Total Increase (Decrease) in Net Assets (4,646,227) 557,678,975
NET ASSETS
Beginning of Period 584,867,164 27,188,189
---------------- ---------------
End of Period $ 580,220,937 $ 584,867,164
---------------- ---------------
---------------- ---------------
</TABLE>
See Accompanying Notes.
8
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 12, 1993
MONTHS ENDED MAY FOR THE FISCAL (COMMENCEMENT
31, 1995 YEAR ENDED OF OPERATIONS) TO
(UNAUDITED) NOVEMBER 30, 1994 NOVEMBER 30, 1993
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
----------------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.0289 0.0385 0.0120
Net Realized Gain (Loss) Allocated from
Portfolio 0.0000(a) (0.0000) (a) 0.0000(a)
----------------- ----------------- -----------------
0.0289 0.0385 0.0120
----------------- ----------------- -----------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (0.0289) (0.0385) (0.0120)
Net Realized Gain -- -- (0.0000) (a)
----------------- ----------------- -----------------
Total Distributions to Shareholders (0.0289) (0.0385) (0.0120)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Total Return 2.92%(b) 3.92% 1.21%(b)
----------------- ----------------- -----------------
----------------- ----------------- -----------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets at end of Period (in thousands) $ 580,221 $ 584,867 $ 27,188
Ratios to Average Net Assets
Expenses 0.20%(c) 0.21% 0.30%(c)
Net Investment Income 5.80%(c) 4.42% 2.88%(c)
Decrease Reflected in Expense ratio due
to Expense Reimbursements 0.17%(c) 0.31% 1.10%(c)
<FN>
-------------------
(a) Less than $0.0001
(b) Not Annualized
(c) Annualized
</TABLE>
See Accompanying Notes.
9
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The JPM Institutional Money Market Fund (the "Fund") is a separate series of The
JPM Institutional Funds, a Massachusetts business trust (the "Trust"). The Trust
is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Fund commenced
operations on July 12, 1993.
The Fund invests all of its investable assets in The Money Market Portfolio (the
"Portfolio"), a diversified open-end management investment company having the
same investment objectives as the Fund. The value of such investment reflects
the Fund's proportionate interest in the net assets of the Portfolio (20% at May
31, 1995). The performance of the Fund is directly affected by the performance
of the Portfolio. The financial statements of the Portfolio, including the
schedule of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements.
The following is a summary of the significant accounting policies of the Fund:
a)Valuation of securities by the Portfolio is discussed in Note 1 of the
Portfolio's Notes to Financial Statements which are included elsewhere in
this report.
b)The Fund records its share of net investment income, realized gain and
loss and adjusts its investment in the Portfolio each day. All the net
investment income and realized gain and loss of the Portfolio is allocated
pro rata among the Fund and other investors in the Portfolio at the time
of such determination.
c)All the Fund's net investment income is declared as dividends daily and
paid monthly. Distributions to shareholders of net realized capital gain,
if any, are declared and paid annually.
d)The Fund incurred organizational expenses in the amount of $51,045. These
costs were deferred and are being amortized by the Fund on a straight-line
basis over a five-year period from the commencement of operations.
e)Each series of the Trust is treated as a separate entity for federal
income tax purposes. 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.
f)Expenses incurred by the Trust with respect to any two or more funds in
the Trust are allocated in proportion to the net assets of each fund in
the Trust, except where allocations of direct expenses to each fund can
otherwise be made fairly. Expenses directly attributable to a fund are
charged to that fund.
g)For United States Federal income tax purposes the Fund had a capital loss
carryforward at November 30, 1994 of $2,617 which will expire in the year
2002. No capital gains distributions is expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
10
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
h)The Fund adopted Statement of Position 93-2 Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. Accordingly permanent book
and tax differences related to shareholder distributions are reclassified
to paid-in capital.
2. TRANSACTIONS WITH AFFILIATES
a)The Trust retains Signature Broker-Dealer Services, Inc. ("Signature") to
serve as Administrator and Distributor. Signature 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 Signature. The
agreement provides for a fee to be paid to Signature at an annual rate
determined by the following schedule: 0.04% of the first $1 billion of the
aggregate average daily net assets of the Trust, as well as the net assets
of two other affiliated fund families for which Signature acts as
administrator, 0.032% of the next $2 billion of such net assets, 0.024% of
the next $2 billion of such net assets, and 0.016% of such net assets in
excess of $5 billion. The daily equivalent of the fee rate is applied to
the net assets of the Fund. For the six months ended May 31, 1995,
Signature's fee amounted to $74,041.
b)The Trust, on behalf of the Fund, has a Financial and Fund Accounting
Services Agreement ("Services Agreement") with Morgan Guaranty Trust
Company of New York ("Morgan") under which Morgan receives a fee, based on
the percentage described below, for overseeing certain aspects of the
administration and operation of the Fund. The Services Agreement is also
designed to provide an expense limit for certain expenses of the Fund. If
total expenses of the Fund, excluding the shareholder servicing fee, the
Fund Services fee and amortization of organization expenses, exceed the
expense limit of 0.05% of the Fund's average daily net assets, Morgan will
reimburse the Fund for the excess expense amount and receive no fee.
Should such expenses be less than the expense limit, Morgan's fee would be
limited to the difference between such expenses and the fee calculated
under the Services Agreement. For the six months ended May 31, 1995,
Morgan agreed to reimburse the Fund $1,066 for excess expenses. In
addition, to the expenses that Morgan assumes under the Services
Agreement, Morgan has agreed to reimburse the Fund to the extent necessary
to maintain the total operating expenses of the Fund, including the
expenses allocated to the Fund from the Portfolio, at no more than 0.20%
of the average daily net assets of the Fund through November 30, 1995. For
the six months ended May 31, 1995, Morgan has agreed to reimburse the Fund
an additional $452,613 for excess expenses.
c)The Trust, on behalf of the Fund, has a Shareholder Servicing Agreement
with Morgan. The Agreement provides for the Fund to pay Morgan a fee for
these services which is computed daily and may be paid monthly at an
annual rate of 0.11% of the average daily net assets of the Fund. For the
six months ended May 31, 1995, the fee for these services amounted to
$298,955.
d)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 $27,243
for the six months ended May 31, 1995.
11
<PAGE>
THE JPM INSTITUTIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of the Pierpont Funds, The JPM Institutional Funds, their
corresponding Portfolios and The Series Portfolio. The Trustees' Fees and
Expenses shown in the financial statements represent the Fund's allocated
portion of the total fees and expenses. Prior to April 1, 1995, the
aggregate annual Trustee Fee was $55,000. The Trustee who serves as
Chairman and Chief Executive Officer of these Funds and Portfolios also
serves as Chairman of Group and received compensation 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 $3,200.
12
<PAGE>
The Money Market Portfolio
Semi-Annual Report May 31, 1995
(unaudited)
(The following pages should be read in conjunction
with The JPM Institutional Money Market Fund
Semi-Annual Financial Statements)
13
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
----------- ---------------------------------------- ------------------ ------------ ---------------
<C> <S> <C> <C> <C>
ASSET-BACKED SECURITY (1.0%)
$ 28,692 Bank One Auto Trust..................... 05/15/96 6.362% $ 28,691,656
---------------
CERTIFICATES OF DEPOSIT -- DOMESTIC (0.8%)
25,000 Wachovia Bank & Trust Co., N.A. ........ 02/09/96 7.070 25,003,275
---------------
CERTIFICATES OF DEPOSIT -- FOREIGN (16.1%)
45,600 ABN -- AMRO Bank N.V. .................. 08/04/95 6.260 45,603,885
49,000 Bank of Montreal........................ 06/09/95 6.060 49,000,042
45,000 Bank of New York........................ 06/30/95 6.130 45,000,000
15,000 Banque National De Paris................ 07/12/95 6.120 15,000,000
20,000 Bayerische Landesbank................... 08/04/95 6.070 20,000,350
20,000 Canadian Imperial Bank of Commerce...... 06/12/95 6.005 19,999,988
10,000 Credit Suisse........................... 06/26/95 5.530 10,000,066
32,000 Dai ichi Kangyo Bank.................... 06/21/95 6.030 32,000,353
40,000 Fuji Bank Ltd. ......................... 08/02/95 6.120 40,000,000
21,000 Industrial Bank of Japan................ 06/28/95 6.260 21,000,726
8,000 Rabobank Nederland, N.V. ............... 09/05/95 5.850 7,994,784
50,000 Sanwa Bank Ltd. ........................ 06/12/95 - 6.020 -
09/29/95 6.430 50,019,908
60,000 Societe Generale........................ 08/01/95 - 6.060 -
04/12/96 6.600 60,025,091
64,000 Sumitomo Bank Ltd. ..................... 06/07/95 - 6.000 -
06/15/95 6.060 64,000,000
---------------
TOTAL CERTIFICATES OF DEPOSIT --
FOREIGN................................ 479,645,193
---------------
COMMERCIAL PAPER (17.2%)
15,000 American Express Credit Corp. .......... 07/03/95 5.990 14,920,133
30,000 AT&T Corp............................... 10/30/95 5.980 29,247,517
22,800 Ameritech Corp. ........................ 07/26/95 5.990 22,591,348
35,000 Bank of Montreal........................ 06/19/95 5.960 34,895,700
34,500 Bankers Trust Corp. .................... 11/06/95 5.940 33,600,585
50,000 C.I.T. Group Holdings Inc. ............. 06/28/95 5.950 49,776,875
21,215 Campbell Soup Co. ...................... 02/01/96 5.900 20,363,159
17,493 Dow Chemical Corp. ..................... 06/01/95 6.125 17,493,000
100,000 Exxon Asset Management.................. 06/02/95 -
06/05/95 5.930 99,958,819
111,000 Ford Motor Corp. ....................... 06/01/95 - 5.940 -
06/08/95 5.970 110,959,507
20,000 Lilly, Eli & Co. ....................... 06/01/95 5.930 20,000,000
50,481 Monsanto Co. ........................... 06/16/95 -
06/19/95 6.070 50,335,621
5,000 Southern California Edison Co. ......... 08/01/95 6.000 4,949,167
3,350 Southwestern Bell Capital Corp. ........ 07/10/95 6.045 3,328,062
---------------
TOTAL COMMERCIAL PAPER.................. 512,419,493
---------------
</TABLE>
See Accompanying Notes.
14
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
----------- ---------------------------------------- ------------------ ------------ ---------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER -- FOREIGN (10.6%)
$ 82,232 Abbey National, North America........... 06/05/95 - 5.990 -%
09/06/95 6.130 $ 81,571,107
50,000 Canadian Imperial Holdings.............. 06/26/95 5.950 49,793,403
74,130 Commonwealth Bank of Australia.......... 06/02/95 - 5.980 -
09/27/95 6.170 73,114,797
25,000 Deutsche Bank........................... 07/12/95 6.090 24,826,604
86,500 UBS Finance (Delaware), Inc. ........... 06/01/95 6.150 86,500,000
---------------
TOTAL COMMERCIAL PAPER -- FOREIGN....... 315,805,911
---------------
CORPORATE BONDS (2.6%)
15,000 Abbey National Treasury Services PLC.... 12/20/95 7.350 14,987,002
14,000 First Bank N.A. ........................ 07/11/95 6.030 14,000,000
32,000 Ford Motor Credit Co. .................. 11/12/95 6.125 31,812,538
15,000 Wachovia Bank & Trust Co., N.A. ........ 08/07/95 4.300 14,936,608
---------------
TOTAL CORPORATE BONDS................... 75,736,148
---------------
EURO DOLLAR CERTIFICATES OF DEPOSIT (2.8%)
23,000 Commerzbank U.S. Finance Inc. .......... 08/23/95 6.385 22,999,500
50,000 Deutsche Bank........................... 08/08/95 6.370 50,003,358
10,000 Republic Bank of New York............... 11/30/95 7.250 10,000,476
---------------
TOTAL EURO DOLLAR CERTIFICATES OF
DEPOSIT................................ 83,003,334
---------------
FLOATING RATE NOTES (8.5%) (a)
10,000 Bank One Texas, (resets daily to Federal
Funds rate + 15 basis points).......... 06/02/95 6.220 10,000,000
50,000 Bankers Trust New York Corp. (resets
daily to Federal Funds Rate + 18 basis
points)................................ 06/20/95 6.250 49,998,756
34,000 Boatmans First National Bank, (resets
daily to Federal Funds Rate + 17 basis
points)................................ 06/16/95 6.240 33,998,997
50,000 Federal National Mortgage Association
(resets daily to Federal Funds Rate + 5
basis points).......................... 10/16/95 6.020 49,996,267
25,000 Federal National Mortgage Association
(resets daily to Federal Funds Rate + 5
basis points).......................... 02/09/96 6.020 24,994,801
50,000 General Electric Capital Corp. (resets
monthly to one month LIBOR Rate minus
3.125 basis points).................... 10/27/95 6.031 50,000,000
35,000 PNC Bank Pittsburgh (resets Tuesdays, to
Federal Funds Weekly Effective Rate +
10 basis points)....................... 08/04/95 6.120 34,993,933
---------------
TOTAL FLOATING RATE NOTES............... 253,982,754
---------------
</TABLE>
See Accompanying Notes.
15
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
----------- ---------------------------------------- ------------------ ------------ ---------------
<C> <S> <C> <C> <C>
GOVERNMENT OBLIGATIONS -- FOREIGN (1.2%)
$ 37,500 Canadian Treasury Bills................. 09/07/95 - 5.940 -%
09/28/95 6.100 $ 36,839,424
---------------
TIME DEPOSITS -- FOREIGN (5.4%)
6,775 Banque National de Paris, Grand
Cayman................................. 06/01/95 6.062 6,775,000
52,535 Credit Agricole, Grand Cayman........... 06/01/95 6.125 52,535,000
100,000 Fuji Bank Ltd., Grand Cayman............ 06/01/95 6.156 100,000,000
---------------
TOTAL TIME DEPOSITS -- FOREIGN.......... 159,310,000
---------------
U.S. TREASURY OBLIGATIONS (1.9%)
56,614 United States Treasury Bills............ 06/01/95 - 5.505 -
09/28/95 5.775 56,536,360
---------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (17.9%)
69,200 Federal Farm Credit Bank................ 06/02/95 - 5.870 -
06/13/95 6.070 69,148,579
161,685 Federal Home Loan Bank.................. 06/01/95 - 5.870 -
05/17/96 6.420 161,606,351
39,542 Federal Home Loan Mortgage Corp......... 06/01/95 - 4.625 -
08/04/95 6.100 39,458,131
224,260 Federal National Mortgage Association... 06/02/95 - 5.870 -
09/20/95 5.970 222,900,924
37,400 Tennessee Valley Authority.............. 06/19/95 5.890 37,289,857
---------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................ 530,403,842
---------------
REPURCHASE AGREEMENT (14.4%)
427,885 Goldman Sachs Repurchase Agreement dated
5/31/95 due 6/1/95, proceeds
$427,957,265 (collateralized by
$207,604,000 U.S. Treasury Strips
0.000%, due 2/15/98 -- 2/15/19 valued
at $91,542,396; $125,770,000 U.S.
Treasury Bonds 7.875% -- 14.000%, due
11/15/03 -- 8/15/21 valued at
$178,513,484; $157,986,000 U.S.
Treasury Notes 5.000% -- 9.125% valued
at $166,387,362) (cost $427,885,000)... 06/01/95 6.080 427,885,000
---------------
TOTAL INVESTMENTS (COST $2,985,262,390)
(100.4%) 2,985,262,390
LIABILITIES IN EXCESS OF OTHER ASSETS
(-0.4%) (11,633,984)
---------------
NET ASSETS (100.0%) $ 2,973,628,406
---------------
---------------
<FN>
(a) The coupon rate shown on floating or adjustable rate securities represents the rate at the end of the period. The
due date on these types of securities reflects the final maturity date.
</TABLE>
See Accompanying Notes.
16
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Amortized Cost and Value (Note 1a) $2,557,377,390
Repurchase Agreement at Cost and Value (Note 1a) 427,885,000
Receivable for Investments Sold 30,155,151
Interest Receivable 10,262,343
Prepaid Insurance 8,560
--------------
Total Assets 3,025,688,444
--------------
LIABILITIES
Payable for Investments Purchased 49,951,710
Financial and Fund Accounting Services Fee Payable (Note 2c) 630,230
Payable to Custodian 590,511
Advisory Fee Payable (Note 2a) 412,340
Custody Fee Payable 394,332
Administration Fee Payable (Note 2b) 15,088
Fund Services Fee Payable (Note 2d) 13,827
Accrued Expenses 52,000
--------------
Total Liabilities 52,060,038
--------------
NET ASSETS
Applicable to Investors' Beneficial Interests $2,973,628,406
--------------
--------------
</TABLE>
See Accompanying Notes.
17
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1b)
Interest $ 82,171,058
EXPENSES
Advisory Fee (Note 2a) $ 1,871,179
Custodian Fees and Expenses 247,735
Financial and Fund Accounting Services Fee (Note 2c) 240,557
Fund Services Fee (Note 2d) 136,567
Administration Fee (Note 2b) 86,767
Professional Fees 36,025
Trustees' Fees and Expenses (Note 2e) 33,858
Miscellaneous 14,557
-----------
Total Expenses 2,667,245
------------
NET INVESTMENT INCOME 79,503,813
NET REALIZED GAIN ON INVESTMENTS 797,762
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 80,301,575
------------
------------
</TABLE>
See Accompanying Notes.
18
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED FOR THE FISCAL
MAY 31, 1995 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1994
--------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 79,503,813 $ 94,288,128
Net Realized Gain (Loss) on Investments 797,762 (57,650)
--------------- ------------------
Net Increase in Net Assets Resulting from Operations 80,301,575 94,230,478
--------------- ------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 8,393,417,944 13,334,979,866
Withdrawals (8,147,764,992) (13,481,612,327)
--------------- ------------------
Net Increase (Decrease) from Investors' Transactions 245,652,952 (146,632,461)
--------------- ------------------
Total Increase (Decrease) in Net Assets 325,954,527 (52,401,983)
NET ASSETS
Beginning of Period 2,647,673,879 2,700,075,862
--------------- ------------------
End of Period $2,973,628,406 $ 2,647,673,879
--------------- ------------------
--------------- ------------------
</TABLE>
--------------------------------------------------------------------------------
SUPPLEMENTARY DATA
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 12, 1993
FOR THE (COMMENCEMENT
SIX MONTHS FOR THE FISCAL OF OPERATIONS)
ENDED YEAR ENDED TO
MAY 31, 1995 NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1994 1993
-------------- --------------- ---------------
<S> <C> <C> <C>
Ratios to Average Net Assets
Expenses 0.19%(a) 0.20% 0.19%(a)
Net Investment Income 5.79%(a) 3.90% 2.98%(a)
Decrease Reflected in Expense Ratio due to
Expense Reimbursements -- 0.00%(b) --
<FN>
------------------------
(a) Annualized
(b) Less than 0.01%
</TABLE>
See Accompanying Notes.
19
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940, as amended, (the "Act") as a no-load, diversified, open-end
management investment company which was organized as a trust under the laws of
the State of New York. The Portfolio commenced operations on July 12, 1993. The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio.
The following is a summary of the significant accounting policies of the
Portfolio:
a)Investments are valued at amortized cost which approximates market value.
The amortized cost method of valuation values a security at its cost at
the time of purchase and thereafter assumes a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instruments.
The Portfolio's custodian or designated subcustodians, as the case may be,
under triparty repurchase agreements takes possession of the collateral
pledged for investments in repurchase agreements on behalf of the
Portfolio. It is the policy of the Portfolio 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 Portfolio 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)Securities transactions are recorded on a trade date basis. Investment
income consists of interest income, which includes the amortization of
premiums and discounts. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
c)The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be subject to
taxation on its share of the Portfolio's ordinary income and capital
gains. It is intended that the Portfolio's assets will be managed in such
a way that an investor in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code. The cost of
securities is the same for book and tax purposes.
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an investment advisory agreement with Morgan Guaranty
Trust Company of New York ("Morgan"). Under the terms of the investment
advisory agreement, the Portfolio pays Morgan at an annual rate of 0.20%
of the Portfolio's average daily net assets up to $1 billion and 0.10% on
any excess over $1 billion. For the six months ended May 31, 1995, this
fee amounted to $1,871,179.
20
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
b)The Portfolio has retained Signature Broker-Dealer Services, Inc.
("Signature") to serve as Administrator and exclusive placement agent.
Signature provides administrative services necessary for the operations of
the Portfolio, furnishes office space and facilities required for
conducting the business of the Portfolio and pays the compensation of the
Portfolio's officers affiliated with Signature. The agreement provides for
a fee to be paid to Signature at an annual fee rate determined by the
following schedule: 0.01% of the first $1 billion of the aggregate average
daily net assets of the Portfolio and the other portfolios subject to the
Administrative Services Agreement, 0.008% of the next $2 billion of such
net assets, 0.006% of the next $2 billion of such net assets, and 0.004%
of such net assets in excess of $5 billion. The daily equivalent of the
fee rate is applied to the daily net assets of the Portfolio. For the six
months ended May 31, 1995, Signature's fee for these services amounted to
$86,767.
c)The Portfolio has entered into a Financial and Fund Accounting Services
Agreement ("Services Agreement") with Morgan under which Morgan receives a
fee, based on the percentages described below, for overseeing certain
aspects of the administration and operation of the Portfolio. The Services
Agreement is also designed to provide an expense limit for certain
expenses of the Portfolio. If total expenses of the Portfolio, excluding
the advisory fee, custody expenses, fund services fee, and brokerage
costs, exceed the expense limit of 0.03% of the Portfolio's average daily
net assets, Morgan will reimburse the Portfolio for the excess expense
amount and receive no fee. Should such expenses be less than the expense
limit, Morgan's fee would be limited to the difference between such
expenses and the fee calculated under the Services Agreement. For the six
months ended May 31, 1995, Morgan will receive a fee of $240,557.
d)The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall supervisory
responsibilities for the Portfolio's affairs. The Trustees of the
Portfolio represent all the existing shareholders of Group. The
Portfolio's allocated portion of Group's costs in performing its services
amounted to $136,567 for the six months ended May 31, 1995.
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of The Pierpont Funds, The JPM Institutional Funds, their
corresponding Portfolios and The Series Portfolio. The Trustees' Fees and
Expenses shown in the financial statements represent the Fund's allocated
portion of the total fees and expenses. Prior to April 1, 1995, the
aggregate annual Trustee Fee was $55,000. The Trustee who serves as
Chairman and Chief Executive Officer of these Funds and Portfolios also
serves as Chairman of Group and received compensation 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 $16,000.
21
<PAGE>
JPM INSTITUTIONAL MONEY MARKET FUND
JPM INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
JPM INSTITUTIONAL TREASURY MONEY MARKET FUND
JPM INSTITUTIONAL SHORT TERM BOND FUND
JPM INSTITUTIONAL BOND FUND
JPM INSTITUTIONAL TAX EXEMPT BOND FUND
JPM INSTITUTIONAL NY TOTAL RETURN BOND FUND
JPM INSTITUTIONAL INTERNATIONAL BOND FUND
JPM INSTITUTIONAL DIVERSIFIED FUND
JPM INSTITUTIONAL SELECTED U.S. EQUITY FUND
JPM INSTITUTIONAL U.S. SMALL COMPANY FUND
JPM INSTITUTIONAL INTERNATIONAL EQUITY FUND
JPM INSTITUTIONAL EMERGING MARKETS EQUITY FUND
FOR MORE INFORMATION ON THE JPM INSTITUTIONAL FAMILY OF FUNDS, CALL J.P. MORGAN
FUNDS SERVICES AT (800)766-7722.
THE JPM INSTITUTIONAL MONEY MARKET FUND
SEMI-ANNUAL REPORT
MAY 31, 1995
