THE JPM INSTITUTIONAL FUNDS
Supplement dated October 11, 1996 to the Statement of Additional Information
dated September 27, 1996 and, as applicable, the following Prospectuses:
The JPM Institutional Funds, dated 9/27/96
The JPM Institutional Treasury Money Market Fund, dated 3/1/96
The JPM Institutional Money Market Fund, dated 3/1/96
The JPM Institutional Tax Exempt Money Market Fund, dated 12/29/95
The JPM Institutional Short Term Bond Fund, dated 3/1/96
The JPM Institutional Bond Fund, dated 3/1/96
The JPM Institutional Tax Exempt Bond Fund, dated 12/29/95
The JPM Institutional New York Total Return Bond Fund, dated 8/1/96
The JPM Institutional International Bond Fund, dated 12/29/95
The JPM Institutional Diversified Fund, dated 9/27/96
The JPM Institutional Selected U.S. Equity Fund, dated 9/27/96
The JPM Institutional U.S. Small Company Fund, dated 9/27/96
The JPM Institutional International Equity Fund, dated 3/1/96
The JPM Institutional Emerging Markets Equity Fund, dated 3/1/96
The JPM Institutional European Equity Fund, dated 9/11/96
The JPM Institutional Japan Equity Fund, dated 9/11/96
The JPM Institutional Asia Growth Fund, dated 9/11/96
(Supersedes all supplements dated prior to October 11, 1996)
1. The following changes were effective as of August 1, 1996 with respect to the
Prospectuses for the Treasury Money Market, Money Market, Tax Exempt Money
Market, Short Term Bond, Bond, Tax Exempt Bond, International Bond,
International Equity and Emerging Markets Equity Funds:
The Fund's address is 60 State Street, Suite 1300, Boston, Massachusetts 02109.
Administrative functions formerly provided to the Fund by Signature
Broker-Dealer Services, Inc. are provided by Funds Distributor, Inc. ("FDI") or
Morgan, and FDI became the distributor of the Fund and exclusive placement agent
for the Fund's corresponding Portfolio. FDI, a registered broker-dealer, is a
wholly owned indirect subsidiary of Boston Institutional Group, Inc. In
addition, certain accounting services provided by Morgan are being provided by
State Street Bank and Trust Company.
The Fund will continue to invest all its assets in its corresponding Portfolio
and will operate in a master-feeder structure. These changes include an increase
in fees payable to Morgan that is offset by a decrease in other fees with the
result that there is no adverse impact on the expenses of the Fund.
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2. The following replaced the "Expense Table" and "Example" in
the Short Term Bond Fund Prospectus effective as of July 1, 1996:
Effective July 1, 1996 the Total Annual Operating Expenses of the Fund were
reduced to 0.25%. The Expense Table and Example for the Fund are revised as
follows:
EXPENSE TABLE
ANNUAL OPERATING EXPENSES
Advisory fees......................................................... 0.25%
Rule 12b-1 fees........................................................ None
Other Expenses (after expense reimbursement) ......................... 0.00%
-----
Total Operating Expenses (after expense reimbursement) ............... 0.25%
EXAMPLE
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 year .................................................................. $3
3 years ................................................................. $8
5 years ................................................................ $14
10 years ............................................................... $32
The "Expenses" section in the Short Term Bond Fund Prospectus is revised to
reflect the following:
Effective July 1, 1996 through at least February 28, 1997, Morgan will reimburse
the Fund to the extent necessary to maintain the Fund's total operating expenses
(which includes expenses of the Fund and the Portfolio) at the annual rate of
0.25% of the Fund's average daily net assets.
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3. The following restates the sentence regarding the rate of Total Operating
Expenses without expense reimbursements in the footnote to the "Expense Table"
in the Prospectus for each Fund listed below as applicable to the Fund described
in such Prospectus:
If the above expense table reflected these expenses without current
reimbursements, Other Expenses and Total Operating Expenses would be equal on an
annual basis to the following respective percentages of such assets of the Fund:
Other Expenses Total Operating Expenses
Treasury Money Market Fund .......... 0.31% 0.51%
Money Market Fund ................... 0.21% 0.33%
Tax Exempt Money Market Fund ........ 0.30% 0.47%
Short Term Bond Fund ................ 1.04% 1.29%
Bond Fund ........................... 0.37% 0.67%
Tax Exempt Bond Fund ................ 0.44% 0.74%
International Bond Fund ............. 2.01% 2.36%
International Equity Fund ........... 0.45% 1.05%
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4. The following is inserted as the first column in the "Financial Highlights"
table in the Prospectus for each Fund listed below as applicable to the Fund
described in such Prospectus:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET TAX EXEMPT MONEY MARKET
FUND MONEY MARKET FUND FUND
For the Six Months Ended For the Six Months Ended For the Six Months Ended
April 30, 1996 (unaudited) May 31, 1996 (unaudited) February 29, 1996 (unaudited)
-------------------------- ------------------------ -----------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00
----- ----- -----
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income 0.0257 0.0267 0.0172
Net Realized Gain (Loss)
on Investment 0.0003 0.0000 (a) 0.0000 (a)
------ ------ ------
Total from Investment
Operations 0.0260 0.0267 0.0172
------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income (0.0257) (0.0267) (0.0172)
Net Realized Gain (0.0003) (0.0003) --
-------- -------- ------
Total Distributions to
Shareholders (0.0260) (0.0270) (0.0172)
-------- -------- --------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00
===== ===== =====
Total Return 2.62% (b) 2.73% (b) 1.73% (b)
RATIOS AND SUPPLEMENTAL
DATA:
Net Assets, End of Period
(in thousands) $184,451 $1,239,517 $148,054
Ratios to Average Net
Assets
Expenses 0.20% (c) 0.20% (c) 0.35% (c)
Net Investment Income 5.18% (c) 5.33% (c) 3.43% (c)
Decrease Reflected in
Expense Ratio due to Expense 0.23% (c) 0.12% (c) 0.09% (c)
Reimbursement
(a) Less than $0.0001. (b) Not Annualized. (c) Annualized.
</TABLE>
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<TABLE>
<CAPTION>
SHORT TERM BOND FUND BOND FUND TAX EXEMPT BOND FUND
For the Six Months Ended For the Six Months Ended For the Six Months Ended
April 30, 1996 (unaudited) April 30, 1996 (unaudited) February 29, 1996 (unaudited)
-------------------------- -------------------------- -----------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $9.83 $9.98 $10.01
----- ----- ------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income 0.28 0.30 0.24
Net Realized and
Unrealized Gain (0.07) (0.27) 0.15
(Loss) on Investment ------ ------ -----
Total from Investment
Operations 0.21 0.03 0.39
---- ---- ----
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income (0.28) (0.30) (0.24)
Net Realized Gain -- (0.03) (0.02)
------- ------ ------
Total Distributions to
Shareholders (0.28) (0.33) (0.26)
------ ------ ------
NET ASSET VALUE, END OF
PERIOD: $9.76 $9.68 $10.14
===== ===== ======
Total Return 2.09% (a) 0.26% (a) 3.89% (a)
RATIOS AND SUPPLEMENTAL
DATA:
Net Assets, End of Period
(in thousands) $6,221 $618,649 $90,183
Ratios to Average Net
Assets
Expenses 0.45% (b) 0.50% (b) 0.50% (b)
Net Investment Income 5.61% (b) 6.18% (b) 4.77% (b)
Decrease Reflected in
Expense Ratio due to Expense 0.80% (b) 0.01% (b) 0.07% (b)
Reimbursement
(a) Not Annualized. (b) Annualized.
</TABLE>
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<TABLE>
<CAPTION>
EMERGING MARKETS EQUITY FUND
INTERNATIONAL BOND FUND INTERNATIONAL EQUITY FUND For the Six Months Ended
For the Six Months Ended For the Six Months Ended April 30, 1996 (unaudited)
March 31, 1996 (unaudited) April 30, 1996 (unaudited) ----------------------------
-------------------------- --------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $11.12 $10.44 $9.71
------ ------ -----
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income 0.21 0.04 0.04
Net Realized and
Unrealized Gain
(Loss) on Investment 0.35 1.38 1.12
and Foreign Currency ---- ---- ----
Total from Investment
Operations 0.56 1.42 1.16
---- ---- ----
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net Investment Income -- (0.24) (0.08)
Net Realized Gain (1.08) (0.06) --
------ ------ -----
Total Distributions to
Shareholders (1.08) (0.30) (0.08)
------ ------ ------
NET ASSET VALUE, END OF
PERIOD $10.60 $11.56 $10.79
====== ====== ======
Total Return 5.14% (a) 13.82% (a) 12.04% (a)
RATIOS AND SUPPLEMENTAL
DATA:
Net Assets, End of Period
(in thousands) $4,262 $677,023 $249,002
Ratios to Average Net
Assets
Expenses 0.65% (b) 0.92% (b) 1.39% (b)
Net Investment Income 5.20% (b) 0.89% (b) 1.00% (b)
Decrease Reflected in
Expense Ratio due to
Expense Reimbursement 1.83% (b) -- --
(a) Not Annualized. (b) Annualized.
</TABLE>
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5. The following restates the last sentence of the first paragraph under the
caption "Investment Objective and Policies - Quality Information" in the
Prospectus for the Tax Exempt Money Market Fund:
The credit quality of variable rate demand notes and other municipal obligations
is frequently enhanced by various arrangements with domestic or foreign
financial institutions, such as letters of credit, guarantees and insurance, and
these arrangements are considered, along with the credit quality of such
institutions, when investment quality is evaluated. Favorable or unfavorable
changes in the credit quality of these institutions may cause gains or losses to
the Portfolio and affect the Fund's share price.
6. The following is added to the section entitled "Shareholder Servicing"
in each Prospectus referenced above:
The Fund(s) may be sold to or through Eligible Institutions, including financial
institutions and broker-dealers, that may be paid fees by Morgan or its
affiliates for services provided to their clients that invest in the Fund(s).
Organizations that provide recordkeeping or other services to certain employee
benefit or retirement plans that include the Fund(s) as an investment
alternative may also be paid a fee.
7. The following section under "Purchase of Shares" is amended in its
entirety as applicable to the Fund(s) described in each Prospectus referenced
above:
METHOD OF PURCHASE. Investors may open accounts with the Fund(s) only through
the Distributor. All purchase transactions in Fund accounts are processed by
Morgan as shareholder servicing agent and the Fund is authorized to accept any
instructions relating to a Fund account from Morgan as agent for the customer.
All purchase orders must be accepted by the Distributor. Investors must be
either customers of Morgan or of an Eligible Institution or employer-sponsored
retirement plans that have designated the Fund as investment option for the
plans. Prospective investors who are not already customers of Morgan may apply
to become customers of Morgan for the sole purpose of Fund transactions. There
are no charges associated with becoming a Morgan customer for this purpose.
Morgan reserves the right to determine the customers that it will accept, and
the Trust reserves the right to determine the purchase orders that it will
accept.
Each Fund requires the minimum initial investment shown below and a minimum
subsequent investment of $25,000:
FUND INITIAL INVESTMENT
- ---- ------------------
The JPM Institutional Money Market Fund $10,000,000
The JPM Institutional Tax Exempt Money Market Fund $10,000,000
The JPM Institutional Treasury Money Market Fund $10,000,000
The JPM Institutional Short Term Bond Fund $ 5,000,000
The JPM Institutional Bond Fund $ 5,000,000
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FUND INITIAL INVESTMENT
- ---- ------------------
The JPM Institutional Tax Exempt Bond Fund $ 5,000,000
The JPM Institutional New York Total Return Bond Fund $ 5,000,000
The JPM Institutional International Bond Fund $ 1,000,000
The JPM Institutional Selected U.S. Equity Fund $ 3,000,000
The JPM Institutional U.S. Small Company Fund $ 1,000,000
The JPM Institutional International Equity Fund $ 1,000,000
The JPM Institutional Emerging Markets Equity Fund $ 500,000
The JPM Institutional Diversified Fund $ 3,000,000
The JPM Institutional Japan Equity Fund $ 1,000,000
The JPM Institutional European Equity Fund $ 1,000,000
The JPM Institutional Asia Growth Fund $ 500,000
These minimum investment requirements may be waived for certain investors,
including investors for whom the Advisor is a fiduciary, who maintain related
accounts with the Funds or the Advisor, who make investments for a group of
clients, such as financial advisors, trust companies and investment advisors, or
who maintain retirement accounts with the Funds.
8. All references to The Pierpont Funds and a Pierpont Fund under the captions
"Management of the Trust and the Portfolio(s)" and "Exchange of Shares" are
changed to "The JPM Pierpont Funds" and "JPM Pierpont Fund," respectively, in
each Prospectus referenced above.
9. The following is inserted under the caption "Organization" in the Prospectus
for each Fund listed below as applicable to the Fund described in such
Prospectus:
Money Market Fund
As of September 30, 1996, Citibank technically met the definition of a control
person of the Fund.
Tax Exempt Money Market Fund
As of September 30, 1996, Morgan Guaranty Trust Co. of New York as agent for
T. Pyle and J. Pyle technically met the definition of a control person of the
Fund.
Short Term Bond Fund
As of September 30, 1996, Morgan Guaranty Trust Co. of New York as agent for
Warner Lambert technically met the definition of a control person of the Fund.
International Bond Fund
As of September 30, 1996, J.P. Morgan as agent for Shell Savings Group Trust
technically met the definition of a control person of the Fund.
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