<PAGE>
LETTER TO THE SHAREHOLDERS OF THE JPM INSTITUTIONAL ASIA GROWTH FUND
August 1, 1997
Dear Shareholder:
It has certainly been an exciting six months for Asian equity markets, among
which we've seen vastly different results. The best-performing market was Hong
Kong, as investors drove stock prices to new highs, expressing optimism about
the imminent handover to Chinese sovereignty. The other extreme was Thailand,
where weakness in the financial and real estate sectors and pressures on the
currency sent the market tumbling. Toward the end of the period, currency fears
that began in Thailand started to spread to other Asian countries. Reflecting
the financial turbulence of the region, the Fund produced a return of -2.96% for
the six months ended June 30, 1997. For the same period, the Fund's benchmark
posted a return of -3.81%, while the Lipper Pacific ex Japan Funds Average
posted a return of 6.02%.
The Fund's net asset value per share decreased from $10.14 to $9.84 at the end
of the period. The Fund's net assets declined from $3.4 million on December 31,
1996 to $1.7 million, while the net assets of The Asia Growth Portfolio, in
which the Fund invests, increased from $122.3 million to $128.0 million.
The report that follows includes an interview with Steven Ho, a member of the
portfolio management team. This interview is designed to answer commonly asked
questions about the Fund, elaborate on what happened during the reporting
period, and provide an outlook for the months ahead.
As chairman and president of Asset Management Services, we look forward to
sharing Morgan's insights regarding global markets with you going forward. If
you have any comments or questions, please call your Morgan representative or
J.P. Morgan Funds Services at (800) 766-7722.
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 OF CONTENTS
LETTER TO THE SHAREHOLDERS........1 FUND FACTS AND HIGHLIGHTS............7
FUND PERFORMANCE..................2 FINANCIAL STATEMENTS................10
PORTFOLIO MANAGER Q&A.............3
1
<PAGE>
FUND PERFORMANCE
EXAMINING PERFORMANCE
One way to evaluate 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 of 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 RETURNS
--------------------------- ------------------------------
THREE SIX ONE SINCE
AS OF JUNE 30, 1997 MONTHS MONTHS YEAR INCEPTION*
- ----------------------------------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C>
The JPM Institutional Asia Growth Fund 0.61% -2.96% -2.06 -0.44%
Asia Growth Benchmark** 1.26% -3.81% -2.96% -0.74%
Lipper Pacific ex Japan Funds Average 8.88% 6.02% 8.72% 5.50%
</TABLE>
* THE FUND COMMENCED OPERATIONS ON FEBRUARY 29, 1996.
**A CUSTOMIZED BENCHMARK CONSISTING OF THE INTERNATIONAL FINANCE CORPORATION
(IFC) INVESTABLE INDEXES FOR CHINA, INDONESIA, PHILIPPINES, S. KOREA, AND
TAIWAN 5% EACH), MALAYSIA (20%), THAILAND (12%), AND THE MSCI INDEXES FOR
HONG KONG (32%), AND SINGAPORE (11%). THE INDICES DO NOT INCLUDE FEES OR
OPERATING EXPENSES AND ARE NOT AVAILABLE FOR ACTUAL INVESTMENT.
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. ALL RETURNS ASSUME THE
REINVESTMENT OF DISTRIBUTIONS. FUND RETURNS ARE NET OF FEES AND REFLECT THE
REIMBURSEMENT OF CERTAIN FUND AND PORTFOLIO EXPENSES AS DESCRIBED IN THE
PROSPECTUS. HAD EXPENSES NOT BEEN REIMBURSED, RETURNS WOULD HAVE BEEN LOWER.
LIPPER ANALYTICAL SERVICES, INC. IS A LEADING SOURCE FOR MUTUAL FUND DATA.
2
<PAGE>
PORTFOLIO MANAGER Q&A
[PHOTO] The following is an interview with STEVEN HO, vice president and fund
manager for non-Japanese Pacific Rim equities. Prior to his recent
transfer to the London office, he was head of equity research in the
Singapore office and was responsible for Southeast Asian equity
portfolios. Between 1990 and 1993, Mr. Ho was a member of the London
equity research group, with responsibility for the electronics and
property sectors. He joined Morgan in Singapore in 1984. He has a B.S.
in Business Management and is a Chartered Financial Analyst. This
interview was conducted on July 11, 1997 and reflects his views on that
date.
IT'S BEEN AN EXCITING YEAR FOR HONG KONG. JUST PRIOR TO THE HANDOVER TO
CHINESE SOVEREIGNTY, THE MARKET WAS DESCRIBED AS EUPHORIC. COULD YOU EXPLAIN
THE UNIQUE DYNAMICS BEHIND THAT MARKET'S STRONG SHOWING? AND WHAT LIES AHEAD
FOR THIS ONE-OF-A-KIND MARKET?
SH: That's a big question. Stepping back a bit, the critical point for Hong
Kong wasn't the actual handover. Rather, it was the appointment of the new
chief executive, Tung Chee Hwa, the son of a shipping magnate and himself a
wealthy entrepreneur. He is a moderate who understands what business needs
are and, at the same time, is well connected with the mainland government. He
is perceived to be the best possible candidate for representing the views of
the people of Hong Kong and finding the middle ground between perpetuating
the business environment that Hong Kong thrives on and appeasing mainland
Chinese authorities, many of whom see Hong Kong as being too democratic and
somewhat out of their control. Tung's election was viewed by the markets as
being very positive.
Another factor was the belief among both investors and Hong Kong's
citizens that China wanted to make the handover a celebration. It's important
to remember that China wants to make a good showing in Hong Kong, because it
ultimately has its eyes on Taiwan -- and Taiwan's $90 billion in foreign
exchange reserves. The reunification of China and Taiwan, which the mainland
Chinese consider a renegade province, is inevitable in the long run. A smooth
reunification with Hong Kong will go a long way towards bringing that about
peacefully.
With this in mind, the Chinese were pumping liquidity into Hong Kong in
various ways. First, and most obviously, there were asset injections into
"red chips." Red chips are Hong Kong-listed companies that are owned by
mainland Chinese entities, mainly municipal governments. Second, many Chinese
entities were buying shares in Hong Kong and warehousing them. Third, and
less apparent, was the large amount of property purchased by the Chinese. By
one estimate, a third of all grade A property purchases in Hong Kong for the
first half of this year, which amounted to 37 billion Hong Kong dollars, were
generated by the Chinese. This lifted capital values and depressed yields to
record lows. All of this helped give the impression that there was a great
deal of confidence in Hong Kong.
The housing market also took off, despite the government's announcement
that they would increase the supply of land for housing development by nearly
50% over the next five years. The euphoria in the housing market also added
to the "feel good factor," which, in turn, helped stimulate domestic
consumption. Overall, I guess you'd say the Chinese managed to engineer the
lifting of people's sentiments and the development of
3
<PAGE>
optimistic expectations of the future.
Also helping Hong Kong were the difficult business conditions in the rest
of Asia. Other Asian countries are only just now beginning to come out of the
cyclical downturn, whereas Hong Kong seems to have leaped ahead. That's due
in large part to China's coming out of its cyclical downturn early, after
having gone through several austere years of belt tightening. Being the
gateway to China, Hong Kong has directly benefited from that. Being further
ahead in the economic cycle than its neighbors has given international
investors comfort.
What lies ahead for the world's most dynamic economy? While,
unfortunately, we're likely to see a chipping away of individual freedoms and
rights, we believe the Chinese will honor their obligation to uphold the
basic laws and structure of Hong Kong. We think the Chinese will continue to
foster a fairly liberal economic environment that will be conducive for
business. As far as the market is concerned, there will be a continued focus
on companies with mainland ties. We think there is good reason to be
optimistic about Hong Kong for the long term.
Shorter term, there is some cause for concern. After such a banner year,
valuations in the equity market are high. And many investors are already
overweighted in the Hong Kong market, so we're not likely to see much more
non-Chinese money coming in. These investors will be paying close attention
to interest rates in the U.S. The Hong Kong market is very leveraged to the
U.S. market and to U.S. interest rates because its currency is referenced to
the U.S. dollar. A rate rise in the U.S. could be very negative for the Hong
Kong market. Especially since real estate, which is an interest
rate-sensitive sector, is such a large part of the market there. Almost
one-third of the market is directly related to real estate, and nearly
another third is indirectly related.
Also within the real estate sector, the Hong Kong and Chinese governments
are taking steps to curb the speculation seen in the housing market. Along
with the increase in the supply of land for development, these steps might
include the enforcement of more conservative lending policies by banks. None
of this should cause a collapse, but it may take the steam out of the market
for a while. All things considered, the Hong Kong stock market has done very
well, so we do not expect the market to keep going up the way it has.
THAILAND HAS BEEN A THORN IN THE SIDE OF ASIAN EQUITY PORTFOLIOS FOR SOME
TIME NOW AND, ACCORDING TO THE FINANCIAL PRESS, THERE IS NO GOOD NEWS ON THE
HORIZON. WHAT HAS HAPPENED THERE, AND IS THERE A SILVER LINING TO BE FOUND?
SH: Thailand chose to have an exchange rate which was essentially fixed to
the U.S. dollar. As a consequence, domestic interest rates were much higher
than offshore interest rates, and Thai corporations borrowed heavily
offshore. There is estimated to be $70 billion of private-sector foreign
borrowing, substantially unhedged, among Thai corporations. Just to put this
into context, that's about the same size as the market capitalization of
Thailand today -- and roughly half of its total GDP. That's a substantial
number! Before things unraveled, corporations could borrow offshore, with no
foreign exchange risk and invest domestically. And one of the biggest targets
for investment was real estate, which we all know is oversupplied. The
residential market alone is currently awash with between 200,000 and 250,000
unoccupied housing units.
Today, there are $20 billion worth of nonperforming loans in the finance
sector. Many of the country's 91 finance and securities houses are in
financial difficulty and, according to the government, 16 of them are
actually insolvent. This predicament is forcing a consolidation in the
industry through mergers and acquisi-
4
<PAGE>
tions. Their recapitalization will require a lot of new equity and it will be
a tremendous drain on liquidity, which will not be good for stocks.
On the currency side, the pressures that had been building were
intensified recently by speculative attack. The Thai government spent a huge
sum defending the currency, but they ultimately threw in the towel on July
2nd, which is just beyond the Fund's reporting period. Fortunately, in late
June, we fully hedged the Portfolio against a devaluation of the Thai baht.
This hedge paid off in July, but it won't be reflected in the performance
numbers in this report, which covers the Fund's results through June 30th.
So, is there a silver lining? One thing this crisis should do is to force
Thai politicians to make some prudent policy decisions. Thailand has had
numerous coalition governments where the different parties have had great
difficulty working with one another. This has led to many compromises in
decision making. Hopefully, this crisis will serve as a wake-up call.
The other positive thing one could say about this crisis is that there is
value to be found in the domestic market. We believe the market has bottomed
and many of these stocks have fallen so far that they are bargain-priced for
local investors. This is not quite the case in the offshore market, where the
premiums that foreign investors have to pay make valuations less attractive.
More fundamentally, the problem that Thailand faces is structural.
Thailand faces a bottleneck in its lack of skilled labor. That could keep
Thailand from upgrading its industries to encompass more high-tech processes,
thereby keeping it from moving up the ladder of value-added production.
WHAT REGIONAL THEMES HAVE INFLUENCED ASIAN GROWTH MARKETS OVER THE PAST SIX
MONTHS?
SH: There are a few. The fear that currency problems will spread from
Thailand and infect the whole region is on everyone's mind. The Philippine
peso also came under pressure, which resulted in its devaluation in early
July as well. With only $10-$11 billion in foreign exchange reserves, it was
an easy target for speculators to bully. However, we are optimistic about the
Philippines. While there could be more downside in the currency, the
Philippine economy is much more sound, primarily because it is not as
leveraged. They haven't borrowed significantly overseas to fund domestic
building or other investment activity. Also, the Philippine economy is
relatively more competitive. They have a lot of foreign trained graduates
that can staff sophisticated factories, which has recently led to exports
growing at 20%-30% for the year to date. The economy there is in a very good
niche.
Another theme is overbuilding in real estate. And nowhere is that more
striking than in Malaysia. Highlighting Malaysia's excesses will be the
world's tallest building, the world's longest building, the new government
administrative center, the high-tech city, and the multi-media super
corridor. We think that occupancy rates could drop as low as 75% for office
space and 70% for retail space in the next two to three years from their
current 90%-95% levels. To add to Malaysia's woes, its current account
deficit is deteriorating. And with domestic demand still quite strong, there
is little scope for easing in monetary policy, which will not help the
indebted corporate sector.
On a more positive note, a lot is happening in Asia that should support
the regional economy. For one, Japan continues to see Asia as the preferred
investment location for its offshore production facilities. I think it's also
worth noting that there is an increasing amount of intra-Asian trade. Another
helpful and uniquely Asian phenomenon is the very high savings rate -- about
35% of the GDP -- which should continue to support domestic growth.
The most encouraging sign, however, is that OEDC growth has picked up, and
historically, there has been
5
<PAGE>
a close relationship between OEDC growth and the export growth of Asian
economies. Though there seems to be a bit of a lag in that relationship this
time around, as OEDC economies continue to grow, Asian economies should start
to benefit.
COULD YOU PROVIDE AN EXAMPLE OF A STOCK THAT HELPED PERFORMANCE OVER THE
SIX-MONTH PERIOD ALONG WITH AN EXAMPLE THAT HINDERED PERFORMANCE?
SH: One positive stock story would be HSBC HOLDINGS PLC of Hong Kong.
Investors have started to regard it as a global banking group, deserving of a
higher valuation. P.T. MATAHARI PUTRA PRIMA is another positive stock
selection story. It's an Indonesian retail group which had been expanding
aggressively over the past two or three years. The entry of a new
shareholder, the Lippo Group, led to renewed focus on improving Matahari's
operating efficiency and profitability. As the Lippo Group began to deliver
on its promises, Matahari's share price took off.
On the negative side, performance was hindered by HONG LEONG PROPERTIES
BERHAD, a Malaysian real estate developer and one of five participants in
Putra Jaya, the new government administrative center being built just south
of Kuala Lumpur. Putra Jaya is a 10-to-20-year, multi-billion dollar project
that should provide a consistent income flow over the medium term. The price
of Hong Leong Properties fell in March, however, when the government
announced new curbs on lending in property sector, particularly in the
housing sector. This announcement knocked the wind out of all companies
involved in property.
LOOKING AHEAD, WHAT IS YOUR OUTLOOK FOR THE REGION, AND WHICH COUNTRIES SHOW
THE MOST PROMISE FOR THE UPCOMING SIX MONTHS?
SH: In the short term, currency fears are likely to prevent the markets from
running ahead. However, prospects for the medium term remain largely
undiminished and current valuations are attractive in some countries.
We are currently overweighting Indonesia, the Philippines, and Singapore in
the Portfolio, while maintaining a neutral position in Korea. Those are the
countries in which we feel relatively comfortable about both fundamentals and
valuations. Indonesia and Singapore, in particular, have very sound economic
policies, yet their markets have been dragged down along with the rest of the
region. On a relative basis, their equity markets look attractive. Also,
Singapore is the most leveraged to a cyclical upturn, which we think is on
its way.
6
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
The JPM Institutional Asia Growth Fund seeks to provide a high total return
from a portfolio of equity securities of companies in Asian growth markets.
It is designed for long-term investors who want to diversify their
investments by adding exposure to the rapidly growing Asian markets. As an
international investment, the Fund is subject to foreign market, political,
and currency risk.
- -------------------------------------------------------------------------------
COMMENCEMENT OF OPERATIONS
2/29/96
- -------------------------------------------------------------------------------
NET ASSETS AS OF 6/30/97
$1,672,575
- -------------------------------------------------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/24/97
- -------------------------------------------------------------------------------
EXPENSE RATIO
The Fund's current annualized expense ratio of 1.25% 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 JUNE 30, 1997
COUNTRY ALLOCATION
(AS A PERCENTAGE OF TOTAL INVESTMENTS)
[CHART]
HONG KONG 32.1%
MALAYSIA 17.5%
SINGAPORE 10.7%
THAILAND 10.2%
PHILIPPINES 6.8%
INDONESIA 6.1%
SOUTH KOREA 5.3%
TAIWAN 2.5%
CHINA 1.9%
OTHER 6.9%
LARGEST PORTFOLIO HOLDINGS % OF TOTAL
(EXCLUDING SHORTTERM INVESTMENTS) INVESTMENTS
- --------------------------------------------------------------------------------
HUTCHISON WHAMPOA, LTD. (HONG KONG) 5.2%
SWIRE PACIFIC, LTD. (HONG KONG) 4.7%
CHEUNG KONG HOLDINGS, LTD. (HONG KONG) 4.3%
HENDERSON LAND DEVELOPMENT
COMPANY, LTD. (HONG KONG) 2.5%
SUN HUNG KAI PROPERTIES, LTD. (HONG KONG) 2.3%
HONG KONG & CHINA GAS CO., LTD
(HONG KONG) 2.1%
UNITED OVERSEAS BANK, LTD. (SINGAPORE) 1.8%
HONG KONG ELECTRIC HOLDINGS, LTD.
(HONG KONG) 1.7%
BANGKOK BANK PUBLIC CO., LTD. (THAILAND) 1.6%
ESPRIT HOLDINGS, LTD. (HONG KONG) 1.5%
7
<PAGE>
FUNDS DISTRIBUTOR, INC. IS THE DISTRIBUTOR OF THE JPM INSTITUTIONAL ASIA
GROWTH 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. INVESTMENT RETURN
AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND CAN FLUCTUATE, SO AN
INVESTOR'S SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
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, assume the reinvestment of Fund distributions and reflect
the reimbursement of certain Fund expenses as described in the Prospectus.
Had expenses not been subsidized, returns would have been lower. The Fund
invests all of its investable assets in The Asia Growth Portfolio (the
"Portfolio"), a separately registered investment company which is not
available to the public but only to other collective investment vehicles such
as the Fund. References to specific securities and their issuers are for
illustrative purposes only and should not be interpreted as recommendations
to purchase or sell such securities. Opinions expressed herein on current
market conditions are subject to change without notice. The Portfolio invests
in foreign securities which are subject to special risks; prospective
investors should refer to the Fund's Prospectus for a discussion of these
risks.
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.
8
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in The Asia Growth Portfolio
("Portfolio"), at value $1,705,143
Deferred Organization Expenses 12,468
Receivable for Expense Reimbursements 5,380
Other Assets 280
----------
Total Assets 1,723,271
----------
LIABILITIES
Organization Expenses Payable 6,789
Shareholder Servicing Fee Payable 162
Administrative Services Fee Payable 50
Administration Fee Payable 12
Accrued Trustees' Fees and Expenses 9
Fund Services Fee Payable 1
Accrued Expenses 43,673
----------
Total Liabilities 50,696
----------
NET ASSETS
Applicable to 169,926 Shares of Beneficial
Interest Outstanding
(par value $0.001, unlimited shares authorized) $1,672,575
----------
----------
Net Asset Value, Offering and Redemption Price
Per Share $9.84
----
----
ANALYSIS OF NET ASSETS
Paid-in Capital $1,736,633
Undistributed Net Investment Income 7,583
Accumulated Net Realized Loss on Investment and
Foreign Currency Transactions (97,055)
Net Unrealized Appreciation of Investment and
Foreign Currency Translations 25,414
----------
Net Assets $1,672,575
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
10
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO
Allocated Dividend Income (Net of Foreign
Withholding Tax of $3,840) $ 27,063
Allocated Interest Income 3,568
Allocated Portfolio Expenses (15,785)
--------
Net Investment Income Allocated from
Portfolio 14,846
FUND EXPENSES
Registration Fees $ 8,836
Transfer Agent Fees 8,415
Printing Expenses 6,442
Professional Fees 5,617
Amortization of Organization Expenses 1,683
Shareholder Servicing Fee 1,331
Administrative Services Fee 417
Fund Services Fee 47
Administration Fee 44
Trustees' Fees and Expenses 25
Insurance Expense 5
Miscellaneous 793
-------
Total Fund Expenses 33,655
Less: Reimbursement of Expenses (32,798)
-------
NET FUND EXPENSES 857
--------
FROM NET INVESTMENT INCOME 13,989
NET REALIZED GAIN ON INVESTMENT AND FOREIGN
CURRENCY TRANSACTIONS ALLOCATED FROM PORTFOLIO 36,316
NET CHANGE IN UNREALIZED DEPRECIATION OF
INVESTMENT AND FOREIGN CURRENCY TRANSLATIONS
ALLOCATED FROM PORTFOLIO (137,352)
--------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(87,047)
--------
--------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
11
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 29,
FOR THE SIX 1996
MONTHS ENDED (COMMENCEMENT OF
JUNE 30, OPERATIONS) TO
1997 DECEMBER 31,
(UNAUDITED) 1996
------------ ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
From Net Investment Income $ 13,989 $ 18,247
Net Realized Gain (Loss) on Investment and
Foreign Currency Transactions Allocated from
Portfolio 36,316 (139,519)
Net Change in Unrealized Appreciation
(Depreciation) of Investment and Foreign
Currency Translations Allocated from Portfolio (137,352) 162,766
------------ ----------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (87,047) 41,494
------------ ----------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income -- (18,247)
In Excess of Net Investment Income -- (5,794)
------------ ----------------
Total Distributions to Shareholders -- (24,041)
------------ ----------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Shares of Beneficial Interest Sold 279,612 3,437,576
Reinvestment of Dividends -- 6,957
Cost of Shares of Beneficial Interest Redeemed (1,881,976) (100,000)
------------ ----------------
Net Increase (Decrease) from Transactions in
Shares of Beneficial Interest (1,602,364) 3,344,533
------------ ----------------
Total Increase (Decrease) in Net Assets (1,689,411) 3,361,986
NET ASSETS
Beginning of Period 3,361,986 --
------------ ----------------
End of Period (including undistributed net
investment income of $7,583 and distributions
in excess of net investment income of $6,406,
respectively) $ 1,672,575 $ 3,361,986
------------ ----------------
------------ ----------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
12
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 29,
1996
FOR THE (COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) TO
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
---------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.14 $ 10.00
---------------- ----------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.06 .06
Net Realized and Unrealized Gain (Loss) on
Investment (0.36) .15
---------------- ----------------
Total from Investment Operations (0.30) 0.21
---------------- ----------------
LESS DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income -- (.06)
In Excess of Net Investment Income -- (.01)
---------------- ----------------
Total Distributions to Shareholders -- (.07)
---------------- ----------------
NET ASSET VALUE, END OF PERIOD $ 9.84 $ 10.14
---------------- ----------------
---------------- ----------------
</TABLE>
<TABLE>
<S> <C> <C>
RATIOS AND SUPPLEMENTAL DATA
Total Return (2.96%)(a) 2.13%(a)
Net Assets, End of Period (in thousands) $ 1,673 $ 3,362
Ratios to Average Net Assets
Expenses 1.25%(b) 1.25%(b)
Net Investment Income 1.05%(b) 0.95%(b)
Decrease Reflected in Expense Ratio due to
Expense Reimbursement 2.46%(b) 1.25%(b)(c)
</TABLE>
- ------------------------
(a) Not Annualized.
(b) Annualized.
(c) After consideration of certain state limitations.
The Accompanying Notes are an Integral Part of the Financial Statements.
13
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The JPM Institutional Asia Growth Fund (the "Fund") is a separate series of The
JPM Institutional Funds, a Massachusetts business trust (the "Trust") which was
organized on November 4, 1992. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund commenced operations on February 29, 1996.
The Fund invests all of its investable assets in The Asia Growth Portfolio (the
"Portfolio"), a diversified open-end management investment company having the
same investment objective as the Fund. The value of such investment included in
the Statement of Assets and Liabilities reflects the Fund's proportionate
interest in the net assets of the Portfolio (approximately 1% at June 30, 1997).
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 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)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 and
unrealized gain and loss and adjusts its investment in the Portfolio each
day. All the net investment income and realized and unrealized 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)Distributions to shareholders of net investment income and net realized
capital gains, if any, are declared and paid annually.
d)The Fund incurred organization expenses in the amount of $17,000. Morgan
Guaranty Trust Company of New York ("Morgan") has agreed to pay the
organization expenses of the Fund. The Fund has agreed to reimburse Morgan
for these costs which are being deferred and will be amortized on a
straight-line basis over a period not to exceed five years beginning with
the commencement of operations of the Fund.
e)The Fund 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.
14
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
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.
2. TRANSACTIONS WITH AFFILIATES
a)The Trust, on behalf of the Fund, has retained Funds Distributor, Inc.
("FDI"), a registered broker-dealer, to serve as co-administrator and
distributor. 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 assets to the aggregate net assets of
the Trust and certain other investment companies subject to similar
agreements with FDI. For the six months ended June 30, 1997, the fee for
these services amounted to $44.
b)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 daily based on the aggregate net assets of the
Portfolio and the other portfolios in which the Trust and the JPM Pierpont
Funds invest (the "Master Portfolios") and JPM Series Trust 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, the Master Portfolios, other investors in the Master
Portfolios for which Morgan provides similar services, and JPM Series
Trust. For the six months ended June 30, 1997, the fee for these services
amounted to $417.
In addition, 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
1.25% of the average daily net assets of the Fund through April 30, 1998.
For the six months ended June 30, 1997, Morgan has agreed to reimburse the
Fund $32,798 for expenses under this agreement.
c)The Trust, on behalf of the Fund, has a Shareholder Servicing Agreement
with Morgan to provide account administration and personal and account
maintenance services 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 0.10% of the average daily net assets of
the Fund. For the six months ended June 30, 1997, the fee for these
services amounted to $1,331.
15
<PAGE>
THE JPM INSTITUTIONAL ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
d)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
$47 for the six months ended June 30, 1997.
e)An aggregate annual fee of $75,000 is paid to each Trustee for serving as
a Trustee of The Trust, The JPM Pierpont Funds, the Master Portfolios and
JPM Series Trust. The Trustees' Fees and Expenses shown in the financial
statements represents the Fund's allocated portion of the total fees and
expenses. Prior to April 1, 1997, the aggregate annual Trustee fee was
$65,000. The Trust's Chairman and Chief Executive Officer 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 $10.
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
FEBRUARY 29,
1996
FOR THE (COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) TO
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
---------------- ----------------
<S> <C> <C>
Shares sold 28,663 341,174
Reinvestment of dividends and distributions -- 692
Shares redeemed (190,388) (10,215)
---------------- ----------------
Net Increase (Decrease) (161,725) 331,651
---------------- ----------------
---------------- ----------------
</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 and Portfolio.
4. 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 28, 1997, with unaffiliated lenders. The maximum commitment
borrowing under the Agreement is $150,000,000. The Agreement expires on May 27,
1998, however, the Fund as party to the Agreement will have the ability to
extend the Agreement and continue its participation therein for an additional
364 days. The purpose of the Agreement is to provide another 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 0.065% on the unused portion of the committed amount which is
allocated to the Funds in accordance with procedures established by their
respective Trustees or Directors. The Fund has not borrowed pursuant to the
Agreement as of June 30, 1997.
16
<PAGE>
The Asia Growth Portfolio
Semi-annual Report June 30, 1997
(unaudited)
(The following pages should be read in conjunction
with The JPM Institutional Asia Growth Fund
Semi-annual Financial Statements)
17
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
COMMON STOCK (89.5%)
CHINA (1.9%)
Guangdong Electric Power (Series B) (Electric)... 559,200 $ 458,344
Guangdong Province Expressway Development Ltd.
(Series B) (Construction & Housing)+........... 211,500 133,770
Qingling Motors Co. Ltd. (Series H)
(Automotive)................................... 844,000 435,766
Shandong Huaneng Power Ltd. (ADR) (Electric)..... 58,100 624,575
Shanghai Dajiang Group Co. Ltd. (Series B) (Multi
- Industry).................................... 904,310 279,432
Zhenhai Refining & Chemical Co. Ltd. (Series H)
(Chemicals).................................... 1,207,700 436,483
-------------
2,368,370
-------------
HONG KONG (31.6%)
CDL Hotels International Ltd. (Restaurants &
Hotels)........................................ 1,250,000 508,243
Cheung Kong Holdings Ltd. (Real Estate).......... 543,000 5,361,817
Dickson Concepts International Ltd. (Wholesale &
International Trade)........................... 359,000 1,306,755
Esprit Holdings Ltd. (Retail).................... 2,716,000 1,928,160
First Tractor Co Ltd (Machinery)+................ 234,000 154,041
Hang Seng Bank Ltd. (Banking).................... 62,400 890,016
Henderson Land Development Company Ltd. (Real
Estate)........................................ 351,000 3,114,803
Hong Kong & China Gas Co. Ltd. (Natural Gas)..... 1,292,400 2,585,707
Hong Kong Electric Holdings Ltd. (Electric)...... 544,000 2,190,807
HSBC Holdings PLC (Banking)...................... 51,303 1,542,941
Hutchison Whampoa Ltd. (Multi - Industry)........ 752,000 6,503,443
Jiangsu Expressway Company Ltd.
(Transportation)+.............................. 602,000 213,688
New World Infrastructure Ltd. (Construction &
Housing)+...................................... 341,000 963,938
Silver Grant International Industries Ltd. (Real
Estate)........................................ 1,812,000 947,248
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
HONG KONG (CONTINUED)
Smartone Telecommunications (Telecommunication
Services)+..................................... 719,000 $ 1,633,399
Sun Hung Kai Properties Ltd. (Real Estate)....... 242,000 2,912,828
Swire Pacific Ltd. (Multi - Industry)............ 662,000 5,960,091
Tingyi (Cayman Islands) Holding Co. (Food,
Beverages & Tobacco)........................... 6,798,000 1,693,515
-------------
40,411,440
-------------
INDIA (1.0%)
Ashok Leyland Ltd. (GDR) (Automotive)............ 41,600 269,360
Indian Hotels Company Ltd. (GDR)(144A)
(Restaurants & Hotels)......................... 11,900 282,625
Indian Petrochemicals Corp. Ltd. (GDR)
(Chemicals)+................................... 38,100 533,400
Reliance Industrial Infrastructure Ltd. (GDR)
(Chemicals)+................................... 8,200 188,600
-------------
1,273,985
-------------
INDONESIA (6.0%)
P.T. Bank Bira (Banking)......................... 225,000 330,814
P.T. Bank Pan Indonesia (Banking)................ 714,250 469,998
P.T. Hanjaya Mandala Sampoerna (Food, Beverages &
Tobacco)....................................... 238,000 907,855
P.T. Indorama Synthetics (Textiles).............. 724,000 655,069
P.T. Kawasan Industri Jababeka (Real Estate)..... 307,000 410,343
P.T. Matahari Putra Prima (Retail)............... 489,000 985,441
P.T. Pabrik Kertas Tjiwi Kimia (Metals &
Mining)........................................ 326,868 379,766
P.T. Putra Surya Multidana (Banking)............. 190,000 302,797
P.T. Semen Cibinong (Building Materials)......... 194,000 434,834
P.T. Telekomunikasi Indonesia
(Telecommunications)........................... 954,000 1,559,593
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
18
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
INDONESIA (CONTINUED)
P.T. Tempo Scan Pacific (Pharmaceuticals)........ 280,000 $ 627,596
P.T. United Tractors (Capital Goods)............. 169,000 625,540
-------------
7,689,646
-------------
MALAYSIA (16.9%)
Berjaya Capital Berhad (Financial Services)...... 234,000 333,755
Boustead Holdings Berhad (Multi - Industry)...... 428,000 932,645
Commerce Asset-Holding Berhad (Banking).......... 576,422 1,518,701
DCB Holdings Berhad (Banking).................... 384,000 1,217,114
Diversified Resources Berhad (Automotive)........ 325,000 688,886
Gamuda Berhad (Construction & Housing)........... 41,000 143,760
Guinness Anchor Berhad (Food, Beverages &
Tobacco)....................................... 489,000 1,084,943
Hong Leong Properties Berhad (Real Estate)....... 341,000 387,745
IJM Corporation Berhad (Building Materials)...... 472,000 991,124
Industrial Oxygen Incorporated Berhad
(Agriculture).................................. 690,000 787,320
Konsortium Perkapalan Berhad (Transport &
Services)...................................... 263,000 1,552,573
Lingkaran Trans Kota Holdings Berhad
(Transportation)+.............................. 302,000 628,169
Malakoff Berhad (Agriculture).................... 280,000 1,220,283
Malayan Cement Berhad (Building Materials)....... 574,500 960,533
Malaysian Pacific Industries Berhad (Multi -
Industry)...................................... 268,000 1,167,986
Malaywata Steel Berhad (Metals & Mining)......... 300,000 463,549
Multi-Purpose Holdings Berhad (Multi -
Industry)...................................... 346,000 485,277
Perusahaan Otomobil Nasional Berhad
(Automotive)................................... 210,000 981,773
Petronas Dagangan Berhad (Oil-Services).......... 205,000 487,321
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
MALAYSIA (CONTINUED)
Road Builder (M) Holdings Berhad (Multi -
Industry)...................................... 273,000 $ 1,287,122
Sime Darby Berhad (Multi - Industry)............. 345,000 1,148,176
Sime U.E.P. Properties Berhad (Real Estate)...... 103,000 222,405
Tanjong Co. Berhad (Entertainment, Leisure &
Media)......................................... 281,000 968,580
Telekom Malaysia Berhard (Telecommunications).... 251,000 1,173,453
United Merchant Group Berhad (Financial
Services)...................................... 604,000 837,558
-------------
21,670,751
-------------
PHILIPPINES (6.1%)
Alaska Milk Corp. (Food, Beverages & Tobacco)+... 8,736,300 844,615
Ayala Corp. (Class B) (Multi - Industry)......... 96,125 69,244
Benpres Holdings Corp (GDR) (Multi -
Industry)+..................................... 155,600 1,089,200
C & P Homes, Inc. (Construction & Housing)....... 1,139,000 427,513
Digital Telecom Phils. Inc.
(Telecommunications)........................... 2,848,000 275,341
Engineering & Equipment Corp. (Industrial)....... 4,001,000 166,860
Fil-Estate Land Inc. (Real Estate)............... 295,800 86,353
Filinvest Land Inc. (Building Materials)+........ 3,542,000 886,305
First Philippine Holdings Corp. (Class B) (Multi
- Industry).................................... 538,625 745,367
Ionics Circuit Inc (Electronics)+................ 1,529,650 840,913
La Tondena Distillers Inc. (Food, Beverages &
Tobacco)....................................... 136,000 327,419
Manila Electric Company (Class B) (Electric)..... 9,771 48,159
Metropolitan Bank & Trust Co. (Banking).......... 13,075 277,601
Petron Corp. (Oil-Services)...................... 194,655 49,446
Philippine Commercial International Bank
(Banking)...................................... 54,600 527,866
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
19
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
PHILIPPINES (CONTINUED)
Pryce Properties Corp. (Real Estate)+............ 14,336,775 $ 978,396
Universal Rightfield Property Holdings, Inc.
(Real Estate)+................................. 2,157,000 224,892
-------------
7,865,490
-------------
SINGAPORE (10.4%)
City Developments Ltd. (Real Estate)............. 165,000 1,615,554
DBS Land Ltd. (Real Estate)...................... 102,000 322,439
Development Bank of Singapore Ltd. (Banking)..... 43,000 541,316
Hotel Properties Ltd. (Restaurants & Hotels)..... 428,000 727,377
Kim Eng Holdings Ltd. (Financial Services)....... 757,000 635,311
Osprey Maritime Ltd. (Transport & Services)...... 317,500 415,236
Pacific Century Regional Development (Multi -
Industry)+..................................... 430,000 598,454
Sembawang Maritime Ltd. (Transport & Services)... 365,000 1,143,616
Singapore Airlines Ltd. (Airlines)............... 171,000 1,530,790
Singapore Press Holdings Ltd. (Entertainment,
Leisure & Media)............................... 37,000 745,253
Singapore Telecommunications Ltd.
(Telecommunications)........................... 516,000 952,715
Super Coffeemix Manufacturing Ltd. (Food,
Beverages & Tobacco)........................... 1,078,000 897,171
United Overseas Bank Ltd. (Banking).............. 221,310 2,275,244
Wong's Circuits Holdings Ltd.
(Semiconductors)+.............................. 559,000 939,120
-------------
13,339,596
-------------
SOUTH KOREA (5.2%)
Dae Duck Electronics Co. (Electronics)........... 7,700 485,585
Dong Ah Construction Industrial Co. Ltd.
(Construction & Housing)....................... 7,943 150,273
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
SOUTH KOREA (CONTINUED)
Dongbu Insurance Co. Ltd. (Insurance)+........... 7,310 $ 212,385
Hana Bank (Banking).............................. 21,396 265,040
Hansol Chemical Company Ltd. (Chemicals)......... 20,864 469,910
Hansol Paper Co. Ltd. (GDS) (Forest Products &
Paper)+........................................ 5,037 64,851
Hanwha Chemical Corp. (Chemicals)+............... 43,385 341,999
Hyundai Engineering & Construction Co.
(Construction & Housing)+...................... 81 2,080
Korea Electric Power Corp. (Electric)............ 46,300 1,381,700
Korea Long Term Credit Bank (Banking)............ 22,502 347,159
S.K. Telecom Co. Ltd. (Telecommunications)....... 466 351,339
Korea Zinc Co. Ltd. (Metals & Mining)............ 14,100 325,507
L.G. Information & Communication Ltd.
(Telecommunications-Equipment)................. 2,700 334,459
Pohang Iron & Steel Co. Ltd. (Metals & Mining)... 7,660 779,042
Samsung Electronics Co. Ltd. (GDR represents 1/2
non-voting preferred share) (144A)
(Electronics).................................. 16,610 448,470
Samsung Electronics Co. Ltd. (GDR represents 1/2
voting common share)(144A) (Electronics)+...... 1,442 83,636
Tong Yang Cement Co. (Building Materials)........ 13,000 243,018
Tong Yang Confectionery Co. Ltd. (Food, Beverages
& Tobacco)..................................... 11,800 321,576
-------------
6,608,029
-------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
20
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
TAIWAN (1.3%)
Asia Cement Corp. (GDR) (Building Materials)..... 41,751 $ 671,147
Asustek Computer Inc. (Computer Peripherals)..... 22,600 255,945
China Steel Corp. (GDR) (Metals & Mining)........ 887 18,937
Hocheng Group Corp. (GDR) (144A) (Building
Materials)..................................... 1 8
Microelectronics Technology Inc. (GDS)
(Telecommunications)+.......................... 46,000 368,000
President Enterprises Corp. (GDR) (144A) (Food,
Beverages & Tobacco)+.......................... 14,600 284,700
-------------
1,598,737
-------------
THAILAND (9.1%)
Bangkok Bank Public Co. Ltd. (Banking)........... 302,100 2,075,807
Central Pattana Public Co. Ltd. (Real Estate).... 194,500 270,295
Electricity Generating Public Co. Ltd.
(Electric)..................................... 368,400 903,046
K.R. Precision Public Co. Ltd. (Computer
Peripherals)................................... 98,400 706,520
Krung Thai Bank Public Co. Ltd. (Banking)........ 409,700 430,972
Lanna Lignite Public Co. Ltd. (Metals &
Mining)........................................ 100,700 711,372
Regional Container Line Public Co. Ltd.
(Packaging & Containers)....................... 64,800 385,223
Robinson Department Store Public Co. Ltd.
(Retail)....................................... 424,200 155,565
Sermsuk Public Co. Ltd. (Food, Beverages &
Tobacco)....................................... 10,400 224,821
Shinawatra Computer Public Co. Ltd. (Computer
Systems)....................................... 134,600 930,067
Siam Cement Public Co. Ltd. (Building
Materials)..................................... 57,500 994,402
Siam Commercial Bank Public Co. Ltd. (Banking)... 144,200 590,048
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
THAILAND (CONTINUED)
Swedish Motor Public Co. Ltd. (Capital Goods).... 178,000 $ 98,774
TelecomAsia Corporation Public Co. Ltd.
(Telecommunications)+.......................... 876,200 1,056,987
Thai Farmers Bank Public Co. Ltd. (Banking)...... 383,400 1,628,025
United Communication Industry Public Co. Ltd.
(Telecommunications-Equipment)................. 124,900 515,896
-------------
11,677,820
-------------
TOTAL COMMON STOCK (COST $113,382,791)......... 114,503,864
-------------
CONVERTIBLE PREFERRED STOCKS (0.5%)
PHILIPPINES (0.5%)
Philippine Long Distance Telephone Co. (GDS
represtents 1 Series 2 Convertible Preferred
Share (Telecommunications) (COST $683,225)..... 20,000 700,000
-------------
PREFERRED STOCK (0.1%)
SOUTH KOREA (0.1%)
Shin Won Corp. (Apparels & Textiles) (COST
$235,943)...................................... 12,040 75,928
-------------
RIGHTS (0.1%)
INDONESIA (0.0%)*
P.T. Bank Pan Indonesia, Expiring 8/1/97
(Banking)+..................................... 357,125 51,406
-------------
MALAYSIA (0.0%)*
Commerce Asset-Holding Berhad, Expiring 7/21/97
(Banking)+..................................... 115,284 4,111
-------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
21
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
SINGAPORE (0.1%)
Osprey Maritime Ltd. (Preferred), Expiring
7/24/97 (Transportation)+...................... 171,450 $ 0
Osprey Maritime Ltd., Expiring 7/24/97
(Transportation)+.............................. 317,500 93,261
-------------
93,261
-------------
TOTAL RIGHTS (COST $31,531).................... 148,778
-------------
WARRANTS (0.4%)
MALAYSIA (0.4%)
Commerce Asset-Holding Berhad, Expiring 07/21/97
(Banking)+..................................... 72,052 11,133
Petronas Dagangan Berhad, Expiring 2/24/99
(Retail)+...................................... 412,000 479,904
-------------
491,037
-------------
TOTAL WARRANTS (COST $601,132)................. 491,037
-------------
<CAPTION>
PRINCIPAL
AMOUNT
------------
<S> <C> <C>
CONVERTIBLE BONDS (2.1%)
TAIWAN (1.2%)
Far Eastern Department Stores Ltd., 3.00% due
07/06/01 (Retail).............................. $ 600,000 649,500
Nan Ya Plastics Corp., 1.75% due 07/19/01
(Chemicals).................................... 380,000 543,400
U-Ming Marine Transport Corp., 1.50% due 02/07/01
(Transport & Services)......................... 370,000 303,400
-------------
1,496,300
-------------
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- ------------------------------------------------- ------------ -------------
<S> <C> <C>
THAILAND (0.9%)
Asia Credit Public Co. Ltd., 3.75% due 11/17/03
(Financial Services)........................... $ 1,903,000 $ 1,165,588
-------------
TOTAL CONVERTIBLE BONDS (COST $2,448,585)...... 2,661,888
-------------
SHORT-TERM INVESTMENTS (5.8%)
TIME DEPOSITS--FOREIGN (5.8%)
State Street Bank Cayman Islands, 5.25% due
07/01/97 (cost $7,413,000)..................... 7,413,000 7,413,000
-------------
TOTAL INVESTMENTS (COST $124,796,207) (98.5%)..................
125,994,495
OTHER ASSETS IN EXCESS OF LIABILITIES (1.5%)...................
1,968,278
-------------
NET ASSETS (100.0%)............................................ $ 127,962,773
-------------
-------------
</TABLE>
- ------------------------------
Note: The cost of securities for Federal Income Tax purposes at June 30, 1997,
was $125,766,838, the aggregate gross unrealized appreciation and depreciation
was $14,092,937 and $13,865,280 respectively, resulting in net unrealized
appreciation of $227,657.
+ - Non-income producing security.
ADR - American Depository Receipts.
GDR - Global Depository Receipts.
GDS - Global Depository Shares.
144A - Securities restricted for resale to Qualified Institutional Buyers.
* Less than 0.1%.
The Accompanying Notes are an Integral Part of the Financial Statements.
22
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
PERCENT OF
PORTFOLIO
----------
<S> <C>
Multi-Industry 16.4%
Real Estate 13.1
Banking 12.1
Telecommunications 7.1
Electronics 5.9
Short-term Investments 5.9
Food, Beverages & Tobacco 5.2
Building 4.1
Transportation 3.4
Retail 3.3
Financial Services 2.4
Metals & Mining 2.1
Natural Gas 2.0
Chemicals 2.0
Automotive 1.9
Agriculture 1.6
Computer Peripherals 1.5
Construction & Housing 1.5
Entertainment, Leisure, Media 1.4
Airlines 1.2
Restaurants & Hotels 1.2
Wholesale & International Trade 1.0
Semiconductors 0.8
Capital Goods 0.6
Textiles 0.5
Pharmaceuticals 0.5
Oil Services 0.4
Packaging & Containers 0.3
Insurance 0.2
Industrials 0.1
Machinery 0.1
Apparels & Textiles 0.1
Forest Products & Paper 0.1
----------
100.0%
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
23
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $124,796,207 ) $125,994,495
Foreign Currency at Value (Cost $1,026,743 ) 1,023,653
Cash 173
Receivable for Investments Sold 3,309,601
Unrealized Appreciation of Forward Foreign
Currency Contracts 234,259
Dividends Receivable 139,927
Interest Receivable 71,772
Deferred Organization Expenses 18,448
Prepaid Trustees' Fees 8
Prepaid Expenses and Other Assets 197
------------
Total Assets 130,792,533
------------
LIABILITIES
Payable for Investments Purchased 2,593,495
Custody Fee Payable 100,485
Advisory Fee Payable 82,285
Organization Expenses Payable 5,750
Administrative Services Fee Payable 3,193
Fund Services Fee Payable 107
Administration Fee Payable 319
Accrued Expenses 44,126
------------
Total Liabilities 2,829,760
------------
NET ASSETS
Applicable to Investors' Beneficial Interests $127,962,773
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
24
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend Income (Net of Foreign Withholding Tax
of $173,797) $ 1,306,155
Interest Income 166,236
-----------
Investment Income 1,472,391
EXPENSES
Advisory Fee $ 487,090
Custodian Fees and Expenses 175,546
Professional Fees and Expenses 24,068
Administrative Services Fee 19,066
Printing Expenses 3,864
Amortization of Organization Expenses 3,285
Fund Services Fee 2,056
Administration Fee 1,506
Trustees' Fees and Expenses 1,041
Insurance Expense 233
Miscellaneous 529
-----------
Total Expenses 718,284
-----------
NET INVESTMENT INCOME 754,107
NET REALIZED GAIN (LOSS) ON
Investment Transactions 959,049
Foreign Currency Transactions (40,295)
-----------
Net Realized Gain 918,754
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF
Investments (5,985,942)
Foreign Currency Contracts and Translations 229,684
-----------
Net Change in Unrealized Depreciation (5,756,258)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $(4,083,397)
-----------
-----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
25
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE FISCAL
1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------ -----------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 754,107 $ 1,059,172
Net Realized Gain on Investment and Foreign
Currency Transactions 918,754 4,084,160
Net Change in Unrealized Appreciation
(Depreciation) of Investments and Foreign
Currency Contracts and Translations (5,756,258) 4,768,791
------------ -----------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (4,083,397) 9,912,123
------------ -----------------
------------ -----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 52,693,591 85,257,294
Withdrawals (42,919,975) (59,878,251)
------------ -----------------
Net Increase from Investors' Transactions 9,773,616 25,379,043
------------ -----------------
Total Increase in Net Assets 5,690,219 35,291,166
NET ASSETS
Beginning of Period 122,272,554 86,981,388
------------ -----------------
End of Period $127,962,773 $ 122,272,554
------------ -----------------
------------ -----------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX APRIL 5, 1995
MONTHS ENDED FOR THE (COMMENCEMENT OF
JUNE 30, FISCAL YEAR OPERATIONS) TO
1997 ENDED DECEMBER 31,
(UNAUDITED) DECEMBER 31, 1996 1995
------------ ----------------- ----------------
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 1.18%(a) 1.19% 1.40%(a)
Net Investment Income 1.24%(a) 0.94% 1.18%(a)
Decrease Reflected in Expense Ratio due to
Expense Reimbursement -- 0.01% --
Portfolio Turnover 75% 93% 70%
Average Brokerage Commissions $ 0.0064 $ 0.0069 --
</TABLE>
- ------------------------
(a) Annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
26
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Asia Growth Portfolio (the "Portfolio"), is one of eight subtrusts
(portfolios) comprising The Series Portfolio (the "Series Portfolio"). The
Series Portfolio is registered under the Investment Company Act of 1940, as
amended, as a no load open-end management investment company which was organized
as a trust under the laws of the State of New York on June 24, 1994. The
Portfolio's investment objective is to achieve a high total return from a
portfolio of equity securities of companies in Asian growth markets. The
Portfolio commenced operations on April 5, 1995. The Declaration of Trust
permits the Trustees to issue an unlimited number of beneficial interests in the
Portfolio.
Investments in Asian growth markets may involve certain considerations and risks
not typically associated with investments in the United States. Future economic
and political developments in Asian countries could adversely affect the
liquidity or value, or both, of such securities in which the Portfolio is
invested. The ability of the issuers of debt securities held by the Portfolio to
meet their obligations may be affected by economic and political developments in
a specific industry or region.
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 Portfolio:
a)The value of each security for which readily available market quotations
exists is based on a decision as to the broadest and most representative
market for such security. The value of such security will be based either
on the last sale price on a national securities exchange, or, in the
absence of recorded sales, at the average of readily available closing bid
and asked prices on such exchanges. Securities listed on a foreign
exchange are valued at the last quoted sale price available before the
time when net assets are valued. Unlisted securities are valued at the
average of the quoted bid and asked prices in the over-the-counter market.
Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures
established by the Portfolio's Trustees. Such procedures include the use
of independent pricing services, which use prices based upon yields or
prices of securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. All
portfolio securities with a remaining maturity of less than 60 days are
valued at amortized cost.
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 Portfolio'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 Portfolio's Trustees.
b)The books and records of the Portfolio are maintained in U.S. dollars. The
market values 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
27
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
exchange rate 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 Portfolio are presented at the exchange
rates and market values prevailing at the end of the period, the Portfolio
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. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
d)The Portfolio may enter into forward and spot foreign currency contracts
to protect securities and related receivables against fluctuations in
future foreign currency rates. 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 based on procedures established
by and under the general supervision of the Portfolio's Trustees, and the
change in the market value is recorded by the Portfolio as unrealized
appreciation or depreciation of foreign currency translations. At June 30,
1997, the Portfolio had open forward foreign currency contracts as
follows:
SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
U.S. DOLLAR
VALUE AT UNREALIZED
SALES CONTRACTS PROCEEDS 6/30/97 APPRECIATION
- ------------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Thailand Baht 346,515,000, expiring 11/17/97..... $13,000,000 $12,765,741 $ 234,259
</TABLE>
e)The Portfolio's custodian 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.
f)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be taxed on its
share of the Portfolio's ordinary income and capital gains. It
28
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
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 Portfolio earns foreign
income which may be subject to foreign withholding taxes at various rates.
g)The Portfolio incurred organization expenses in the amount of $33,000.
Morgan Guaranty Trust Company of New York ("Morgan") has agreed to pay
organization expenses of the Portfolio. The Portfolio has agreed to
reimburse Morgan for these costs which are being deferred and will be
amortized on a straight-line basis over a period not to exceed five years
beginning with the commencement of operations of the Portfolio.
h)Expenses incurred by the Series Portfolio with respect to any two or more
portfolios in the Series Portfolio are allocated in proportion to the net
assets of each portfolio in the Series Portfolio, except where allocations
of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that
portfolio.
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an Investment Advisory Agreement with Morgan. Under the
terms of the agreement, the Portfolio pays Morgan at an annual rate of
0.80% of the Portfolio's average daily net assets. For the six months
ended June 30, 1997, such fees amounted to $487,090.
b)The Portfolio has retained Funds Distributor, Inc. ("FDI"), a registered
broker-dealer, to serve as the co-administrator and exclusive placement
agent. Under a Co-Administration Agreement between FDI and the Portfolio,
FDI 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 officers
affiliated with FDI. The Portfolio 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 Portfolio is based on
the ratio of the Portfolio's net assets to the aggregate net assets of The
JPM Pierpont Funds, The JPM Institutional Funds, the Portfolio and the
other portfolios in which The JPM Pierpont Funds and The JPM Institutional
Funds invest (the "Master Portfolios"), JPM Series Trust, JPM Series Trust
II and certain other investment companies subject to similiar agreements
with FDI. For the six months ended June 30, 1997, the fee for these
services amounted to 1,506.
c)The Portfolio 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 Portfolio.
Under the Services Agreement, the Portfolio has agreed to pay Morgan a fee
equal to its allocable share of an annual complex-wide charge. This charge
is calculated daily based on the aggregate net assets of the Master
Portfolios and JPM Series Trust 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 Portfolio is determined by the proportionate
share its net assets
29
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1997
- --------------------------------------------------------------------------------
bear to the net assets of the Master Portfolios, other investors in the
Master Portfolios for which Morgan provides similiar services and JPM
Series Trust. For the six months ended June 30, 1997, the fee for these
services amounted to $19,066.
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 $2,056 for the six months ended June 30, 1997.
e)An aggregate annual fee of $75,000 is paid to each Trustee for serving as
a Trustee of The JPM Pierpont Funds, The JPM Institutional Funds, the
Master Portfolios and JPM Series Trust. The Trustees' Fees and Expenses
shown in the financial statements represent the Portfolio's allocated
portion of the total fees and expenses. Prior to April 1, 1997, the
aggregate annual Trustee Fee was $65,000. The Portfolio's Chairman and
Chief Executive Officer 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 $400.
3. INVESTMENT TRANSACTIONS:
Investment transactions (excluding short-term investments) for the six months
ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
- ---------------------- -----------
<S> <C>
$98,059,790............ $89,075,848
</TABLE>
30
<PAGE>
JPM INSTITUTIONAL PRIME MONEY MARKET FUND
JPM INSTITUTIONAL TAX EXEMPT MONEY MARKET FUND
JPM INSTITUTIONAL TREASURY MONEY MARKET FUND
JPM INSTITUTIONAL FEDERAL MONEY MARKET FUND
JPM INSTITUTIONAL SHORT TERM BOND FUND
JPM INSTITUTIONAL BOND FUND
JPM INSTITUTIONAL TAX EXEMPT BOND FUND
JPM INSTITUTIONAL NEW YORK TOTAL RETURN BOND FUND
JPM INSTITUTIONAL SHARES: CALIFORNIA BOND FUND
JPM INSTITUTIONAL INTERNATIONAL BOND FUND
JPM INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND
JPM INSTITUTIONAL DIVERSIFIED FUND
JPM INSTITUTIONAL U.S. EQUITY FUND
JPM INSTITUTIONAL DISCIPLINED EQUITY FUND
JPM INSTITUTIONAL U.S. SMALL COMPANY FUND
JPM INSTITUTIONAL INTERNATIONAL EQUITY FUND
JPM INSTITUTIONAL INTERNATIONAL OPPORTUNITIES FUND
JPM INSTITUTIONAL EMERGING MARKETS EQUITY FUND
JPM INSTITUTIONAL EUROPEAN EQUITY FUND
JPM INSTITUTIONAL JAPAN EQUITY FUND
JPM INSTITUTIONAL ASIA GROWTH FUN
FOR MORE INFORMATION ON THE JPM INSTITUTIONAL FUNDS, CALL J.P. MORGAN FUNDS
SERVICES AT (800)766-7722.
THE
JPM INSTITUTIONAL
ASIA GROWTH
FUND
SEMI-ANNUAL REPORT
JUNE 30, 1997
