JP MORGAN INSTITUTIONAL FUNDS, 485APOS, 1998-09-16

JP MORGAN INSTITUTIONAL FUNDS
485APOS, 1998-09-16

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As filed with the Securities and Exchange Commission on September 16, 1998.
Registration Nos. 033-54642 and 811-07342

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 55

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 56

J.P. MORGAN INSTITUTIONAL FUNDS
(formerly The JPM Institutional Funds)
(Exact Name of Registrant as Specified in Charter)

60 State Street, Suite 1300, Boston, Massachusetts 02109
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code:
(617) 557-0700

Margaret W. Chambers, c/o Funds Distributor, Inc.
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Name and Address of Agent for Service)

Copy to: Stephen K. West, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[X] on October 30, 1998 pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

The Short Term Bond Portfolio, The U.S. Fixed Income Portfolio, The
Non-U.S. Fixed Income Portfolio, Series Portfolio II, The Tax Exempt Bond
Portfolio and The New York Tax Exempt Bond Portfolio have also executed this
registration statement.

<PAGE>

EXPLANATORY NOTE

This post-effective amendment No. 55 to the registration statement of J.P.
Morgan Institutional Funds (the "Registrant") on Form N-1A is being filed to
update the Registrant's disclosure in the Prospectuses relating to J.P. Morgan
Institutional Short Term Bond, Bond, International Bond, Global Strategic
Income, Tax Exempt Bond and New York Tax Exempt Bond funds (the "Funds"),
separate series of shares of the Registrant, to update information in the
registration statement in order to be in compliance with revised Form N-1A and
plain english prospectus disclosure requirements. As a result, the Amendment
does not affect any of the Registrant's other currently effective prospectuses
for each other series of shares of the Registrant.

<PAGE>

- --------------------------------------------------------------------------------
OCTOBER 30, 1998 Prospectus
- --------------------------------------------------------------------------------

J.P. MORGAN INSTITUTIONAL
FIXED INCOME FUNDS

Short Term Bond Fund

Bond Fund

International Bond Fund

Global Strategic Income Fund

Tax Exempt Bond Fund

New York Tax Exempt Bond Fund

California Bond Fund

------------------------------------
Seeking high total return or current
income by investing primarily in
fixed income securities.

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them as an investment or guarantees that the information in this prospectus is
correct or adequate. It is a criminal offense to state or suggest otherwise.

Distributed by Funds Distributor, Inc.

JP Morgan
<PAGE>

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

Each fund's goal, investment approach,
risks, expenses, and performance

J.P. MORGAN INSTITUTIONAL FIXED INCOME FUNDS

J.P. Morgan Institutional Short Term Bond Fund ................................2

J.P. Morgan Institutional Bond Fund ...........................................4

J.P. Morgan Institutional International Bond Fund .............................6

J.P. Morgan Institutional Global Strategic Income Fund ........................8

J.P. Morgan Institutional Tax Exempt Bond Fund ...............................10

J.P. Morgan Institutional New York Tax Exempt Bond Fund ......................12

J.P. Morgan Institutional California Bond Fund ...............................14

Principles and techniques common
to the funds in this prospectus

FIXED INCOME MANAGEMENT APPROACH

J.P. Morgan ..................................................................16

J.P. Morgan Institutional fixed income funds .................................16

Who may want to invest .......................................................16

The spectrum of fixed income funds ...........................................16

Fixed income investment process ..............................................17

Investing in the J.P. Morgan Institutional
Fixed Income funds

YOUR INVESTMENT

Investing through a financial professional ...................................18

Investing through an employer-sponsored retirement plan ......................18

Investing through an IRA or rollover IRA .....................................18

Investing directly ...........................................................18

Opening your account .........................................................18

Adding to your account .......................................................18

Selling shares ...............................................................19

Account and transaction policies .............................................19

Dividends and distributions ..................................................20

Tax considerations ...........................................................20

More about risk and the funds'
business operations

FUND DETAILS

Business structure ...........................................................21

Management and administration ................................................21

Risk and reward elements .....................................................22

Investments ..................................................................24

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

<PAGE>

J.P. MORGAN INSTITUTIONAL
SHORT TERM BOND FUND TICKER SYMBOL: JMSBX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND)

[GRAPHIC OMITTED] GOAL

The fund's goal is to provide high total return, consistent with low volatility
of principal. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED] INVESTMENT APPROACH

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, domestic and foreign corporate bonds, private placements,
asset-backed and mortgage-related securities, money market instruments, and
others. These securities may be of any maturity, but under normal market
conditions the fund's duration will range between one and three years, similar
to that of the Merrill Lynch 1-3 Year Treasury Index.

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. At least
90% of assets must be invested in securities that, at the time of purchase, are
rated investment-grade (BBB/Baa or better) or are the unrated equivalent,
including at least 75% A or better. No more than 10% of assets may be invested
in securities as low as B.

[GRAPHIC OMITTED] RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
interest rates. How well the fund's performance compares to that of similar
duration fixed income funds will depend on the success of the investment
process, which is described on page 17.

Although any rise in interest rates is likely to cause a fall in the price of
bonds, the fund's comparatively short duration is designed to help keep its
share price within a relatively narrow range. Because it seeks to minimize risk,
the fund will generally offer less income, and during periods of declining
interest rates, may offer lower total returns than bond funds with longer
durations. However, the fund may offer higher total returns than longer duration
funds during periods of rising interest rates. Additionally, because the fund
may invest up to 25% of assets in foreign securities, it takes on additional
risks. The fund's investments and their main risks, as well as fund strategies,
are described in more detail on pages 22-25.

Shares in the fund are not bank deposits and are not guaranteed or insured by
any bank, government entity, or the FDIC. The value of the fund's shares will
fluctuate over time. You could lose money if you sell when the fund's share
price is lower than when you invested.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $______ billion using the same strategy as the
fund.

The portfolio management team is led by Connie J. Plaehn, managing director, who
has been on the team since the fund's inception and has been at J.P. Morgan
since 1984, and William G. Tennille, vice president, who joined the team in
January of 1994 and has been at J.P. Morgan since 1992.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds") , which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.

o The fund does not represent a complete investment program.

2 J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND
<PAGE>

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

PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional Short Term Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past one year and life of the fund compare to those of the Merrill Lynch
1-3 Year Treasury Index. This is a widely recognized, unmanaged index of U.S.
Treasury notes and bonds with maturities of 1-3 years used as a measure of
overall short-term bond market performance.

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

- -----------------------------
Average annual total return % Shows performance over time, for periods
ended December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund1
J.P. Morgan Institutional Short Term Bond Fund
(after expenses) 6.40 5.37
- --------------------------------------------------------------------------------
Merrill Lynch 1-3 Year Treasury Index (no expenses) 6.66 5.60
- --------------------------------------------------------------------------------

- -----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year2
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

1994 1995 1996 1997
---- ---- ---- ----
J.P. Morgan Institutional Short Term Bond Fund 0.36 10.80 5.10 6.40
Merrill Lynch 1-3 Year Treasury Index 0.57 11.00 4.98 6.66

For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was _________% (for the quarter ended ____); and the
lowest quarterly return was ________% (for the quarter ended ______).

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

INVESTOR EXPENSES

The expenses of the fund before reimbursement are shown at right. The fund has
no sales, redemption, exchange, or account fees, although some institutions may
charge you a fee for shares you buy through them. The annual fund expenses after
reimbursement are deducted from fund assets prior to performance calculations.

- --------------------------------------------------------------------------------
Annual fund operating expenses3 (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------

Management fees 0.25

Marketing (12b-1) fees none

Other expenses4 0.81
- --------------------------------------------------------------------------------
Total annual fund
operating expenses4 1.06
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes:
$10,000 initial investment, 5% return each year, total operating expenses
(before reimbursement) unchanged, and all shares sold at the end of each time
period. The example is for comparison only; the fund's actual return and your
actual costs may be higher or lower.

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 108 337 585 1,294
- --------------------------------------------------------------------------------

1 The fund commenced operations on 7/8/93 and returns reflect performance of
the fund from 7/31/93.

2 The fund's fiscal year end is 10/31. For the period 1/1/98 through
6/30/98, the total return for the fund was % and the total return for the
index was %.

3 The fund has a master/feeder structure as described on page 21. This table
is restated to show the fee arrangements to be effective as of 3/1/99, and
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year before reimbursement, expressed as a percentage of
the fund's average net assets.

4 The current fee arrangements, which will expire 2/28/99, limit other
expenses and total operating expenses to 0.00% and 0.25%, respectively.
Effective 3/1/99, after reimbursement, other expenses and total operating
expenses will be 0.10% and 0.35%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.

J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND 3

<PAGE>

J.P. MORGAN INSTITUTIONAL BOND FUND TICKER SYMBOL: JMIBX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN INSTITUTIONAL FUNDS
(J.P. MORGAN INSTITUTIONAL BOND FUND)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide high total return consistent with moderate risk of
capital and maintenance of liquidity. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests primarily in fixed income securities, including U.S. government
and agency securities, corporate bonds, private placements, asset-backed and
mortgage-backed securities, and others. These securities may be of any maturity,
but under normal market conditions the management team will keep the fund's
duration within one year of that of the Salomon Brothers Broad Investment Grade
Bond Index (currently about five years).

Up to 25% of assets may be invested in foreign securities, including 20% in debt
securities denominated in foreign currencies of developed countries. At least
75% of assets must be invested in securities that, at the time of purchase, are
rated investment-grade (BBB/Baa or better) or are the unrated equivalent,
including at least 65% A or better. No more than 25% of assets may be invested
in securities as low as B.

[GRAPHIC OMITTED]

RISK/RETURN SUMMARY

To the extent that the fund seeks higher returns by investing in
non-investment-grade bonds, it takes on additional risks, because these bonds
are more sensitive to economic news and their issuers are in less secure
financial condition. Additionally, because the fund may invest up to 25%of
assets in foreign securities, it takes on additional risks. The fund has the
potential to produce higher returns than the Short Term Bond Fund along with a
share price that is somewhat more volatile. The fund's investments and their
main risks, as well as fund strategies, are described in more detail on pages
22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $_____ billion using the same strategy as the fund.

The portfolio management team is led by William G. Tennille, vice president, who
has been at J.P. Morgan since 1992, and Connie J. Plaehn, managing director, who
has been at J.P. Morgan since 1984. Both have been on the team since January of
1994.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

4 J.P. MORGAN INSTITUTIONAL BOND FUND
<PAGE>

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

PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past one and five years and life of the fund compare to those of the
Salomon Brothers Broad Investment Grade Bond Index. This is a widely recognized,
unmanaged index of U.S. Treasury and agency securities and investment-grade
mortgage and corporate bonds used as a measure of overall bond market
performance.

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

J.P. Morgan Institutional Bond Fund
(after expenses) 9.29 7.41 8.16
- --------------------------------------------------------------------------------
Salomon Brothers Broad Investment Grade
Bond Index (no expenses) 9.62 7.53 x.xx
- --------------------------------------------------------------------------------

- ----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year2
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J.P. Morgan Institutional
Bond Fund 10.23 10.09 13.45 6.53 9.88 (2.68) 18.42 3.30 9.29
- ----------------------------------------------------------------------------------------------------
Salomon Brothers Broad
Investment Grade Bond Index 14.24 8.28 15.78 7.59 9.89 (2.85) 18.55 3.62 9.62
- ----------------------------------------------------------------------------------------------------
</TABLE>

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

INVESTOR EXPENSES

Management fees (actual) 0.30

Marketing (12b-1) fees none

Other expenses4 0.22
- --------------------------------------------------------------------------------
Total annual fund
operating expenses4 0.52
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 53 167 291 653
- --------------------------------------------------------------------------------

1 The fund commenced operations on 7/12/93. Returns for the period 3/31/88
through 7/31/93 reflect performance of The Pierpont Bond Fund, the fund's
predecessor, which commenced operations on 3/11/88.

2 The fund's fiscal year end is 10/31. For the period 1/1/98 through
6/30/98, the total return for the fund was % and the total return for the
index was % .

3 The fund has a master/feeder structure as described on page 21. This table
is restated to show the current fee arrangements in effect as of 8/1/98,
and shows the fund's expenses and its share of master portfolio expenses
for the past fiscal year before reimbusement, expressed as a percentage of
the fund's average net assets.

4 After reimbursement, other expenses and total operating expenses are 0.20%
and 0.50%, respectively. This reimbursement arrangement can be changed or
terminated at any time at the option of J.P. Morgan.

J.P. MORGAN INSTITUTIONAL BOND FUND 5

<PAGE>

J.P. MORGAN INSTITUTIONAL
INTERNATIONAL BOND FUND
- --------------------------------------------------------------------------------
Registrant: J.P. Morgan Institutional Funds
(J.P. Morgan Institutional International Bond Fund)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide high total return, consistent with moderate risk
of capital, by investing in a portfolio of international fixed income
securities. This goal can be changed without shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests primarily in fixed income securities from developed countries
outside the U.S., including those issued by foreign governments, corporations,
financial institutions, and supranational organizations (such as the World
Bank). These securities may be of any maturity, but under normal market
conditions the management team will keep the fund's duration within one year of
that of the Salomon Brothers Non-U.S. World Government Bond Index (currency
hedged) (currently about five years). All of the fund's assets must be invested
in securities that, at the time of purchase, are rated investment-grade (BBB/Baa
or better) or are the unrated equivalent, including at least 65% A or better.

In addition to the investment process described on page 17, the management team
makes country allocation decisions, based primarily on financial and economic
forecasts and other macro-economic factors. The fund generally seeks to reduce
currency risk by hedging its investments back to the U.S. dollar.

[GRAPHIC OMITTED]

RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
international bond markets and interest rates. How well the fund's performance
compares to that of similar fixed income funds will depend on the success of the
investment process.

Because the fund is non-diversified and may invest more than 5% of assets in a
single issuer and its primary securities are foreign securities, it takes on
additional risks. Its performance may vary more widely than that of comparable
funds. The fund has the potential to produce high total return over time, but
investors should be prepared to ride out periods of negative total return. The
fund's investments and their main risks, as well as fund strategies, are
described in more detail on pages 22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

* Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $_____ billion using the same strategy as the fund.

The portfolio management team is led by Dominic J. Pegler, vice president, who
has been on the team since joining J.P. Morgan from the Bank of England in April
of 1996, where he was an economist and later managed UK foreign exchange
reserves, and Maria Ryan, associate, who joined the team in January of 1997 and
has been at J.P. Morgan since 1990.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

6 J.P. MORGAN INSTITUTIONAL INTERNATIONAL BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional International Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past one year and life of the fund compare to those of the Salomon
Brothers Non-U.S. World Government Bond Index (currency hedged). This is a
widely recognized, unmanaged index of government bonds of developed countries
used as a measure of overall international bond market performance.

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

- ---------------------------
Average annual total return Shows performance over time, for periods
ended December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund1

J.P. Morgan Institutional International Bond Fund
(after expenses) 10.78 12.85
- --------------------------------------------------------------------------------
Salomon Brothers Non-U.S. World Government Bond
Index (currency hedged) (no expenses) 11.07 13.17

- -----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year2
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

1995 1996 1997

J.P. Morgan Institutional International 17.40 11.15 10.78
Bond Fund
Salomon Brothers Non-U.S. World Government
Bond Index (currency hedged) 17.94 11.82 11.07

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

INVESTOR EXPENSES

Management fees (actual) 0.35

Marketing (12b-1) fees none

Other expenses4 2.06
- --------------------------------------------------------------------------------
Total annual fund
operating expenses4 2.41
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 244 751 1,285 2,746
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1 The fund commenced operations on 12/1/94 and returns reflect performance
of the fund from 12/31/94.

2 The fund's fiscal year end is 9/30. For the period 1/1/98 through 6/30/98,
the total return for the fund was % and the total return for the index
was %.

3 The fund has a master/feeder structure as described on page 21. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal year before reimbursement, expressed as a percentage of
the fund's average net assets.

4 After reimbursement, other expenses and total operating expenses for the
past fiscal year were 0.30% and 0.65%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.

J.P. MORGAN INSTITUTIONAL INTERNATIONAL BOND FUND 7

<PAGE>

J.P. MORGAN INSTITUTIONAL
GLOBAL STRATEGIC INCOME FUND ticker symbol: JPGSX
- --------------------------------------------------------------------------------
Registrant: J.P. Morgan Institutional Funds
(J.P. Morgan Institutional Global Strategic
Income Fund)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide high total return from a portfolio of fixed income
securities of foreign and domestic issuers. This goal can be changed without
shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests in a wide range of debt securities from the U.S. and other
markets, both developed and emerging. Issuers may include governments,
corporations, financial institutions, and supranational organizations (such as
the World Bank). The fund may invest directly in mortgages and in
mortgage-backed securities. The fund's securities may be of any maturity, but
under normal market conditions the fund's duration will generally be similar to
that of the Lehman Brothers Aggregate Bond Index (currently about four and a
half years). At least 40% of assets must be invested in securities that, at the
time of purchase, are rated investment-grade (BBB/Baa or better) or are the
unrated equivalent. No more than 25% of assets may be invested in non-investment
grade or unrated securities. The balance of assets may be invested in securities
as low as B.

The management team uses the process described on page 17, and also makes
country allocations, based primarily on macro-economic factors. With regard to
sector allocation, the team uses the model allocation shown at right as a basis,
although the actual allocations are adjusted periodically within the ranges
indicated. Within each sector, a dedicated team handles securities selection.
The fund typically hedges its non-dollar denominated investments back to the
U.S. dollar.

[GRAPHIC OMITTED]

RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
global bond markets, interest rates, and currency exchange rates. How well the
fund's performance compares to that of similar fixed income funds will depend on
the success of the investment process. Because of low credit and foreign and
emerging markets investment risks, the fund's performance is likely to be more
volatile than that of most fixed income funds. The fund's mortgage-backed
investments involve the risk of losses due to default or to prepayments that
occur earlier or later than expected. Some investments, including directly owned
mortgages, may be illiquid. The fund has the potential for long-term total
returns that exceed those of more traditional bond funds, but investors should
also be prepared for risks that exceed those of more traditional bond funds. The
fund's investments and their main risks, as well as fund strategies, are
described in more detail on pages 22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

Model Sector Allocation

[The following table was depicted as a bar chart in the printed material]

- --------------------------------------------------------------------------------
public/private
corporates
(range 5-25%) 15%
- --------------------------------------------------------------------------------
high yield
corporates
(range 13-33%) 23%
- --------------------------------------------------------------------------------
emerging
markets
(range 5-25%) 15%
- --------------------------------------------------------------------------------
international
non-dollar
(range 0-25%) 12%
- --------------------------------------------------------------------------------
public/private
mortgages
(range 20-45%) 35%
- --------------------------------------------------------------------------------

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $______ billion using the same strategy as the
fund.

The portfolio management team is led by Gerard W. Lillis, managing director, who
has been at J.P. Morgan since 1978, and Mark E. Smith, managing director, who
joined J.P. Morgan in 1994 from Allied Signal, Inc. where he managed fixed
income portfolios and oversaw asset allocation activities across asset classes.
Both have been on the team since the fund's inception.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund does not represent a complete investment program.

8 J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND
<PAGE>

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

- --------------------------------------------------------------------------------
Annual fund operating expenses1 (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------

Management fees (actual) 0.45

Marketing (12b-1) fees none

Other expenses2 0.73
- --------------------------------------------------------------------------------
Total annual fund
operating expenses2 1.18
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 120 375 649 1,432
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1 The fund has a master/feeder structure as described on page 21. This table
shows the fund's expenses and its share of master portfolio expenses for
the past fiscal period before reimbursement, expressed as a percentage of
the fund's average net assets.

2 After reimbursement, other expenses and total operating expenses for the
past fiscal period were 0.20% and 0.65%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.

J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND 9
<PAGE>

J.P. MORGAN INSTITUTIONAL
TAX EXEMPT BOND FUND ticker symbol: JITBX
- --------------------------------------------------------------------------------
Registrant: J.P. Morgan Institutional Funds
(J.P. Morgan Institutional Tax Exempt Bond Fund)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide high current income that is exempt from federal
income tax and consistent with moderate risk of capital. This goal can be
changed without shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests primarily in high quality municipal securities whose income is
free from federal personal income tax. While the fund's goal is high tax-exempt
income, the fund may invest to a limited extent in taxable securities, including
U.S. government, government agency, corporate, or taxable municipal securities.
The fund's securities may be of any maturity, but under normal market conditions
the fund's duration will generally range between four and seven years, similar
to that of the Lehman Brothers 1-16 Year Municipal Bond Index. At least 90% of
assets must be invested in securities that, at the time of purchase, are rated
investment-grade (BBB/Baa or better) or are the unrated equivalent. No more than
10% of assets may be invested in securities as low as B.

[GRAPHIC OMITTED] RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
interest rates. How well the fund's performance compares to that of similar
tax-exempt funds will depend on the success of the investment process, which is
described on page 17.

Investors should expect the potential for returns that exceed those of a
comparable tax-exempt fund of shorter duration, and should be prepared for
higher share price volatility than such a fund. The fund's performance could
also be affected by market reaction to proposed tax legislation. The fund's
investments and their main risks, as well as fund strategies, are described in
more detail on pages 22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $_______ billion using the same strategy as the
fund.

The portfolio management team is led by Robert W. Meiselas, vice president, who
joined the team in May of 1997 and has been at J.P. Morgan since 1987, and
Elaine B. Young, vice president, who joined the team in January of 1996 and has
been at J.P. Morgan since August of 1994. Prior to joining J.P. Morgan, Ms.
Young was a municipal bond trader and fixed income portfolio manager at Scudder,
Stevens, & Clark, Inc.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds") and emerging markets debt, which offer higher potential yields but
have a higher risk of default and are more sensitive to market risk than
investment-grade bonds.

o The fund does not represent a complete investment program.

10 J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND
<PAGE>

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PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional Tax Exempt Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past one, five and ten years and life of the fund compare to those of
the Lehman Brothers 1-16 Year Municipal Bond Index. This is a widely recognized,
unmanaged index of general obligation and revenue bonds with maturities of 1-16
years used as a measure of overall tax-exempt bond market performance.1

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

- -------------------------------
Average annual total return (%) Shows performance over time, for periods
ended December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr. Past 5 yrs. Past 10 yrs. Life of fund2
J.P. Morgan Institutional
Tax Exempt Bond Fund
(after expenses) 7.58 6.23 7.19 x.xx
- --------------------------------------------------------------------------------
Lehman Brothers Quality
Intermediate Municipal
Bond Index (no expenses) x.xx x.xx x.xx x.xx
- --------------------------------------------------------------------------------
Lehman Brothers 1-16 Year
Municipal Bond Index
(no expenses) x.xx x.xx x.xx x.xx
- --------------------------------------------------------------------------------

- -----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year3
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
J.P. Morgan Institutional
Tax Exempt Bond Fund 7.38 8.25 6.87 10.92 7.47 9.58 (2.53) 13.50 3.71 7.58
- --------------------------------------------------------------------------------------------------------
Lehman Brothers 1-16 Year
Municipal Bond Index 5.80 9.62 7.48 11.66 8.25 10.71 (2.74) 13.80 4.27 7.80
</TABLE>

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INVESTOR EXPENSES

- --------------------------------------------------------------------------------
Annual fund operating expenses4 (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------

Management fees (actual) 0.30

Marketing (12b-1) fees none

Other expenses5 0.28
- --------------------------------------------------------------------------------
Total annual fund
operating expenses5 0.58
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.

Your cost($) 59 186 324 786
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1 The fund's benchmark changed from the Lehman Brothers Quality Intermediate
Municipal Bond Index, a widely recognized, unmanaged index of general
obligation and and revenue bonds rated A or better with maturities of 2-12
years, to the Lehman Brothers 1-16 Year Municipal Bond Index on 5/1/97
because this index provided a broader mix of municipal securities and
included municipal securities rated below A.

2 The fund commenced operations on 7/12/93. For the period 11/1/88 through
7/31/93 returns reflect performance of The Pierpont Tax Exempt Bond Fund,
the predecessor of the fund, which commenced operations on 10/3/84.

3 The fund's fiscal year end is 8/31. For the period 1/1/98 through 6/30/98,
the total return for the fund was % and the total return for the index
was %.

4 The fund has a master/feeder structure as described on page 21. This table
is restated to show the current fee arrangements in effect as of 8/1/98,
and shows the fund's expenses and its share of master portfolio expenses
for the past fiscal year before reimbursement, expressed as a percentage
of the fund's average net assets.

5 After reimbursement, other expenses and total operating expenses are 0.20%
and 0.50%, respectively. This reimbursement arrangement can be changed or
terminated at any time at the option of J.P. Morgan.

J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND 11

<PAGE>

J.P. MORGAN INSTITUTIONAL NEW YORK
TAX EXEMPT BOND FUND ticker symbol: jpntx
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Registrant: J.P. Morgan Institutional Funds
(J.P. Morgan Institutional New York tax
exempt Bond Fund)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide a high level of tax exempt income for New York
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests primarily in New York municipal securities whose income is free
from federal, state, and New York City personal income taxes for New York
residents. The fund may also invest to a limited extent in securities of other
states or territories. To the extent that the fund invests in municipal
securities of other states, the income from such securities would be free from
federal personal income taxes for New York residents but would be subject to New
York state and New York City personal income taxes. For non-New York residents,
the income from New York municipal securities is free from federal personal
income taxes only. The fund may also invest in taxable securities. The fund's
securities may be of any maturity, but under normal market conditions the fund's
duration will generally range between three and seven years, similar to that of
the Lehman Brothers 1-16 Year Municipal Bond Index. At least 90% of assets must
be invested in securities that, at the time of purchase, are rated
investment-grade (BBB/Baa or better) or are the unrated equivalent. No more than
10% of assets may be invested in securities as low as B.

[GRAPHIC OMITTED]

RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
interest rates. How well the fund's performance compares to that of similar
fixed income funds will depend on the success of the investment process, which
is described on page 17. Because most of the fund's investments will typically
be from issuers in the State of New York, its performance will be affected by
the fiscal and economic health of that state and its municipalities. The fund is
non-diversified and may invest more than 5% of assets in a single issuer, which
could further concentrate its risks. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, it takes on additional
risks, since these bonds are more sensitive to economic news and their issuers
have a less secure financial condition. The fund's investments and their main
risks, as well as fund strategies, are described in more detail on pages 22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT The fund's assets are managed by J.P. Morgan, which
currently manages over $300 billion, including more than $8 billion using the
same strategy as the fund.

The portfolio management team is led by Robert W. Meiselas, vice president, who
has been at J.P. Morgan since 1987, and Elaine B. Young, vice president, who
joined J.P. Morgan from Scudder, Stevens & Clark, Inc. in 1994 where she was a
municipal bond trader and fixed income portfolio manager. Both have been on the
team since June of 1997.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds"), which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.

o The fund does not represent a complete investment program.

12 J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND
<PAGE>

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

PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional New York Tax Exempt Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past year and the life of the fund compare to those of the Lehman
Brothers 1-16 Year Municipal Bond Index. This is a widely recognized, unmanaged
index of general obligation and revenue bonds with maturities of 1-16 years used
as a measure of overall tax-exempt bond market performance.1

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

- -------------------------------
Average annual total return (%) Shows performance over time, for periods
ended December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr. Life of fund2
J.P. Morgan Institutional New York Tax Exempt
Bond Fund (after expenses) 7.68 6.91
- --------------------------------------------------------------------------------
Lehman Brothers New York 1-15 Year Municipal
Bond Index (no expenses) 8.73 7.73
Lehman Brothers 1-16 Year Municipal Bond
Index (no expenses) 7.97 7.29
- --------------------------------------------------------------------------------

- -----------------------------
Year-by-year total return (%) Shows changes in returns by calendar year3
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

1995 1996 1997

J.P. Morgan Institutional New York Tax Exempt Bond Fund 13.28 4.21 7.68
Lehman Brothers New York 1-15 Year Municipal Bond Index 14.69 4.93 8.73
Lehman Brothers 1-16 Year Municipal Bond Index 7.97

For the period covered by this year-by-year total return chart, the fund's
highest quarterly return was 4.80% (for the quarter ended 3/31/95) and the
lowest quarterly return was -0.59% (for the quarter ended 3/31/96).

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

Management fees 0.30

Marketing (12b-1) fees none

Other expenses5 0.32
- --------------------------------------------------------------------------------
Total annual fund
operating expenses5 0.62
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 63 199 346 774
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1 The fund's benchmark changed from the Lehman Brothers New York 1-15 Year
Municipal Bond Index, a widely recognized, unmanaged index of New York
general obligation and revenue bonds with maturities of 1-15 years, to the
Lehman Brothers 1-16 Year Municipal Bond Index on 5/1/97 because this
index provided a broader mix of municipal securities and was not
concentrated in New York City bonds.

2 The fund commenced operations on 4/11/94, and returns reflect performance
of the fund from 4/30/94.

3 The fund's fiscal year end is 3/31. For the period 1/1/98 through 6/30/98,
the total return for the fund was 2.01% and the total return for the index
was 2.50%.

5 After reimbursement, other expenses and total operating expenses for the
past fiscal year were 0.20% and 0.50%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.

J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND 13

<PAGE>

J.P. MORGAN INSTITUTIONAL
CALIFORNIA BOND FUND ticker symbol: JPICX
- --------------------------------------------------------------------------------
Registrant: J.p. Morgan Series Trust
(J.P. Morgan California Bond Fund:
Institutional shares)

[GRAPHIC OMITTED]

GOAL

The fund's goal is to provide high after-tax total return for California
residents consistent with moderate risk of capital. This goal can be changed
without shareholder approval.

[GRAPHIC OMITTED]

INVESTMENT APPROACH

The fund invests primarily in California municipal securities whose income is
free from federal and state personal income taxes for California residents.
Because the fund's goal is high after-tax total return rather than high
tax-exempt income, the fund may invest to a limited extent in securities of
other states or territories. To the extent that the fund invests in municipal
securities of other states, the income from such securities would be free from
federal personal income taxes for California residents but would be subject to
California state personal income taxes. For non-California residents, the income
from California municipal securities is free from federal personal income taxes
only. The fund may also invest in taxable securities. The fund's securities may
be of any maturity, but under normal market conditions the fund's duration will
generally range between three and ten years, similar to that of the Lehman
Brothers 1-16 Year Municipal Bond Index. At least 90% of assets must be invested
in securities that, at the time of purchase, are rated investment-grade (BBB/Baa
or better) or are the unrated equivalent. No more than 10% of assets may be
invested in securities as low as B.

[GRAPHIC OMITTED]

RISK/RETURN SUMMARY

The fund's share price and total return will vary in response to changes in
interest rates. How well the fund's performance compares to that of similar
fixed income funds will depend on the success of the investment process, which
is described on page 17. Because most of the fund's investments will typically
be from issuers in the State of California, its performance will be affected by
the fiscal and economic health of that state and its municipalities. The fund is
non-diversified and may invest more than 5% of assets in a single issuer, which
could further concentrate its risks. To the extent that the fund seeks higher
returns by investing in non-investment-grade bonds, it takes on additional
risks, because these bonds are more sensitive to economic news and their issuers
are in less secure financial condition. The fund's investments and their main
risks, as well as fund strategies, are described in more detail on pages 22-25.

POTENTIAL RISK AND RETURN

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages over $300
billion, including more than $8 billion using the same strategy as the fund.

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

Before you invest

Investors considering the fund should understand that:

o There is no assurance that the fund will meet its investment goal.

o The fund invests a portion of assets in non-investment-grade bonds ("junk
bonds"), which offer higher potential yields but have a higher risk of
default and are more sensitive to market risk than investment-grade bonds.

o The fund does not represent a complete investment program.

14 J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

The table and bar chart shown below indicate the risks of investing in J.P.
Morgan Institutional California Bond Fund.

The table indicates the risks by showing how the fund's average annual returns
for the past year compare to those of the Lehman Brothers 1-16 Year Municipal
Bond Index. This is a widely recognized, unmanaged index of general obligation
and revenue bonds with maturities of 1-16 years used as a measure of overall
tax-exempt bond market performance.

The bar chart indicates the risks by showing changes in the performance of the
fund's shares from year to year since the fund's inception date.

The fund's past performance does not necessarily indicate how the fund will
perform in the future.

- -------------------------------
Average annual total return (%) Shows performance over time, for period
ended December 31, 1997
- --------------------------------------------------------------------------------
Past 1 yr.
J.P. Morgan Institutional California Bond Fund (after expenses) 7.72
- --------------------------------------------------------------------------------
Lehman Brothers 1-16 Year Municipal Bond Index (no expenses) 7.97
- --------------------------------------------------------------------------------

- -------------------------------
Total return (%) Shows changes in returns by calendar year1
- --------------------------------------------------------------------------------

[The following table was depicted as a bar chart in the printed material]

1997
J.P. Morgan Institutional California Bond Fund 7.72
Lehman Brothers 1-16 Year Municipal Bond Index 7.97

For the period covered by this total return chart, the fund's highest quarterly
return was 3.04% (for the quarter ended 6/30/97) and the lowest quarterly return
was -0.34% (for the quarter ended 3/31/97).

INVESTOR EXPENSES

- --------------------------------------------------------------------------------
Annual fund operating expenses2 (%)
(expenses that are deducted from fund assets)
- --------------------------------------------------------------------------------

Management fees 0.30

Marketing (12b-1) fees none

Other expenses3 0.54
- --------------------------------------------------------------------------------
Total annual fund
operating expenses3 0.84
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Expense example
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 86 268 466 1,037
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1 The fund's fiscal year end is 4/30. For the period 1/1/98 through 6/30/98,
the total return for the fund was 1.66% and the total return for the index
was 2.50%.

2 This table is restated to show the current fee arrangements in effect as
of 8/1/98, and shows expenses for the past fiscal year before
reimbursement, expressed as a percentage of average net assets.

3 Effective 8/1/98, after reimbursement, other expenses and total operating
expenses will are 0.20% and 0.50%, respectively. This reimbursement
arrangement can be changed or terminated at any time at the option of J.P.
Morgan.

J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND 15

<PAGE>

FIXED INCOME MANAGEMENT APPROACH
- --------------------------------------------------------------------------------

J.P. MORGAN

Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan is the asset management choice for many of the world's
most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan employs over 300 analysts and portfolio managers
around the world and has more than $300 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.

J.P. MORGAN INSTITUTIONAL FIXED INCOME FUNDS

These funds invest primarily in bonds and other fixed income securities, either
directly or through a master portfolio (another fund with the same goal). The
funds seek high total return or high current income.

While each fund follows its own strategy, the funds as a group share a single
investment philosophy. This philosophy, developed by the funds' advisor,
emphasizes the potential for consistently enhancing performance while managing
risk.

THE SPECTRUM OF FIXED INCOME FUNDS

The funds described in this prospectus pursue different goals and offer varying
degrees of risk and potential reward. The table below shows degrees of the
relative risk and return that these funds potentially offer. These and other
distinguishing features of each fixed income fund were described on the
preceding pages. Differences among these funds include:

o the types of securities they hold
o the tax status of the income they offer
o the relative emphasis on current income versus total return

- --------------------------------------------------------------------------------
Potential risk and return
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

The positions of the funds in this graph reflect long-term performance goals
only, and are relative, not absolute.

*Based on tax-equivalent returns for an investor in the highest income tax
bracket.

- --------------------------------------------------------------------------------
Who May Want to Invest The funds are designed for investors who:

o want to add an income investment to further diversify a portfolio

o want an investment whose risk/return potential is higher than that of
money market funds but generally less than that of stock funds

o want an investment that pays monthly dividends

o with regard to the Tax Exempt Bond Fund, are seeking income that is exempt
from federal personal income tax

o with regard to the state-specific funds, are seeking income that is exempt
from federal, state, and local (if applicable) personal income taxes in
New York or California

The funds are not designed for investors who:

o are investing for aggressive long-term growth

o require stability of principal

o with regard to the Global Strategic Income Fund, are not prepared to
accept a higher degree of risk than most traditional bond funds

o with regard to the federal or state tax-exempt funds, are investing
through a tax-deferred account such as an IRA

16 FIXED INCOME MANAGEMENT APPROACH
<PAGE>

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

FIXED INCOME INVESTMENT PROCESS

J.P. Morgan seeks to generate an information advantage through the depth of its
global fixed-income research and the sophistication of its analytical systems.
Using a team-oriented approach, J.P. Morgan seeks to gain insights in a broad
range of distinct areas and takes positions in many different ones, helping the
funds to limit exposure to concentrated sources of risk.

In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process that combines sector allocation, fundamental research for
identifying portfolio securities, and duration management.

[GRAPHIC OMITTED]
The funds invest across a range of
different types of securities

Sector allocation The sector allocation team meets monthly, analyzing the
fundamentals of a broad range of sectors in which a fund may invest. The team
seeks to enhance performance and manage risk by underweighting or overweighting
sectors.

[GRAPHIC OMITTED]
Each fund makes its portfolio decisions
as described earlier in this prospectus

Security selection Relying on the insights of different specialists, including
credit analysts, quantitative researchers, and dedicated fixed income traders,
the portfolio managers make buy and sell decisions according to each fund's goal
and strategy.

[GRAPHIC OMITTED]
J.P. Morgan uses a disciplined process
to control each fund's sensitivity
to interest rates

Duration management Forecasting teams use fundamental economic factors to
develop strategic forecasts of the direction of interest rates. Based on these
forecasts, strategists establish each fund's target duration (a measure of
average weighted maturity of the securities held by a fund and a common
measurement of sensitivity to interest rate movements), typically remaining
relatively close to the duration of the market as a whole, as represented by the
fund's benchmark. The strategists closely monitor the funds and make tactical
adjustments as necessary.

FIXED INCOME MANAGEMENT APPROACH 17
<PAGE>

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

For your convenience, the J.P. Morgan Institutional Funds offer several ways to
start and add to fund investments.

INVESTING THROUGH A FINANCIAL PROFESSIONAL

If you work with a financial professional, either at J.P. Morgan or elsewhere,
he or she is prepared to handle your planning and transaction needs. Your
financial professional will be able to assist you in establishing your fund
account, executing transactions, and monitoring your investment. If your fund
investment is not held in the name of your financial professional and you prefer
to place a transaction order yourself, please use the instructions for investing
directly.

INVESTING THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Choose a fund (or funds) and determine the amount you are investing. The
minimum amount for initial investments is $5,000,000 for the Short Term
Bond, Bond, Tax Exempt Bond, New York Total Return Bond and California
Bond funds and $1,000,000 for the Global Strategic Income and
International Bond funds and for additional investments $25,000, although
these minimums may be less for some investors. For more information on
minimum investments, call 1-800-766-7722.

o Complete the application, indicating how much of your investment you want
to allocate to which fund(s). Please apply now for any account privileges
you may want to use in the future, in order to avoid the delays associated
with adding them later on.

o Mail in your application, making your initial investment as shown at
right.

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

Opening Your account

By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to
place a purchase order. Funds that are wired without a purchase order will
be returned uninvested.

o After placing your purchase order, instruct your bank to wire the amount
of your investment to:

Morgan Guaranty Trust Company of New York
Routing number: 021-000-238
Credit: J.P. Morgan Institutional Funds
Account number: 001-57-689
FFC: your account number, name of registered owner(s) and fund name

By check

o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.

o Mail the check with your completed application to the Shareholder Services
Agent.

By exchange

o Call the Shareholder Services Agent to effect an exchange.

Adding to YOUR account

By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that
are wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above.

By check

o Make out a check for the investment amount payable to J.P. Morgan
Institutional Funds.

o Mail the check with a completed investment slip to the Shareholder
Services Agent. If you do not have an investment slip, attach a note
indicating your account number and how much you wish to invest in which
fund(s).

By exchange

o Call the Shareholder Services Agent to effect an exchange.

18 YOUR INVESTMENT
<PAGE>

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

Selling shares

By phone -- wire payment

o Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can
help you add it.

o Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your
fund account.

By phone -- check payment

o Call the Shareholder Services Agent and place your request. Once your
request has been verified, a check for the net amount, payable to the
registered owner(s), will be mailed to the address of record. For checks
payable to any other party or mailed to any other address, please make
your request in writing (see below).

In writing

o Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the
fund name; the amount you want to sell; and the recipient's name and
address or wire information, if different from those of the account
registration.

o Indicate whether you want the proceeds sent by check or by wire.

o Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.

o Mail the letter to the Shareholder Services Agent.

By exchange

o Call the Shareholder Services Agent to effect an exchange.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan Institutional or J.P. Morgan mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that for tax purposes an exchange
is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business hours and NAV calculations The funds' regular business days and hours
are the same as those of the New York Stock Exchange (NYSE). Each fund
calculates its net asset value per share (NAV) every business day as of the
close of trading on the NYSE (normally 4:00 p.m. eastern time). Each fund's
securities are typically priced using pricing services or market quotes, but may
be priced using fair value pricing when these methods are not readily available.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Orders are accepted until the
close of trading on the NYSE every business day and are executed the same day,
at that day's NAV. A fund has the right to suspend redemption of shares and to
postpone payment of proceeds for up to seven days or as permitted by law.

- --------------------------------------------------------------------------------
Shareholder Services Agent
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036
1-800-766-7722

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

YOUR INVESTMENT 19
<PAGE>

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

Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment, generally the day following execution. When
you sell shares, proceeds are generally available the day following execution
and will be forwarded according to your instructions.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

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

DIVIDENDS and distributions

Income dividends are typically declared daily and paid monthly. If an investor's
shares are redeemed during the month, accrued but unpaid dividends are paid with
the redemption proceeds. Shares of a fund earn dividends on the business day the
purchase is effective, but not on the business day the redemption is effective.
Each fund distributes capital gains, if any, once a year. However, a fund may
make more or fewer payments in a given year, depending on its investment results
and its tax compliance situation. Each fund's dividends and distributions
consist of most or all of its net investment income and net realized capital
gains.

Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Institutional Fund.

TAX CONSIDERATIONS

In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. These transactions
typically create the following tax liabilities for taxable accounts:

- --------------------------------------------------------------------------------
Transaction Tax status

Income dividends from the Exempt from federal, state,
New York Tax Exempt Bond and New York City personal
Fund income taxes for New York
residents only
- --------------------------------------------------------------------------------
Income dividends from the Exempt from federal and state
California Bond Fund personal income taxes for
California residents only
- --------------------------------------------------------------------------------
Income dividends from the Exempt from federal personal
Tax Exempt Bond Fund income taxes
- --------------------------------------------------------------------------------
Income dividends from Ordinary income
all other funds
- --------------------------------------------------------------------------------
Short-term capital gains Ordinary income
distributions
- --------------------------------------------------------------------------------
Long-term capital gains Capital gains
distributions
- --------------------------------------------------------------------------------
Sales or exchanges of Capital gains or
shares owned for more losses
than one year
- --------------------------------------------------------------------------------
Sales or exchanges of Gains are treated as ordinary
shares owned for one year income; losses are subject
or less to special rules

Because long-term capital gains distributions are taxable as capital gains
regardless of how long you have owned your shares, you may want to avoid making
a substantial investment when a fund is about to declare a long-term capital
gains distribution. A portion of the Tax Exempt Bond, New York Tax Exempt Bond
and California Bond funds' returns may be subject to federal, state, or local
tax, or the alternative minimum tax. Every January, each fund issues tax
information on its distributions for the previous year. Any investor for whom a
fund does not have a valid taxpayer identification number will be subject to
backup withholding for taxes. The tax considerations described in this section
do not apply to tax-deferred accounts or other non-taxable entities. Because
each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.

20 YOUR INVESTMENT
<PAGE>

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

Business Structure

As noted earlier, each fund (except the California Bond Fund) is a "feeder" fund
that invests in a master portfolio. (Except where indicated, this prospectus
uses the term "the fund" to mean the feeder fund and its master portfolio taken
together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses, and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-766-7722. Generally, when a master
portfolio seeks a vote, each of its feeder funds will hold a shareholder meeting
and cast its vote proportionately, as instructed by its shareholders. Fund
shareholders are entitled to one full or fractional vote for each dollar or
fraction of a dollar invested.

Each feeder fund and its master portfolio expect to maintain consistent goals,
but if they do not, the feeder fund will withdraw from the master portfolio,
receiving its assets either in cash or securities. Each feeder fund's trustees
would then consider whether it should hire its own investment adviser, invest in
a different master portfolio, or take other action.

The California Bond Fund is a series of J.P. Morgan Series Trust, a
Massachusetts business trust. Information about other series or classes is
available by calling 1-800-766-7722. In the future, the trustees could create
other series or share classes, which would have different expenses.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus, their corresponding master
portfolios, and J.P. Morgan Series Trust are all governed by the same trustees.
The trustees are responsible for overseeing all business activities. The
trustees are assisted by Pierpont Group, Inc., which they own and operate on a
cost basis; costs are shared by all funds governed by these trustees. Funds
Distributor, Inc., as co-administrator, along with J.P. Morgan, provides fund
officers. J.P. Morgan, as co-administrator, oversees each fund's other service
providers

J.P. Morgan, subject to the expense reimbursements described earlier in this
prospectus, receives the following fees for investment advisory and other
services:

- --------------------------------------------------------------------------------
Advisory services Percentage of the master
portfolio's average net assets
- --------------------------------------------------------------------------------
Short Term Bond 0.25%
- --------------------------------------------------------------------------------
Bond 0.30%
- --------------------------------------------------------------------------------
International Bond 0.35%
- --------------------------------------------------------------------------------
Global Strategic Income 0.45%
- --------------------------------------------------------------------------------
Tax Exempt Bond 0.30%
- --------------------------------------------------------------------------------
New York Tax Exempt Bond 0.30%
- --------------------------------------------------------------------------------
Administrative services Master portfolio's and fund's pro-
(fee shared with Funds rata portions of 0.09% of
the Distributor, Inc.) first $7 billion in J.P. Morgan-
advised portfolios, plus 0.04% of
average net assets over $7 billion
- --------------------------------------------------------------------------------
Shareholder services 0.10% of the fund's average
net assets
- --------------------------------------------------------------------------------
The California Bond Fund, subject to the expense reimbursements described
earlier in this prospectus, pays J.P. Morgan the following fees for investment
advisory and other services:
- --------------------------------------------------------------------------------
Advisory services 0.30% of each fund's average
net assets
- --------------------------------------------------------------------------------
Administrative services Fund's pro-rata portion of
(fee shared with Funds 0.09% of the first $7 billion
Distributor, Inc.) in J.P. Morgan-advised portfolios,
plus 0.04% of average net
assets over $7 billion
- --------------------------------------------------------------------------------
Shareholder services 0.10% of the fund's average
net assets
- --------------------------------------------------------------------------------

J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.

Year 2000

Fund operations and shareholders could be adversely affected if the computer
systems used by J.P. Morgan, the funds' other service providers and other
entities with computer systems linked to the funds, do not properly process and
calculate January 1, 2000 and after date-related information. J.P. Morgan is
working to avoid these problems and to obtain assurances from other service
providers that they are taking similar steps. However, it is not certain that
these actions will be sufficient to prevent January 1, 2000 and after
date-related problems from adversely impacting fund operations and shareholders.
In addition, to the extent that operations of issuers of securities held by the
funds are impaired by date-related problems or prices of securities decline as a
result of real or perceived date-related problems of issuers held by the funds
or generally, the net asset value of the funds will decline.

FUND DETAILS 21
<PAGE>

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

RISK AND REWARD ELEMENTS

This table discusses the main elements that make up each fund's overall risk and
reward characteristics (described on pages 2-15). It also outlines each fund's
policies toward various securities, including those that are designed to help
certain funds manage risk.

- --------------------------------------------------------------------------------
Market conditions

Potential risks

o Each fund's share price, yield, and total return will fluctuate in
response to bond market movements

o The value of most bonds will fall when interest rates rise; the longer a
bond's maturity and the lower its credit quality, the more its value
typically falls

o Adverse market conditions may from time to time cause a fund to take
temporary defensive positions that are inconsistent with its principal
investment strategies and may hinder a fund from achieving its investment
objective

o Mortgage-backed and asset-backed securities (securities representing an
interest in, or secured by, a pool of mortgages or other assets such as
receivables) could generate capital losses or periods of low yields if
they are paid off substantially earlier or later than anticipated

Potential rewards

o Bonds have generally outperformed money market investments over the long
term, with less risk than stocks

o Most bonds will rise in value when interest rates fall

o Mortgage-backed and asset-backed securities can offer attractive returns

Policies to balance risk and reward

o Under normal circumstances the funds plan to remain fully invested in
bonds and other fixed income securities as noted in the table on pages
24-25

o The funds seek to limit risk and enhance total return or yields through
careful management, sector allocation, individual securities selection,
and duration management

o During severe market downturns, the funds have the option of investing up
to 100% of assets in investment-grade short-term securities

o J.P. Morgan monitors interest rate trends, as well as geographic and
demographic information related to mortgage-backed securities and mortgage
prepayments; the Tax Exempt Bond Fund is not permitted to invest in
asset-backed or mortgage-backed securities; the New York Tax Exempt Bond
and California Bond funds are not permitted to invest in mortgage-backed
securities

- --------------------------------------------------------------------------------
Credit quality

Potential risks

o The default of an issuer would leave a fund with unpaid interest or
principal

o Junk bonds (those rated BB/Ba or lower) have a higher risk of default,
tend to be less liquid, and may be more difficult to value

Potential rewards

o Investment-grade bonds have a lower risk of default

o Junk bonds offer higher yields and higher potential gains

Policies to balance risk and reward

o Each fund maintains its own policies for balancing credit quality against
potential yields and gains in light of its investment goals

o J.P. Morgan develops its own ratings of unrated securities and makes a
credit quality determination for unrated securities

- --------------------------------------------------------------------------------
Foreign investments

Potential risks

o A fund could lose money because of foreign government actions, political
instability, or lack of adequate and accurate information

o Currency exchange rate movements could reduce gains or create losses

o Currency and investment risks tend to be higher in emerging markets

Potential rewards

o Foreign bonds, which represent a major portion of the world's fixed income
securities, offer attractive potential performance and opportunities for
diversification

o Favorable exchange rate movements could generate gains or reduce losses

o Emerging markets can offer higher returns

Policies to balance risk and reward

o Foreign bonds are a primary investment only for the International Bond and
Global Strategic Income funds and may be a significant investment for the
Short Term Bond and Bond funds; the Tax Exempt Bond, New York Tax Exempt
Bond and California Bond funds are not permitted to invest any assets in
foreign bonds

o To the extent that a fund invests in foreign bonds, it may manage the
currency exposure of its foreign investments relative to its benchmark,
and may hedge back into the U.S. dollar from time to time (see also
"Derivatives")

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

22 FUND DETAILS
<PAGE>

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

- --------------------------------------------------------------------------------
Management choices

Potential risks

o A fund could underperform its benchmark due to its sector, securities or
duration choices

Potential rewards

o A fund could outperform its benchmark due to these same choices

Policies to balance risk and reward

o J.P. Morgan focuses its active management on those areas where it believes
its commitment to research can most enhance returns and manage risks in a
consistent way

- --------------------------------------------------------------------------------
Derivatives

Potential risks

o Derivatives such as futures, options, and forward foreign currency
contracts that are used for hedging the portfolio or specific securities
may not fully offset the underlying positions(1)

o Derivatives used for risk management may not have the intended effects and
may result in losses or missed opportunities

o The counterparty to a derivatives contract could default

o Derivatives that involve leverage could magnify losses

Potential rewards

o Hedges that correlate well with underlying positions can reduce or
eliminate losses at low cost

o A fund could make money and protect against losses if management's
analysis proves correct

o Derivatives that involve leverage could generate substantial gains at low
cost

Policies to balance risk and reward

o The funds use derivatives for hedging and for risk management (i.e., to
adjust duration or to establish or adjust exposure to particular
securities, markets, or currencies); risk management may include
management of a fund's exposure relative to its benchmark; the Tax Exempt
Bond, New York Tax Exempt Bond and California Bond funds are permitted to
enter into futures and options transactions, however, these transactions
result in taxable gains or losses so it is expected that these funds will
utilize them infrequently; forward foreign currency contracts are not
permitted to be used by the Tax Exempt Bond, New York Tax Exempt Bond and
California Bond funds

o The funds only establish hedges that they expect will be highly correlated
with underlying positions

o While the funds may use derivatives that incidentally involve leverage,
they do not use them for the specific purpose of leveraging their
portfolios

- --------------------------------------------------------------------------------
Illiquid holdings

Potential risks

o A fund could have difficulty valuing these holdings precisely

o A fund could be unable to sell these holdings at the time or price desired

Potential rewards

o These holdings may offer more attractive yields or potential growth than
comparable widely traded securities

Policies to balance risk and reward

o No fund may invest more than 15% of net assets in illiquid holdings

o To maintain adequate liquidity to meet redemptions, each fund may hold
investment-grade short-term securities (including repurchase agreements)
and, for temporary or extraordinary purposes, may borrow from banks up to
331/3% of the value of its assets

- --------------------------------------------------------------------------------
When-issued and delayed delivery securities

Potential risks

o When a fund buys securities before issue or for delayed delivery, it could
be exposed to leverage risk if it does not use segregated accounts

Potential rewards

o A fund can take advantage of attractive transaction opportunities

Policies to balance risk and reward

o Each fund uses segregated accounts to offset leverage risk

- --------------------------------------------------------------------------------
Short-term trading

Potential risks

o IIncreased trading would raise a fund's transaction costs

o IIncreased short-term capital gains distributions would raise
shareholders' income tax liability

Potential rewards

o A fund could realize gains in a short period of time

o A fund could protect against losses if a bond is overvalued and its value
later falls

Policies to balance risk and reward

o The expected turnover rate for each fund is as follows:
o Tax Exempt Bond 50%
o New York Tax Exempt Bond, California Bond 75%
o Short Term Bond, Bond, Global Strategic Income 300%
o International Bond 350%

o The funds generally avoid short-term trading, except to take advantage of
attractive or unexpected opportunities or to meet demands generated by
shareholder activity
- --------------------------------------------------------------------------------

1 A futures contract is an agreement to buy or sell a set quantity of an
underlying instrument at a future date, or to make or receive a cash
payment based on changes in the value of a securities index. An option is
the right to buy or sell a set quantity of an underlying instrument at a
pre-determined price. A forward foreign currency contract is an obligation
to buy or sell a given currency on a future date and at a set price.

FUND DETAILS 23
<PAGE>

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

- --------------------------------------------------------------------------------
Investments
- --------------------------------------------------------------------------------

This table discusses the customary types of securities which can be held by each
fund. In each case the principal types of risk are listed on the following page
(see below for definitions). This table reads across two pages.

- --------------------------------------------------------------------------------
Asset-backed securities Interests in a stream of payments from specific assets,
such as auto or credit card receivables.
- --------------------------------------------------------------------------------
Bank obligations Negotiable certificates of deposit, time deposits and bankers'
acceptances of domestic and foreign issuers.
- --------------------------------------------------------------------------------
Commercial paper Unsecured short term debt issued by domestic and foreign banks
or corporations. These securities are usually discounted and are rated by S&P or
Moody's.
- --------------------------------------------------------------------------------
Convertible securities Domestic and foreign debt securities that can be
converted into equity securities at a future time and price.
- --------------------------------------------------------------------------------
Corporate bonds Debt securities of domestic and foreign industrial, utility,
banking, and other financial institutions.
- --------------------------------------------------------------------------------
Mortgages (directly held) Domestic debt instrument which gives the lender a lien
on property as security for the loan payment.
- --------------------------------------------------------------------------------
Mortgage-backed securities Domestic and foreign securities (such as Ginnie Maes,
Freddie Macs, Fannie Maes) which represent interests in pools of mortgages,
whereby the principal and interest paid every month is passed through to the
holder of the securities.
- --------------------------------------------------------------------------------
Mortgage dollar rolls The purchase of mortgage-backed securities with the
promise to purchase similar securities upon the maturity of the original
security. Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Participation interests Interests that represent a share of bank debt or similar
securities or obligations.
- --------------------------------------------------------------------------------
Private placements Bonds or other investments that are sold directly to an
institutional investor.
- --------------------------------------------------------------------------------
REITs and other real-estate related instruments Securities of issuers that
invest in real estate or are secured by real estate.
- --------------------------------------------------------------------------------
Repurchase agreements Contracts whereby the seller of a security agrees to
repurchase the same security from the buyer on a particular date and at a
specific price.
- --------------------------------------------------------------------------------
Sovereign debt, Brady bonds, and debt of supranational organizations Dollar- or
non-dollar-denominated securities issued by foreign governments or supranational
organizations. Brady bonds are issued in connection with debt restructurings.
- --------------------------------------------------------------------------------
Swaps Contractual agreement whereby a party agrees to exchange periodic payments
with a counterparty. Segregated accounts are used to offset leverage risk.
- --------------------------------------------------------------------------------
Synthetic variable rate instruments Debt instruments whereby the issuer agrees
to exchange one security for another in order to change the maturity or quality
of a security in the fund.
- --------------------------------------------------------------------------------
Tax exempt municipal securities Securities, generally issued as general
obligation and revenue bonds, whose interest is exempt from federal taxation and
state and/or local taxes in the state where the securities were issued.
- --------------------------------------------------------------------------------
U.S. government securities Debt instruments (Treasury bills, notes, and bonds)
guaranteed by the U.S. government for the timely payment of principal and
interest.
- --------------------------------------------------------------------------------
Zero coupon, pay-in-kind, and deferred payment securities Domestic and foreign
securities offering non-cash or delayed-cash payment. Their prices are typically
more volatile than those of some other debt instruments and involve certain
special tax considerations.
- --------------------------------------------------------------------------------

Risk related to certain securities held by J.P. Morgan Institutional fixed
income funds:

Credit risk The risk a financial obligation will not be met by the issuer of a
security or the counterparty to a contract, resulting in a loss to the
purchaser.

Currency risk The risk currency exchange rate fluctuations may reduce gains or
increase losses on foreign investments.

Extension risk The risk a rise in interest rates will extend the life of a
mortgage-backed security to a date later than the anticipated prepayment date,
causing the value of the investment to fall.

Interest rate risk The risk a change in interest rates will adversely affect the
value of an investment. The value of fixed income securities generally moves in
the opposite direction of interest rates (decreases when interest rates rise and
increases when interest rates fall).

Leverage risk The risk of gains or losses disproportionately higher than the
amount invested.

Liquidity risk The risk the holder may not be able to sell the security at the
time or price it desires.

24 FUND DETAILS
<PAGE>

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

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------

o Permitted (and if applicable, percentage limitation)
percentage of total assets - bold
percentage of net assets - italic

* Permitted, but not typically used

- -- Not permitted

Principal Types of Risk

Short Term International Global Strategic Tax Exempt New York Tax
Bond Bond Bond Income Bond Exempt Bond California Bond
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

credit, interest rate, market,
prepayment o o o o -- * *
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, liquidity, political o1 o1 o o * Domestic * Domestic * Domestic
Only Only Only
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate,
liquidity, market, political o o o * o o o
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate, 25% 25%
liquidity, market, political, valuation oForeign oForeign o * -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate, 25% 25%
liquidity, market, political, valuation oForeign oForeign o o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, extension, interest rate,
market, natural event, prepayment,
valuation o o -- o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, extension, interest
rate, leverage, market, political,
prepayment o o * o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
currency, extension, interest rate,
leverage, liquidity, market, political, 33 1/3% 33 1/3% 33 1/3%
prepayment o o -- o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, extension, interest
rate, liquidity, political, prepayment o o o o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, interest rate, liquidity,
market, valuation o o * o o o o
- ------------------------------------------------------------------------------------------------------------------------------------
credit, interest rate, liquidity,
market, natural event, prepayment,
valuation o o -- o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit o o * o * * *
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate,
market, political o o o o -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate,
leverage, market, political o o o o o -- --
- ------------------------------------------------------------------------------------------------------------------------------------
credit, interest rate, leverage,
liquidity, market -- -- -- -- o2 o2 o2
- ------------------------------------------------------------------------------------------------------------------------------------
credit, interest rate, market,
natural event, political * * -- -- o o o
- ------------------------------------------------------------------------------------------------------------------------------------
interest rate o o o o o o o
- ------------------------------------------------------------------------------------------------------------------------------------
credit, currency, interest rate,
liquidity, market, political,
valuation o o o o o o o
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Market risk The risk that when the market as a whole declines, the value of a
specific investment will decline proportionately. This systematic risk is common
to all investments and the mutual funds that purchase them.

Natural event risk The risk a natural disaster, such as a hurricane or similar
event, will cause severe economic losses and default in payments by the issuer
of the security.

Political risk The risk governmental policies or other political actions will
negatively impact the value of the investment.

Prepayment risk The risk declining interest rates will result in unexpected
prepayments, causing the value of the investment to fall.

Valuation risk The risk the estimated value of a security does not match the
actual amount that can be realized if the security is sold.

1 For each of the Short Term Bond and Bond funds, all foreign securities in
the aggregate may not exceed 25% of such fund's assets.

2 At least 65% of assets must be in tax exempt securities (for New York
Total Return Bond and California Bond funds, the 65% must be in New York
or California municipal securities, respectively).

25 FUND DETAILS
<PAGE>

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

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each fund's
financial performance for the past one through five fiscal years or periods, as
applicable. Certain information reflects financial results for a single fund
share. The total returns in the tables represent the rate that an investor would
have earned (or lost) on an investment in a fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose reports, along with each fund's financial
statements, are included in the respective fund's annual report, which are
available upon request.

================================================================================

J.P. MORGAN INSTITUTIONAL SHORT TERM BOND FUND

<TABLE>
<CAPTION>
- ----------------------------
Per-share data For fiscal periods ended
- -----------------------------------------------------------------------------------------------------------
10/31/931 10/31/94 10/31/95 10/31/96 10/31/97 4/30/98
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 9.99 9.60 9.83 9.85 9.84
- -----------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.11 0.47 0.58 0.55 0.61 0.30
Net realized and unrealized gain (loss)
on investment ($) (0.01) (0.39) 0.24 0.02 (0.01) --
- -----------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.10 0.08 0.82 0.57 0.60 0.30
Less distributions to shareholders from:
Net investment income ($) (0.11) (0.47) (0.59) (0.55) (0.61) (0.30)
Net asset value, end of period ($) 9.99 9.60 9.83 9.85 9.84 9.84
- -----------------------------------------------------------------------------------------------------------
- ----------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------
Total return (%) 1.012 0.87 8.81 6.01 6.27 3.102
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 27,605 47,679 18,916 17,810 27,375 76,934
- -----------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.463 0.45 0.45 0.37 0.25 0.253
- -----------------------------------------------------------------------------------------------------------
Net investment income (%) 3.923 4.96 6.09 5.69 6.19 6.163
Decrease reflected in expense ratio due
to expense reimbursement (%) 0.843 0.33 0.22 1.00 0.71 0.443
- -----------------------------------------------------------------------------------------------------------
</TABLE>

1 The fund commenced operations on 7/8/93.

2 Not annualized.

3 Annualized.

26 FUND DETAILS

<PAGE>

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

================================================================================
J.P. MORGAN INSTITUTIONAL BOND FUND

<TABLE>
<CAPTION>
- ------------------------------
Per-share data For fiscal periods ended
- -----------------------------------------------------------------------------------------------------------------
10/31/931 10/31/94 10/31/95 10/31/96 10/31/97 4/30/98
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 10.14 9.23 9.98 9.84 10.01
- -----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.15 0.55 0.63 0.61 0.65 0.33
Net realized and unrealized gain (loss)
on investment ($) 0.14 (0.88) 0.75 (0.11) 0.18 0.03
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.29 (0.33) 1.38 0.50 0.83 0.36
- -----------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.15) (0.55) (0.63) (0.61) (0.64) (0.33)
Net realized gain (loss) ($) -- (0.03) -- (0.03) (0.02) (0.07)
- ---------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.15) (0.58) (0.63) (0.64) (0.66) (0.40)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 10.14 9.23 9.98 9.84 10.01 9.97
- ---------------------------------------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------------------------
Total return (%) 2.902 (3.33) 15.50 5.21 8.78 3.602
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 43,711 253,174 438,610 836,066 912,054 908,291
- ---------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.503 0.50 0.47 0.50 0.50 0.493
- ---------------------------------------------------------------------------------------------------------------
Net investment income (%) 4.833 6.00 6.62 6.28 6.59 6.603
- ---------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 0.393 0.19 0.05 0.03 0.004 --
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

1 The fund commenced operations on 7/26/93.

2 Not annualized.

3 Annualized.

4 Less than 0.01%.

================================================================================
J.P. MORGAN INSTITUTIONAL INTERNATIONAL BOND FUND

<TABLE>
<CAPTION>
- ------------------------------
Per-share data For fiscal periods ended
- ---------------------------------------------------------------------------------------------
9/30/951 9/30/96 9/30/97 3/31/98
(unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 11.12 11.30 8.65
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.49 0.31 2.21 0.10
Net realized and unrealized gain
on investment and foreign currency
(loss) allocated from portfolio ($) 0.78 0.95 (1.11) 0.32
- ---------------------------------------------------------------------------------------------
Total from investment operations ($) 1.27 1.26 1.10 0.42
- ---------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.15) -- (2.78) (0.76)
Net realized gain (loss) ($) -- (1.08) (0.97) (0.20)
- ---------------------------------------------------------------------------------------------
Total distributions ($) (0.15) (1.08) (3.75) (0.96)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period ($) 11.12 11.30 8.65 8.11
- ---------------------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- ---------------------------------------------------------------------------------------------
Total return (%) 12.832 12.09 12.52 5.192
- ---------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 4,233 13,310 7,126 6,198
- ---------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.603 0.65 0.50 0.653
- ---------------------------------------------------------------------------------------------
Net investment income (%) 5.823 5.28 4.88 3.783
- ---------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) 1.9034 1.02 1.91 1.413
- ---------------------------------------------------------------------------------------------
</TABLE>

1 The fund commenced operations on 12/1/94.

2 Not annualized.

3 Annualized.

4 After consideration of certain state limitations.

FUND DETAILS 27
<PAGE>

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

================================================================================
J.P. MORGAN INSTITUTIONAL GLOBAL STRATEGIC INCOME FUND

- ------------------------------
Per-share data For fiscal periods ended
- --------------------------------------------------------------------------------
10/31/971 4/30/98
(unaudited)
Net asset value, beginning of period ($) 10.00 10.16
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.46 0.39
Net realized and unrealized gain
on investment and foreign currency ($) 0.15 0.19
- --------------------------------------------------------------------------------
Total from investment operations ($) 0.61 0.58
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.45) (0.40)
Net realized gain (loss) ($) -- (0.03)
- --------------------------------------------------------------------------------
Total distributions ($) (0.45) (0.43)
- --------------------------------------------------------------------------------
Net asset value, end of period ($) 10.16 10.31
- --------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------
Total return (%) 6.152 5.712
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 105,051 197,578
- --------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.653 0.653
- --------------------------------------------------------------------------------
Net investment income (%) 7.123 7.233
- --------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 0.533 0.173
- --------------------------------------------------------------------------------

1 The fund commenced operations on 3/17/97.

2 Not annualized.

3 Annualized.

================================================================================
J.P. MORGAN INSTITUTIONAL TAX EXEMPT BOND FUND
- --------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 10.07 9.75 10.01 9.92 10.12
- -------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.06 0.48 0.49 0.48 0.48 0.24
Net realized and unrealized gain (loss)
on investment ($) 0.07 (0.32) 0.26 (0.07) 0.20 0.19
- -------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.13 0.16 0.75 0.41 0.68 0.43
- -------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.06) (0.48) (0.49) (0.48) (0.48) (0.24)
Net realized gain (loss) ($) -- -- -- (0.02) (0.00)2 --
- -------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.06) (0.48) (0.49) (0.50) (0.48) (0.24)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 10.07 9.75 10.01 9.92 10.12 10.31
- -------------------------------------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------------------------
Total return (%) 1.393 1.61 8.00 4.13 7.06 4.253
- -------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) --5 16,415 59,867 121,131 201,614 243,223
- -------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) -- 0.50 0.50 0.50 0.50 0.504
- -------------------------------------------------------------------------------------------------------------
Net investment income (%) 3.564 4.70 5.09 4.82 4.83 4.664
- -------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 2.504 1.48 0.21 0.10 0.06 0.024
- -------------------------------------------------------------------------------------------------------------
</TABLE>

1 The fund commenced operations on 7/12/93.

2 Less than $0.01 per share.

3 Not Annualized.

4 Annualized.

5 Net assets at 8/31/93 were $202.

28 FUND DETAILS

<PAGE>

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

================================================================================
J.P. MORGAN INSTITUTIONAL NEW YORK TAX EXEMPT BOND FUND

<TABLE>
<CAPTION>
- ------------------------------
Per-share data For fiscal periods ended March 31
- -------------------------------------------------------------------------------------------
19951 1996 1997 1998
<S> <C> <C> <C> <C>
Net asset value, beginning of period ($) 10.00 10.11 10.34 10.31
- -------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.42 0.49 0.48 0.48
Net realized and unrealized gain (loss)
on investment ($) 0.11 0.25 (0.02) 0.40
- -------------------------------------------------------------------------------------------
Total from investment operations ($) 0.53 0.74 0.46 0.88
- -------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.42) (0.49) (0.48) (0.48)
Net realized gain (loss) ($) .-- (0.02) (0.01) (0.04)
- -------------------------------------------------------------------------------------------
Total distributions ($) (0.42) (0.51) (0.49) (0.52)
- -------------------------------------------------------------------------------------------
Net asset value, end of period ($) 10.11 10.34 10.31 10.67
Total return (%) 5.492 7.40 4.54 8.64
- -------------------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- -------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 20,621 47,926 90,792 111,418
- -------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.503 0.50 0.50 0.50
- -------------------------------------------------------------------------------------------
Net investment income (%) 4.653 4.67 4.70 4.54
- -------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 0.553 0.17 0.14 0.09
- -------------------------------------------------------------------------------------------
</TABLE>

================================================================================
J.P. MORGAN INSTITUTIONAL CALIFORNIA BOND FUND

- ------------------------------
Per-share data For fiscal periods ended April 30
- --------------------------------------------------------------------------------
19971 1998
Net asset value, beginning of period ($) 10.00 9.90
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.16 0.42
Net realized and unrealized gain (loss)
on investment ($) (0.10) 0.30
- --------------------------------------------------------------------------------
Total from investment operations ($) 0.06 0.72
- --------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income ($) (0.16) (0.42)
Net asset value, end of period ($) 9.90 10.20
- --------------------------------------------------------------------------------
Total return (%) 0.562 7.35
- --------------------------------------------------------------------------------
- ------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 14,793 46,280
- --------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.453 0.45
- --------------------------------------------------------------------------------
Net investment income (%) 4.433 4.11
- --------------------------------------------------------------------------------
Decrease reflected in expense ratio due to
expense reimbursement (%) 3.013 0.34
- --------------------------------------------------------------------------------
Portfolio turnover (%) 40 44
- --------------------------------------------------------------------------------

FUND DETAILS 29

<PAGE>

- --------------------------------------------------------------------------------
For More Information
- --------------------------------------------------------------------------------

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the fund, may be obtained by contacting:

J.P. Morgan Institutional Funds
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036

Telephone: 1-800-766-7722

Hearing impaired: 1-888-468-4015

Email: [email protected]

Text-only versions of these documents and this prospectus are available, upon
payment of a duplicating fee, from the Public Reference Room of the Securities
and Exchange Commission in Washington, D.C. (1-800-SEC-0330) and may be viewed
on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. The
funds' investment company and 1933 Act registration numbers are:

J.P. Morgan Institutional Short Term Bond Fund ....................811-07342 and
033-54642

J.P. Morgan Institutional Bond Fund ...............................811-07342 and
033-54642

J.P. Morgan Institutional International Bond Fund .................811-07342 and
033-54642

J.P. Morgan Institutional Global Strategic Income Fund ............811-07342 and
033-54642

J.P. Morgan Institutional Tax Exempt Bond Fund ....................811-07342 and
033-54642

J.P. Morgan Institutional New York Tax Exempt Bond Fund ...........811-07342 and
033-54642

J.P. Morgan Institutional California Bond Fund ....................811-07795 and
333-11125

J.P. MORGAN
- --------------------------------------------------------------------------------
J.P. Morgan Institutional Funds

Advisor Distributor
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-766-7722 1-800-221-7930

J.P. MORGAN INSTITUTIONAL FUNDS AND THE MORGAN TRADITION

The J.P. Morgan Institutional Funds combine a heritage of integrity and
financial leadership with comprehensive, sophisticated analysis and management
techniques. Drawing on J.P. Morgan's extensive experience and depth as an
investment manager, the J.P. Morgan Institutional Funds offer a broad array of
distinctive opportunities for mutual fund investors.

<PAGE>

The Statement of Additional Information for:

J.P. Morgan Institutional Short Term Bond Fund, J.P. Morgan Institutional
Bond Fund, J.P. Morgan Institutional Global Strategic Income Fund dated March 2,
1998; and J.P. Morgan Institutional Tax Exempt Bond, J.P. Morgan Institutional
International Bond Fund dated March 2, 1998 are incorporated herein by reference
from the 497 filing to the Registration Statement of the Registrant submitted on
March 13, 1998 (accession no. 0001042058-98-000040);and

J.P. Morgan Institutional New York Total Return Bond Fund dated August 3,
1998 is incorporated herein by reference to Post-Effective Amendment no. 53/
Amendment no. 54 to the Registration Statement of the Registrant filed on July
28, 1998 (accession no. 0001041455-98-000040).

<PAGE>

PART C

ITEM 23. EXHIBITS.

(a) Declaration of Trust, as amended, was filed as Exhibit No. 1 to
Post-Effective Amendment No. 25 to the Registration Statement filed on September
26, 1996 (Accession Number 0000912057-96-021281).

(a)1 Amendment No. 5 to Declaration of Trust; Amendment and Fifth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest.*

(a)2 Amendment No. 6 to Declaration of Trust; Amendment and Sixth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(b) to Post-Effective Amendment No. 31 to the
Registration Statement on February 28, 1997 (Accession Number
0001016964-97-000041).

(a)3 Amendment No. 7 to Declaration of Trust; Amendment and Seventh Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(c) to Post-Effective Amendment No. 32 to the
Registration Statement on April 15, 1997 (Accession Number
0001016964-97-000053).

(a)4 Amendment No. 8 to Declaration of Trust; Amendment and Eighth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(d) to Post-Effective Amendment No. 40 to the
Registration Statement on October 9, 1997 (Accession Number
0001016964-97-000158).

(a)5 Amendment No. 9 to Declaration of Trust; Amendment and Ninth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(e) to Post-Effective Amendment No. 50 to the
Registration Statement on December 29, 1997 (Accession Number
0001041455-97-000014).

(a)6 Form of Amendment No. 10 to Declaration of Trust; Amendment to provide
dollar based voting rights filed as Exhibit (a)6 to Post Effective Amendment No.
54 to the Registration Statement on August 25, 1998 (Accession No.
0001041455-98-000053).

(b) Restated By-Laws of Registrant.*

(e) Distribution Agreement between Registrant and Funds Distributor, Inc.
("FDI").*

(g) Custodian Contract between Registrant and State Street Bank and Trust
Company ("State Street").*

(h)1 Co-Administration Agreement between Registrant and FDI.*

(h)2 Restated Shareholder Servicing Agreement between Registrant and Morgan
Guaranty Trust Company of New York ("Morgan Guaranty") filed as Exhibit (h)2 to
Post Effective Amendment No. 54 to the Registration Statement on August 25,
1998 (Accession No. 0001041455-98-000053).

(h)3 Transfer Agency and Service Agreement between Registrant and State
Street.*

(h)4 Restated Administrative Services Agreement between Registrant and
Morgan Guaranty.*
<PAGE>

(h)5 Fund Services Agreement, as amended, between Registrant and Pierpont
Group, Inc.*

(h)6 Service Plan with respect to Registrant's Service Money Market Funds.**
(i) Opinion and consent of Sullivan & Cromwell.*

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

(l) Purchase agreements with respect to Registrant's initial shares.*

(n) Financial Data Schedules (to be filed by amendment).
- -------------------------

* Incorporated herein by reference to Post-Effective Amendment No. 29 to
the Registration Statement filed on December 26, 1996 (Accession Number
0001016964-96-000061).

** Incorporated herein by reference to Post-Effective Amendment No. 33 to
the Registration Statement filed on April 30, 1997 (Accession Number
00001016964-97-000059).

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

Not applicable.

ITEM 25. INDEMNIFICATION.

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

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

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

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

Not Applicable.
<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS.

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

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

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

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

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

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

Director, President and Chief Executive Officer: Marie E. Connolly
Executive Vice President: George Rio
<PAGE>

Executive Vice President: Donald R. Roberson
Executive Vice President: William S. Nichols
Senior Vice President: Michael S. Petrucelli
Director, Senior Vice President, Treasurer and
Chief Financial Officer: Joseph F. Tower, III
Senior Vice President: Paula R. David
Senior Vice President: Allen B. Closser
Senior Vice President: Bernard A. Whalen
Director: William J. Nutt

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.

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

MORGAN GUARANTY TRUST COMPANY OF NEW YORK: 60 Wall Street, New York, New York
10260-0060, 522 Fifth Avenue, New York, New York 10036 or 9 West 57th Street,
New York, New York 10019 (records relating to its functions as shareholder
servicing agent and administrative services agent).

STATE STREET BANK AND TRUST COMPANY: 1776 Heritage Drive, North Quincy,
Massachusetts 02171 and 40 King Street West, Toronto, Ontario, Canada M5H 3Y8
(records relating to its functions as fund accountant, custodian, transfer agent
and dividend disbursing agent).

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

ITEM 29. MANAGEMENT SERVICES.

Not Applicable.

ITEM 30. UNDERTAKINGS.

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

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

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of New York and State of New York on the 15th day of September, 1998.

J.P. MORGAN INSTITUTIONAL FUNDS

By /s/ Michael S. Petrucelli
----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities
indicated on September 15, 1998.

/s/ Michael S. Petrucelli
- ------------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary

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

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

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

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

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

*By /s/ Michael S. Petrucelli
----------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney.

<PAGE>

SIGNATURES

Each Portfolio has duly caused this registration statement on Form N-1A
("Registration Statement") of J.P. Morgan Institutional Funds (the "Trust")
(File No. 033-54642) to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of New York and State of New York on the 15th day of
September, 1998.

THE TAX EXEMPT BOND PORTFOLIO, THE NEW YORK TAX EXEMPT BOND PORTFOLIO AND SERIES
PORTFOLIO II

/s/ Michael S. Petrucelli
By ----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, the Trust's
Registration Statement has been signed below by the following persons in the
capacities indicated on September 15, 1998.

/s/ Michael S. Petrucelli
- ----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary of the Portfolio

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

Frederick S. Addy*
- ----------------------------
Frederick S. Addy
Trustee of the Portfolio

William G. Burns*
- ----------------------------
William G. Burns
Trustee of the Portfolio

Arthur C. Eschenlauer*
- ----------------------------
Arthur C. Eschenlauer
Trustee of the Portfolio

Michael P. Mallardi*
- ----------------------------
Michael P. Mallardi
Trustee of the Portfolio

/s/ Michael S. Petrucelli
*By -----------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney.

<PAGE>

SIGNATURES

Each Portfolio has duly caused this registration statement on Form N-1A
("Registration Statement") of the J.P. Morgan Institutional Funds (the "Trust")
(File No. 033-54642) to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of George Town, Grand Cayman, BWI on the 15th day of
September, 1998.

THE SHORT TERM BOND PORTFOLIO, THE U.S. FIXED INCOME PORTFOLIO AND THE NON-U.S.
FIXED INCOME PORTFOLIO

/s/ Jacqueline Henning
By -------------------------
Jacqueline Henning
Assistant Secretary and Assistant Treasurer

Pursuant to the requirements of the Securities Act of 1933, the Trust's
Registration Statement has been signed below by the following persons in the
capacities indicated on September 15, 1998.

Michael S. Petrucelli
- ----------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary
Officer of the Portfolios

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

Frederick S. Addy*
- ----------------------------
Frederick S. Addy
Trustee of the Portfolios

William G. Burns*
- ----------------------------
William G. Burns
Trustee of the Portfolios

Arthur C. Eschenlauer*
- ----------------------------
Arthur C. Eschenlauer
Trustee of the Portfolios

Michael P. Mallardi*
- ----------------------------
Michael P. Mallardi
Trustee of the Portfolios

/s/ Jacqueline Henning
*By ------------------------
Jacqueline Henning
as attorney-in-fact pursuant to a power of attorney previously filed.