J.P. MORGAN INSTITUTIONAL FUNDS
J.P. Morgan Institutional Service Tax Exempt Money Market Fund
Supplement dated July 28, 1998 to the Statement of Additional Information dated
February 2, 1998
1. The third paragraph under "Investment Objective and Policies" is replaced
with the following:
The Portfolio attempts to achieve its investment objective by maintaining a
dollar-weighted average portfolio maturity of not more than 90 days and by
investing in U.S. dollar-denominated securities described in this Statement
of Additional Information that meet certain rating criteria, present
minimal credit risks, have effective maturities of not more than thirteen
months and earn interest wholly exempt from federal income tax in the
opinion of bond counsel for the issuer. If attractive municipal obligations
are not available, the Fund may hold cash rather than invest in taxable
money market instruments. The Portfolio, however, may temporarily invest up
to 20% of total assets in taxable securities in abnormal market conditions,
for defensive purposes only. For purposes of this calculation, obligations
that generate income that may be treated as a preference item for purposes
of the alternative minimum tax shall not be considered taxable securities.
See "Quality and Diversification Requirements." Interest on these
securities may be subject to state and local taxes. For more detailed
information regarding tax matters, including the applicability of the
alternative minimum tax, see "Taxes."
2. The "Taxable Investments" section is amended in its entirety as follows:
The Portfolio attempts to invest its assets in tax exempt municipal
securities and when these investments are not available, may hold cash
or may invest to a limited extent in taxable securities. While the Fund
does not currently intend to invest in taxable securities, in abnormal
market conditions for defensive purposes only, it may invest up to 20%
of the value of its total assets in securities, the interest income on
which may be subject to federal, state or local income taxes. The
taxable investments permitted for the Portfolio include obligations of
the U.S. Government and its agencies and instrumentalities, bank
obligations, commercial paper and repurchase agreements.
The Fund may make investments in other debt securities with remaining
effective maturities of not more than thirteen months, including
without limitation corporate bonds, and other obligations described in
the Prospectus or this Statement of Additional Information.
