J.P. Morgan Institutional Funds
Supplement dated January 8, 1998, as applicable to the following Prospectuses:
The JPM Institutional Prime Money Market Fund, dated 2/28/97
The JPM Institutional Federal Money Market Fund, dated 2/28/97
The JPM Institutional Treasury Money Market Fund, dated 5/30/97
The JPM Institutional Short Term Bond Fund, dated 2/28/97
The JPM Institutional Bond Fund, dated 2/28/97
The JPM Institutional Global Strategic Income Fund, dated 7/14/97
The JPM Institutional New York Total Return Bond Fund, dated 7/14/97
The JPM Institutional International Equity Fund, dated 2/28/97
The JPM Institutional International Opportunities Fund, dated 8/4/97
The JPM Institutional Emerging Markets Equity Fund, dated 2/28/97
The JPM Institutional European Equity Fund, dated 4/30/97
The JPM Institutional Japan Equity Fund, dated 4/30/97
The JPM Institutional Service Prime Money Market Fund, dated 5/30/97
The JPM Institutional Service Federal Money Market Fund, dated 5/30/97
The JPM Institutional Service Treasury Money Market Fund, dated 5/30/97
The JPM Institutional Service Tax Exempt Market Fund, dated 5/30/97
(Supersedes all supplements with respect to the above Funds dated prior to
January 8, 1998, except for the supplement dated December 12, 1997)
Fund Name Changes:
1. Effective January 1, 1998, the name of the Trust changed from "The JPM
Institutional Funds" to "J.P. Morgan Institutional Funds" and each Fund's name
changed as follows:
<TABLE>
<C> <S>
Old Name New Name
The JPM Institutional Prime Money Market Fund J.P. Morgan Institutional Prime Money Market Fund
The JPM Institutional Federal Money Market Fund J.P. Morgan Institutional Federal Money Market Fund
The JPM Institutional Short Term Bond Fund J.P. Morgan Institutional Short Term Bond Fund
The JPM Institutional Bond Fund J.P. Morgan Institutional Bond Fund
The JPM Institutional Global Strategic Income Fund J.P. Morgan Institutional Global Strategic Income Fund
The JPM Institutional New York Total Return Bond Fund J.P. Morgan Institutional New York Total Return Bond Fund
The JPM Institutional International Equity Fund J.P. Morgan Institutional International Equity Fund
The JPM Institutional International Opportunities Fund J.P. Morgan Institutional International Opportunities Fund
The JPM Institutional Emerging Markets Equity Fund J.P. Morgan Institutional Emerging Markets Equity Fund
The JPM Institutional European Equity Fund J.P. Morgan Institutional European Equity Fund
The JPM Institutional Japan Equity Fund J.P. Morgan Institutional Japan Equity Fund
Old Name New Name
The JPM Institutional Service Prime Money Market Fund J.P. Morgan Institutional Service Prime Money Market Fund
The JPM Institutional Service Federal Money J.P. Morgan Institutional Service Federal Money
Market Fund Market Fund
The JPM Institutional Service Tax Exempt Money J.P. Morgan Institutional Service Tax Exempt Money
Market Fund Market Fund
The JPM Institutional Service Treasury Money Market Fund J.P. Morgan Institutional Service Treasury Money
Market Fund
The JPM Institutional Treasury Money Market Fund J.P. Morgan Institutional Treasury Money Market Fund
</TABLE>
Investment Policy Revisions:
2. The first sentence in the paragraph above the heading "Treasury Securities;
Certain U.S. Government Agency Obligations" under "Investment Objective(s) and
Policies" in the Prospectus for the Federal Money Market Fund is revised as
follows:
The Portfolio seeks to achieve its investment objective by investing in
direct obligations of the U.S. Treasury and in obligations of certain U.S.
Government agencies described below.
3. The third, fourth and fifth sentences under the heading "Treasury Securities;
Certain U.S. Government Agency Obligations" in the Prospectus for the Federal
Money Market Fund are revised as follows:
During ordinary market conditions substantially all of the Portfolio's net
assets will be invested in Treasury Securities and obligations issued by U.S.
Government agencies, that are generally exempt from state and local income
taxes, where the Portfolio must look to the issuing agency for ultimate
repayment, including the Federal Farm Credit System, the Federal Home Loan
Banks, the Tennessee Valley Authority and the Student Loan Marketing Association
("Permitted Agency Securities"). Each such obligation must have a remaining
maturity of 397 days or less at the time of purchase by the Portfolio.
4. The second to last sentence under the heading "Treasury Securities; Certain
U.S. Government Agency Obligations" in the Prospectus for the Federal Money
Market Fund is revised as follows:
The Portfolio also may purchase Treasury Securities and Permitted
Agency Securities on a when-issued or delayed delivery basis and, although it
has no current intention to do so, may engage in repurchase and reverse
repurchase agreement transactions involving such securities.
5. The first sentence under the heading "Repurchase Agreements" in the
Prospectus for the Federal Money Market Fund is revised as follows:
The Portfolio may, although it has no current intention to do so,
engage in repurchase agreements with brokers, dealers or banks that meet the
credit guidelines established by the Portfolio's Trustees.
6. The third sentence under the heading "Repurchase Agreements" in the
Prospectus for the Federal Money Market Fund is revised as follows:
The Portfolio may only enter into repurchase agreements involving
Treasury Securities and Permitted Agency Securities.
7. The second sentence of the seventh paragraph under the heading "Investment
Objective and Policies" in the Prospectus for the International Equity Fund is
replaced with the following:
Through the use of forward foreign currency exchange contracts, the Advisor will
adjust the Portfolio's foreign currency weightings relative to the EAFE Index.
In addition, from time to time, the Advisor may reduce the Portfolio's foreign
currency exposure by entering into forward foreign currency exchange contracts
to sell a foreign currency in exchange for the U.S. dollar.
8. The following is added after the second sentence of the second paragraph
under the heading "Foreign Currency Exchange Transactions" in the Prospectuses
for the International Equity and Emerging Markets Equity Funds:
These contracts are derivative instruments, as their value derives from
the spot exchange rates of the currencies underlying the contracts.
9. The sentence "The Portfolio will not enter into forward contracts for
speculative purposes." in the above paragraph is deleted in the Prospectuses for
the Bond, Short Term Bond, International Equity and Emerging Markets Equity
Funds.
10. The third paragraph under the heading "Foreign Currency Exchange
Transactions" in the Prospectus for the International Equity Fund is replaced
with the following:
The Portfolio may enter into forward foreign currency exchange
contracts to adjust its currency exposure relative to its benchmark, the EAFE
Index. The Portfolio may also enter into forward foreign currency exchange
contracts in connection with settlements of securities transactions and other
anticipated payments or receipts. In addition, from time to time, the Advisor
may reduce the Portfolio's foreign currency exposure by entering into forward
foreign currency exchange contracts to sell a foreign currency in exchange for
the U.S. dollar. Forward foreign currency exchange contracts may involve the
purchase or sale of a foreign currency in exchange for U.S.
dollars or may involve two foreign currencies.
11. The third paragraph under the heading "Foreign Currency Exchange
Transactions" in the Prospectus for the Emerging Markets Equity Fund is replaced
with the following:
The Portfolio may enter into forward foreign currency exchange contracts in
connection with settlements of securities transactions and other anticipated
payments or receipts. In addition, from time to time, the Advisor may reduce the
Portfolio's foreign currency exposure by entering into forward foreign currency
exchange contracts to sell a foreign currency in exchange for the U.S. dollar.
The Portfolio may also enter into forward foreign currency exchange contracts to
adjust its currency exposure relative to its benchmark, the MSCI Emerging
Markets Free Index. Forward foreign currency exchange contracts may involve the
purchase or sale of a foreign currency in exchange for U.S.
dollars or may involve two foreign currencies.
Money Market Funds: Cut-Off Times for Purchases and Redemptions:
12. Cut-Off Times for Purchases and Redemptions:
The Prime Money Market and Federal Money Market Funds have extended their
cut-off times for receiving purchase and redemption orders for Fund shares. The
new cut-off times for purchase and redemption orders and for receipt of
immediately available funds are as follows:
<TABLE>
<S> <C> <C>
Deadline for Receipt of
Deadline for Purchase Immediately Available Funds
and Redemption Orders by the Fund
Prime Money Market 5:00 pm 5:00 pm
Federal Money Market 2:00 pm 4:00 pm
</TABLE>
Purchase orders and immediately available funds must be received by the above
times on a Fund business day for the purchase to be effective and dividends to
be earned on the same day. The net asset value for the Prime Money Market Fund
will now be calculated at 5:00 pm.
Money Market Funds: Short-Term Gains:
13. The second paragraph under the caption "Dividends and Distributions" in the
Prospectuses for the Prime Money Market and Federal Money Market Funds is
replaced with the following:
Net short-term capital gains, if any, will be distributed in accordance with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and
may be reflected in the Fund's daily dividends. Substantially all the realized
net long-term capital gains, if any, of the Fund are declared and paid on an
annual basis, except that an additional capital gains distribution may be made
in a given year to the extent necessary to avoid the imposition of federal
excise tax on the Fund.
Other Changes:
14. The first sentence of the third paragraph on the front page of the
Prospectus for the Federal Money Market Fund is revised as follows:
Unlike other mutual funds which directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective by
investing all of its investable assets in The Federal Money Market Portfolio
(formerly The Treasury Money Market Portfolio (the "Portfolio")), a
corresponding diversified open-end management investment company having the same
investment objective as the Fund.
15. The last sentence of the second paragraph under "Investment Objective and
Policies" in the Prospectus for the Federal Money Market Fund is revised as
follows:
The Fund attempts to achieve its investment objective by investing all
of its investable assets in The Federal Money Market Portfolio, a diversified
open-end management investment company having the same investment objective as
the Fund.
16. The following is added after the first sentence of the third paragraph under
the caption "Investment Objective and Policies" in the prospectuses for the
Prime Money Market and Federal Money Market Funds:
The market value of obligations in which the Portfolio invests is not guaranteed
and may rise and fall in response to changes in interest rates.
17. The fifth sentence under the heading "Advisor" in the Prospectuses for the
Federal Money Market, Prime Money Market, Short Term Bond, Bond, International
Equity and Emerging Markets Equity Funds is revised as follows:
Through offices in New York City and abroad, J.P. Morgan, through the Advisor
and other subsidiaries, offers a wide range of services to governmental,
institutional, corporate and individual customers and acts as investment adviser
to individual and institutional clients with combined assets under management of
over $240 billion.
18. Any reference to control persons under the caption "Organization" in
the Prospectus for Federal Money Market Fund is deleted.
19. The third sentence of the first paragraph under the heading "Organization"
is restated in the Prospectuses for the Prime Money Market, Federal Money
Market, Bond, Short Term Bond, International Equity and Emerging Markets Equity
Funds as follows:
To date, shares of 24 series have been authorized and are available for sale to
the public.
Treasury Money Market Funds:
20. The fiscal year end of the Treasury Money Market and Service Treasury Money
Market Funds is changed from July 31 to October 31.
21. The voluntary expense reimbursement in effect from June 1, 1998-November 30,
1998 for the Treasury Money Market and Service Treasury Money Market Funds is
extended until February 28, 1999.
22. The following supplements the "Annual Operating Expenses" table in the
Prospectus for the Service Treasury Money Market Fund:
Annual Operating Expenses*
Advisory Fees (after expense reimbursement) 0.13%
Rule 12b-1 Fees None
Other Expenses (after expense reimbursement) None
Service Fees** 0.25%
-----
Total Operating Expenses (after expense reimbursement) 0.38%
=====
** Under the Trust's Service Plan, up to 0.25% is payable to Service
Organizations, as defined below (0.20% in cases where Morgan or an affiliate is
the Service Organization). Service Organizations may charge other fees to their
customers who are the beneficial owners of shares in connection with their
customers' accounts. See "Service Organizations." Such fees, if any, will affect
the return such customers realize with respect to their investments.
23. The following supplements the "Annual Operating Expenses" table in the
Prospectus for the Treasury Money Market Fund:
Annual Operating Expenses*
Advisory Fees (after expense reimbursement) 0.13%
Rule 12b-1 Fees None
Other Expenses (after expense reimbursement) None
----
Total Operating Expenses (after expense reimbursement) 0.13%
=====
24. The following replaces in its entirety the last two paragraphs under
"Expense Table - Annual Operating Expenses" in the Prospectus for the Service
Treasury Money Market Fund:
The Total Operating Expenses for the Fund is a blended ratio which is based on
the reimbursements in effect from August 1, 1997 through October 31, 1998 and
may not necessarily represent the actual amount incurred by a shareholder at any
particular time during the periods indicated; the actual amount may be higher or
lower than that shown above depending on the date of purchase and length of
holding period of Fund shares. Without any expense reimbursements, the Advisory
Fee, Estimated Other Expenses and Total Operating Expenses would be equal on an
annual basis to 0.20%, 0.26% and 0.71%, respectively, of the average daily net
assets of the Fund.
25. The following replaces in its entirety the last paragraph under "Expense
Table - Annual Operating Expenses" in the Prospectus for the Treasury Money
Market Fund:
The Total Operating Expenses for the Fund is a blended ratio which is based on
the reimbursements in effect from August 1, 1997 through October 31, 1998 and
may not necessarily represent the actual amount incurred by a shareholder at any
particular time during the periods indicated; the actual amount may be higher or
lower than that shown above depending on the date of purchase and length of
holding period of Fund shares. Without any expense reimbursements, the Advisory
Fee, Estimated Other Expenses and Total Operating Expenses would be equal on an
annual basis to 0.20%, 0.26% and 0.46%, respectively, of the average daily net
assets of the Fund.
26. The sub-section entitled "Service Organizations" in the Prospectus for
the Service Treasury Money Market Fund is replaced in its entirety with the
following:
Service Organizations. The Trust has adopted a Service Plan with respect to Fund
shares which authorizes it to compensate Service Organizations, including Morgan
and its affiliates, for providing account administration and other services to
their customers who are beneficial owners of such shares. The Fund will enter
into agreements with Service Organizations which purchase shares on behalf of
their customers ("Service Agreements"). The Service Agreements will provide for
compensation to the Service Organization in an amount up to 0.25 of 1% (0.20 of
1% in cases where Morgan or an affiliate is the Service Organization) on an
annualized basis of the average daily net asset value of the shares of the Fund
attributable to or held in the name of the Service Organization for its
customers. The services provided by a Service Organization may include acting,
directly or through an agent, as the sole shareholder of record, maintaining or
assisting in maintaining account records for its customers, and processing or
assisting in processing orders to purchase and redeem shares for its customers.
Holders of shares of the Fund will bear all expenses and fees paid to Service
Organizations with respect to such shares as well as any other expenses which
are directly attributable to such shares.
Service Organizations may charge other fees to their customers who are the
beneficial owners of shares in connection with their customer accounts. These
fees would be in addition to any amounts received by the Service Organization
under a Service Agreement and such fees, if any, will affect an investor's
return with respect to an investment in the Fund. Such charges may vary among
Service Organizations but in all cases will be retained by the Service
Organization and not remitted to the Fund.
JPMISUPP-981
