July, 1998
Dear fellow shareholder:
We are writing to inform you that we need your vote on matters of importance to
your investments in J.P. Morgan Fund(s). Several issues will be decided at a
meeting of share-holders on August 20, 1998, and we must receive your vote prior
to that date.
These proposals involve modernizing outdated investment restrictions as well as
changing the fund's investment advisor to J.P. Morgan Investment Management. The
recommended changes will allow the funds greater investment flexibility, and
provide broader market recognition.
As a shareholder your vote is important to the fund, and determines how
effectively we can manage the fund. The Board of Trustees have unanimously
approved the proposals and recommend that you vote yes to all proposals. In
order to make voting as easy as possi-ble, please call 1-800-290-6429 to record
your vote over the phone. Please have your account number and social security or
tax identification number available when you call.
The attached Q&A explains the proposals in more detail. Please call J.P. Morgan
Funds Services at 1-800-521-5411 if you have additional questions about the
proposals, or if you would like to receive an additional copy of the complete
proxy proposal previously mailed.
Thank you in advance for taking this matter seriously and for voting quickly.
Sincerely,
/s/ Ramon de Oliveira /s/ Keith M. Schappert
Ramon de Oliveira Keith M. Schappert
Chairman of Asset Management Services President of Asset Management Services
J.P. Morgan & Co. Incorporated J.P. Morgan & Co. Incorporated
<PAGE>
Questions and answers about the August 20th shareholder vote
1. Why am I being asked to re-elect the Board of Trustees?
Periodically, mutual fund shareholders are asked to elect their Board of
Trustees. Each of the nominees currently serves as a Trustee of the funds. They
are Frederick S. Addy, William G. Burns, Arthur C. Eschenlauer, Matthew Healey,
and Michael P. Mallardi.
2. Why am I being asked to adopt standardized fundamental investment
restrictions?
Presently, the funds have fundamental investment restrictions -- restrictions
that may only be changed by a shareholder vote -- that are not consistent across
the funds. Many of these restrictions reflect outdated legal, regulatory, or
industry conditions or practices. By updating and standardizing the
restrictions, the Board of Trustees seeks to promote greater efficiency in the
management of the funds. As regulatory and industry practices change in the
future, your funds will be better able to respond to those changes without the
delay and expense of a shareholder vote.
3. Why am I being asked to approve the reclassification of certain fund
investment objectives?
Some of the funds' investment objectives were adopted as fundamental policies
and therefore may be changed only by a shareholder vote. In order to respond
more quickly to market or regulatory changes, without the costs associated with
a shareholder meeting, the trustees propose that these funds reclassify their
investment objectives as non-fundamental. This would allow these fund objectives
to be changed with the approval of the Trustees.
4. What changes are being proposed regarding the investment advisory
arrangements?
Currently, Morgan Guaranty Trust serves as investment advisor to the funds. The
Trustees propose changing the investment advisor to J.P. Morgan Investment
Management. The proposed change would not affect the funds investments and would
not involve a change in the personnel providing advisory services to the funds.
The change should enhance fund marketing because of J.P. Morgan's greater name
recognition.
5. Why am I being asked to amend the Declarations of Trust to provide for
dollar-based voting rights?
Currently, each share is entitled to one vote, regardless of the dollar value of
the shares of each fund. As the net asset values of each fund diverge over time,
voting rights become less equitable. The proposed amendment would provide voting
rights based on the amount of money a shareholder has invested in the funds. As
a result, voting power would be allocated according to the value of each
shareholder's investment.
6. Why am I being asked to ratify the independent accountants?
A fund is required to submit for ratification the Trustees selection of
independent accountants at the next shareholder meeting held after such
selection. The Trustees recommend the approval of the funds' current independent
accountants, PricewaterhouseCoopers LLP.
For more information on these proposals, please call J. P. Morgan Funds Services
at 1-800-521-5411. To vote on these proposals by phone, please call D.F. King &
Co., Inc., our proxy solicitor at 1-800-290-6429.
The Trustees recommend that you vote FOR all of the proposals.
