<PAGE>
THE
PIERPONT
U.S. STOCK FUND
______________________________________________________________________________
ANNUAL REPORT
MAY 31, 1995
<PAGE>
THE PIERPONT U.S. STOCK FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
_______________________________________________________________________________
<TABLE>
<S> <C>
ASSETS
Investment in The U.S. Stock Portfolio ("Portfolio"), at value $100
Receivable for Expense Reimbursements (Note 2b) 2,703
_________
Total Assets 2,803
_________
LIABILITIES
Accrued Expenses 2,700
_________
Total Liabilities 2,700
_________
NET ASSETS
Applicable to 10 Shares of Beneficial Interest Outstanding
(unlimited shares authorized, par value $0.001) $103
_________
_________
Net Asset Value, Offering and Redemption Price Per Share $10.30
_________
_________
ANALYSIS OF NET ASSETS
Paid-In Capital $100
Undistributed Net Investment Income 3
_________
Net Assets $103
_________
_________
</TABLE>
See Accompanying Notes.
<PAGE>
THE PIERPONT U.S. STOCK FUND
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MAY 31, 1995
_______________________________________________________________________________
<TABLE>
<S> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO (NOTE 1b)
Allocated Interest Income $4
Allocated Portfolio Expenses (Net of Reimbursements of $7) (1)
__________
Net Investment Income Allocated from Portfolio 3
FUND EXPENSES
Amortization of Organization Expense (Note 4) $25,944
Professional Fees 2,000
Miscellaneous 700
__________
Total Fund Expenses 28,644
Less: Reimbursement of Expenses (Note 2b) (28,644)
__________
NET FUND EXPENSES 0
__________
NET INVESTMENT INCOME $3
__________
__________
</TABLE>
See Accompanying Notes.
<PAGE>
THE PIERPONT U.S. STOCK FUND
STATEMENT OF CHANGES IN NET ASSETS
______________________________________________________________________________
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 20, 1993
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH
MAY 31, 1995 MAY 31, 1994
______________ ___________________
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $3 $2
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (2) -
______________ ___________________
Total Increase in Net Assets 1 2
NET ASSETS
Beginning of Period 102 100
______________ ___________________
End of Period (including undistributed net investment income
of $3 and $2, respectively) $103 $102
______________ ___________________
______________ ___________________
</TABLE>
______________________________________________________________________________
FINANCIAL HIGHLIGHTS
Selected Data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 20, 1993
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH
MAY 31, 1995 MAY 31, 1994
______________ ___________________
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.20 $10.00
______________ ___________________
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.30 0.20
______________ ___________________
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (0.20) -
______________ ___________________
NET ASSET VALUE, END OF PERIOD $10.30 $10.20
______________ ___________________
______________ ___________________
Total Return 2.94% 2.00%(a)
______________ ___________________
______________ ___________________
RATIOS AND SUPPLEMENTAL DATA
Net Assets at end of Period $103 $102
Ratios to Average Net Assets
Expenses 0.98% 0.00%(b)
Net Investment Income 2.94% 3.25%(b)
Decrease reflected in above Expense Ratio due to
Expense Reimbursements 1.52%(c) 2.50%(b),(c)
<FN>
(a) Not Annualized.
(b) Annualized.
(c) After consideration of certain state limitations.
</TABLE>
See Accompanying Notes.
<PAGE>
THE PIERPONT U.S. STOCK FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
_______________________________________________________________________________
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Pierpont U.S. Stock Fund (the "Fund") is a separate series of The
Pierpont Funds, a Massachusetts business trust (the "Trust"). The Trust
is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Fund commenced
operations on October 20, 1993. SEE NOTE 4 FOR TERMINATION OF OPERATIONS
OF THE FUND.
The Fund invests all of its investable assets in The U.S. Stock
Portfolio (the "Portfolio"), a diversified open-end management
investment company having the same investment objectives as the Fund.
The value of such investment reflects the Fund's proportionate interest
in the net assets of the Portfolio (0.1% at May 31, 1995). The
performance of the Fund is directly affected by the performance of the
Portfolio. The financial statements of the Portfolio, including the
schedule of investments, are included elsewhere in this report and
should be read in conjunction with the Fund's financial statements.
The following is a summary of the significant accounting policies of the
Fund:
a) Valuation of securities by the Portfolio is discussed in note 1 of the
Portfolio's notes to Financial Statements which are included elsewhere
in this report.
b) The Fund records its share of net investment income, realized and
unrealized gain and loss and adjusts its investment in the
Portfolio each day. All the net investment income and realized and
unrealized gain and loss of the Portfolio is allocated pro rata
among the Fund and other investors in the Portfolio at the time of
such determination.
c) Substantially all the Fund's net investment income is declared as
dividends and paid annually. Distributions of realized net capital
gains, if any, are declared and paid annually.
d) Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund intends to comply with the provisions
of the Internal Revenue Code of 1986, as amended, applicable to
regulated investment companies and to distribute substantially all
of its income, including net realized capital gains, if any, within
the prescribed time periods. Accordingly, no provision for federal
income or excise tax is necessary.
e) Expenses incurred by the Trust with respect to any two or more funds
in the Trust are allocated in proportion to the net assets of each
fund in the Trust, except where allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly
attributable to a fund are charged to that fund.
2. TRANSACTIONS WITH AFFILIATES
a) The Trust retains Signature Broker-Dealer Services, Inc. ("Signature")
to serve as Administrator and Distributor. Signature provides
administrative services necessary for the operations of the Fund,
furnishes office space and facilities required for conducting the
business of the Fund and pays the compensation of the Fund's
officers affiliated with Signature. The agreement provides for a
fee to be paid to Signature at an annual rate determined by the
following schedule: 0.04% of the first $1 billion of the aggregate
average daily net assets of the Trust, as well as two other
affiliated fund families for which Signature acts as administrator,
0.032% of the next $2 billion of such net assets, 0.024% of the
next $2 billion of such net assets, and 0.016% of such net assets
in excess of $5 billion. The daily equivalent of the fee rate is
applied daily to the net assets of the Fund. For the fiscal year
ended May 31, 1995, the Fund was not charged a fee by the
Administrator.
<PAGE>
THE PIERPONT U.S. STOCK FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1995
_______________________________________________________________________________
b) The Trust, on behalf of the Fund, has a Financial and Fund Accounting
Services Agreement ("Services Agreement") with Morgan Guaranty
Trust Company of New York ("Morgan") under which Morgan receives a
fee, based on the percentages described below, for overseeing
certain aspects of the administration and operation of the Fund.
The Services Agreement is also designed to provide an expense limit
for certain expenses of the Fund. If total expenses of the Fund,
excluding the shareholder servicing fee, the fund services fee and
amortization of organization expenses, exceed the expense limit of
0.15% of the Fund's average daily net assets up to and including
$100 million and 0.13% of any excess over $100 million, Morgan will
reimburse the Fund for the excess expense amount and receive no
fee. Should such expenses be less than the expense limit, Morgan's
fee would be limited to the difference between such expenses and
the fee calculated under the Services Agreement. For the fiscal
year ended May 31, 1995, Morgan agreed to reimburse the Fund
$28,644 for expenses.
c) The Trust, on behalf of the Fund, has a Shareholder Servicing
Agreement with Morgan. The Agreement provides for the Fund to pay Morgan
a fee for these services which is computed daily and may be paid monthly
at an annual rate of 0.25% of the average daily net assets of the Fund.
For the fiscal year ended May 31, 1995, the Fund was not charged any
Shareholder Servicing fees.
d) The Trust, on behalf of the Fund, has a Fund Services Agreement with
Pierpont Group, Inc. ("Group") to assist the Trustees in exercising
their overall supervisory responsibilities for the Trust's affairs.
The Trustees of the Trust represent all the existing shareholders
of Group. For the fiscal year ended May 31, 1995, no Group costs
were allocated to the Fund.
e) An aggregate annual fee of $65,000 is paid to each Trustee for serving
as a Trustee of the Pierpont Funds, the JPM Institutional Funds,
their corresponding Portfolios and The Series Portfolio. Prior to
April 1, 1995, the aggregate annual Trustee Fee was $55,000. The
Trustee who serves as Chairman and Chief Executive officer of these
Funds and Portfolios also serves as Chairman of Group and received
compensation and employee benefits from Group in his role as
Group's Chairman. For the fiscal year ended May 31, 1995, no
Trustees fees were allocated to the Fund.
3. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest of one or more series. There
were no transactions in shares of beneficial interest of the Fund for the
fiscal year ended May 31, 1995, or for the period October 20, 1993,
(commencement of operations) through May 31, 1994.
4. TERMINATION OF FUND
The Trust terminated the public offering of the Fund's shares on January 2,
1995, and the remaining net assets of the Fund will be distributed to the
sole remaining shareholder, SFG Investors II Limited Partnership. Morgan
has agreed to reimburse the balance of unamortized organizational expenses
at May 31, 1995 of $19,622 (included in reimbursement in Note 2.b above), whose
amortization was accelerated due to the decision to terminate the Fund.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholder of
The Pierpont U.S. Stock Fund
In our opinion, the accompanying statement of assets and liabilities and
the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of The Pierpont U.S. Stock Fund (one of the series constituting part
of The Pierpont Funds, hereafter referred to as the "Fund") at May 31, 1995,
the results of its operations for the year then ended, and the changes in its
net assets and the financial highlights for the year then ended and for the
period October 20, 1993 (commencement of operations) through May 31, 1994,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights' (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As more fully explained in Note 4, the Trustees have resolved and it is
the intention of management to liquidate the Fund.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
July 28, 1995
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
ANNUAL REPORT MAY 31, 1995
(THE FOLLOWING PAGES SHOULD BE READ IN CONJUNCTION
WITH THE PIERPONT U.S. STOCK FUND
ANNUAL FINANCIAL STATEMENTS)
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
SCHEDULE OF INVESTMENTS
MAY 31, 1995
_______________________________________________________________________________
<TABLE>
<CAPTION>
PRINCIPAL VALUE
SHORT-TERM INVESTMENT (97.5%) AMOUNT (NOTE 1a)
______________________________________________ _________ _________
<S> <C> <C>
U.S. GOVERNMENT TREASURY OBLIGATION (97.5%)
United States Treasury Bill
5.485% due 06/29/95 (amortized cost $115,505) $116,000 $115,505
_________
TOTAL INVESTMENTS (97.5%) 115,505
OTHER ASSETS NET OF LIABILITIES (2.5%) 2,958
_________
NET ASSETS (100.0%) $118,463
_________
_________
</TABLE>
See Accompanying Notes.
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
_______________________________________________________________________________
<TABLE>
<S> <C>
ASSETS
Investment at Value (Amortized Cost $115,505) (Note 1a) $115,505
Cash 778
Receivable for Expense Reimbursement (Note 2c) 5,604
_________
Total Assets 121,887
_________
LIABILITIES
Advisory Fee Payable (Note 2a) 372
Accrued Expenses 3,052
_________
Total Liabilities 3,424
_________
NET ASSETS
Applicable to Investors' Beneficial Interests $118,463
_________
_________
</TABLE>
See Accompanying Notes.
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MAY 31, 1995
______________________________________________________________________________
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest Income $5,073
EXPENSES
Amortization of Organization Expenses (Note 4) $4,402
Professional Fees 2,500
Advisory Fee (Note 2a) 208
Custodian Fees and Expenses 62
Miscellaneous 402
___________
Total Expenses 7,574
Less: Reimbursement of Expenses (Note 2c) (7,200)
___________
Net Expenses 374
___________
NET INVESTMENT INCOME 4,699
NET REALIZED GAIN ON INVESTMENTS 4
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,703
___________
___________
</TABLE>
See Accompanying Notes.
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
STATEMENT OF CHANGES IN NET ASSETS
______________________________________________________________________________
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 8, 1993
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
MAY 31, 1995 MAY 31, 1994
______________ ___________________
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $4,699 $2,487
Net Realized Gain (Loss) on Investments 4 (1)
______________ ___________________
Net Increase in Net Assets Resulting from Operations 4,703 2,486
______________ ___________________
TRANSACTION IN INVESTOR'S BENEFICIAL INTERESTS
Contributions 16,770 -
Withdrawals (3,515) (2,081)
______________ ___________________
Net Increase (Decrease) from Investors' Transactions 13,255 (2,081)
______________ ___________________
Total Increase in Net Assets 17,958 405
NET ASSETS
Beginning of Period 100,505 100,100
______________ ___________________
End of Period $118,463 $100,505
______________ ___________________
______________ ___________________
</TABLE>
______________________________________________________________________________
SUPPLEMENTARY DATA
______________________________________________________________________________
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 8, 1993
FOR THE FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
MAY 31, 1995 MAY 31, 1994
______________ ___________________
<S> <C> <C>
Ratios to Average Net Assets
Expenses 0.36% 0.36%*
Net Investment Income 4.52% 2.75%*
Decrease reflected in above Expense
Ratio due to Expense Reimbursements 6.93% 13.43%*
Portfolio Turnover 0% 0%
<FN>
*Annualized
</TABLE>
See Accompanying Notes.
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
_______________________________________________________________________________
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The U.S. Stock Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended, (the "Act") as a no-load,
diversified, open-end management investment company organized as a
trust under the laws of the State of New York. The Portfolio commenced
operations on July 8, 1993. The Declaration of Trust permits the Trustees
to issue an unlimited number of beneficial interests in the Portfolio.
SEE NOTE 4 FOR TERMINATION OF OPERATIONS OF THE PORTFOLIO.
The following is a summary of the significant accounting policies of the
Portfolio:
a) The value of each security for which readily available market
quotations exists is based on a decision as to the broadest and most
representative market for such security. The value of such security will
be based either on the last sale price on a national securities
exchange, or, in the absence of recorded sales, at the average of the
readily available closing bid and ask prices on such exchanges. Unlisted
securities are valued at the average of the quoted bid and asked prices
in the over-the-counter market. Securities or other assets for which
market quotations are not readily available are valued at fair value
in accordance with procedures established by the Portfolio's Trustees.
Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. All portfolio securities with
a remaining maturity of less than 60 days are valued by the amortized
cost method.
b) Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date. Interest income, which
includes the amortization of premiums and discounts, if any, is recorded
on an accrual basis. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
c) The Portfolio intends to be treated as a partnership for federal
income tax purposes. As such, each investor in the Portfolio will be
taxed on its share of the Portfolio's ordinary income and capital gains.
It is intended that the Portfolio's assets will be managed in such a way
that an investor in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code.
2. TRANSACTIONS WITH AFFILIATES
a) The Portfolio has an investment advisory agreement with Morgan
Guaranty Trust Company of New York ("Morgan"). Under the terms of the
investment advisory agreement, the Portfolio pays Morgan at an annual
rate of 0.20% of the Portfolio's average daily net assets. For the
fiscal year ended May 31, 1995 such fees amounted to $208.
<PAGE>
THE U.S. STOCK PORTFOLIO (IN LIQUIDATION)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1995
_______________________________________________________________________________
b) The Portfolio retains Signature Broker-Dealer Services, Inc.
("Signature") to serve as Administrator and exclusive placement
agent. Signature provides administrative services necessary for the
operations of the Portfolio, furnishes office space and facilities
required for conducting the business of the Portfolio and pays the
compensation of the Portfolio's officers affiliated with Signature.
The agreement provides for a fee to be paid to Signature at an
annual rate determined by the following schedule: 0.01% of the
first $1 billion of the aggregate average daily net assets of the
Portfolio and the other portfolios subject to the Administrative
Services Agreement, 0.008% of the next $2 billion of such net
assets, 0.006% of the next $2 billion of such net assets, and
0.004% of such net assets in excess of $5 billion. The daily
equivalent of the fee rate is applied daily to the net assets of
the Portfolio. For the fiscal year ended May 31, 1995 no
administration fees were allocated to the Portfolio.
c) The Portfolio has a Financial and Fund Accounting Services Agreement
("Services Agreement") with Morgan under which Morgan receives a
fee, based on the percentages described below, for overseeing
certain aspects of the administration and operation of the
Portfolio. The Services Agreement is also designed to provide an
expense limit for certain expenses of the Portfolio. If total
expenses for the Portfolio, excluding the advisory fee, custody
expenses, fund services fee, amortization of organization expenses,
and brokerage costs, exceed the expense limit of 0.10% of the
Portfolio's average daily net assets up to $200 million, 0.05% on
the next $200 million of average daily net assets, and 0.03% of net
assets thereafter, Morgan will reimburse the Portfolio for the
excess expense amount and receive no fee. Should such expenses be
less than the expense limit, Morgan's fee would be limited to the
difference between such expenses and the fee calculated under the
Services Agreement. For the fiscal year ended May 31, 1995, Morgan
agreed to reimburse the Portfolio $2,798 for excess expenses. In
addition to the expenses that Morgan assumes under Services
Agreement, Morgan has agreed to reimburse the Portfolio to the
extent necessary to maintain the total operating expenses of the
Portfolio, at no more than 0.36% of the average daily net assets of
the Portfolio through May 31, 1995. For the fiscal year ended May 31,
1995, Morgan has agreed to reimburse the Portfolio $4,402 for expenses
which exceeded this limit.
d) The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall supervisory
responsibilities for the Portfolio's affairs. The Trustees of the
Portfolio represent all the existing shareholders of Group. For the
fiscal year ended May 31, 1995, no Group costs were allocated to the
Portfolio.
e) An aggregate annual fee of $65,000 is paid to each Trustee for serving
as a Trustee of The Pierpont Funds, The JPM Institutional Funds, their
corresponding Portfolios, and The Series Portfolio. Prior to April 1,
1995, the aggregate annual Trustee Fee was $55,000. The Trustee who
serves as Chairman and Chief Executive Officer of these Funds and
Portfolios also serves as Chairman of Group and received compensation
and employee benefits from Group in his role as Group's Chairman. For
the fiscal year ended May 31, 1995, no Trustees fees were allocated to
the Portfolio.
3. INVESTMENT TRANSACTIONS
There were no investment transactions (excluding short-term investments)
for the fiscal year ended May 31, 1995.
4. TERMINATION OF PORTFOLIO
The Trustees, at a meeting on October 12-13, 1994, approved a resolution
to terminate the Portfolio as an investment company under the Investment
Company Act of 1940. Morgan has agreed to reimburse the balance of
unamortized organizational expenses at May 31, 1995 of $3,329 (included in
reimbursement in Note 2.c above), whose amortization was accelerated due to
the decision to terminate the Portfolio.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors of
The U.S. Stock Portfolio (In Liquidation)
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the supplementary data present
fairly, in all material respects, the financial position of The U.S. Stock
Portfolio (In Liquidation) (the "Portfolio") at May 31, 1995, the results of
its operations for the year then ended, and the changes in its net assets and
its supplementary data for the year then ended and for the period July 8,
1993 (commencement of operations) through May 31, 1994, in conformity with
generally accepted accounting principles. These financial statements and
supplementary data (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at May 31, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
As more fully explained in Note 4, the Trustees have resolved and it is the
intention of management to liquidate the Portfolio.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
July 28, 1995
