<PAGE>
LETTER TO THE SHAREHOLDERS OF THE PIERPONT MONEY MARKET FUND
July 10, 1995
Dear Shareholder:
During the semi-annual period, the Fund's maturity management, security
selection, and focus on high quality issues helped it outperform IBC/Donoghue's
Taxable Money Fund Average. For the six months ended May 31, 1995, the Fund had
a total return of 2.82%, outperforming IBC/Donoghue's average return of 2.72%.
In addition, as seen in the table on page 4, the Fund has consistently
outperformed this average for the one- , three- , five- and ten-year periods.
The Fund's net asset value remained constant at $1.00 per share. The Fund's net
assets were approximately $2.1 billion on May 31, 1995, compared to $2.0 billion
at the end of November 1994. The net assets of The Money Market Portfolio, in
which the Fund invests, stood at almost $3.0 billion at May 31, 1995.
MARKET REVIEW
The Federal Reserve increased short-term interest rates throughout much of 1994
in order to slow the pace of economic expansion to levels that could be
sustained without increasing inflation. As increasing numbers of investors came
to believe that these actions would accomplish this goal, the money market
portion of the yield curve flattened to 125 basis points by the end of January.
January's retail sales report for the month of December, coupled with more
benign inflation numbers, suggested that the Federal Reserve would tighten
monetary policy at its February 1, 1995 meeting. At that meeting, the central
bank increased both the Fed funds and discount rates by 0.50% (to 6.00% and
5.25%, respectively). The market generally expected these increases and, as a
result, the money market curve underwent additional flattening. Also of note in
February were government reports that seemed to indicate an economic slowdown,
and comments from Federal Reserve Chairman Alan Greenspan which hinted that the
next move might be to ease monetary policy.
The money market yield curve experienced further flattening during the last two
months of the period, as more and more evidence suggested a slowing economy. One
such key indicator was the growth in inventories shown on the April Gross
Domestic Product (GDP) report, which caused us to reduce our expectation
TABLE OF CONTENTS
LETTER TO THE SHAREHOLDERS . . 1 SPECIAL FUND-BASED SERVICES. . 5
FUND FACTS AND HIGHLIGHTS. . . 3 FINANCIAL STATEMENTS . . . . . 7
FUND PERFORMANCE . . . . . . . 4
1
<PAGE>
to below-trend growth for the second quarter. When the Federal Reserve made no
policy changes at the Federal Open Market Committee meeting in May, significant
price fluctuations motivated borrowers to protect themselves with callable
one-year certificates of deposit.
PORTFOLIO REVIEW
Morgan draws upon proprietary research to control the Portfolio's maturity
structure and make security selection decisions. Our portfolio managers invest
in a range of fixed income instruments to increase the potential for higher
returns.
Given our revised estimate for second-quarter growth of less than 1% and our
increased expectation that the Federal Reserve would ease its rates, we
lengthened the Portfolio's target life of 30 days to a range of 45 to 55 days.
By the end of May, the Portfolio had an average life of 56 days, versus 49 days
for the Donoghue average.
The Portfolio benefited from the flattening in the yield curve by maintaining a
barbell strategy. A barbell strategy involves concentrating holdings at either
end of the money market yield curve to achieve a specific target average life.
We avoided callable certificates of deposit because we found them to be costly,
opting instead for one-year U.S. government agency paper, which offered more
relative value.
INVESTMENT OUTLOOK
Going forward, we expect that a decline in interest rates in the weeks ahead
will result in large redemptions in callable certificates of deposits by early
September. We are avoiding the purchase of securities maturing then to avoid
reinvestment risk.
Weak economic data during the second quarter of 1995 seemed to be influenced by
the increase in inventories, but much of this surplus appears to have been
absorbed by now. A 20% increase in housing starts at the end of June suggests
that the 1.50% drop in interest rates, together with a weak dollar, should
maintain positive momentum in the economy over the next few quarters. Given the
shape of the yield curve and our outlook for growth in the coming quarters, we
plan to move to a target maturity of 55 to 60 days.
As always, we welcome your comments or questions. Please call J.P. Morgan Funds
Services toll free at (800) 521-5411.
Sincerely,
/s/ Evelyn E. Guernsey
Evelyn E. Guernsey
J.P. Morgan Funds Services
2
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
The Pierpont Money Market Fund seeks to provide current income, maintain a high
level of liquidity, and preserve capital. It is designed for investors who seek
to preserve capital and earn current income from a portfolio of high-quality
money market instruments.
---------------------------------------------
COMMENCEMENT OF OPERATIONS
10/01/82
---------------------------------------------
NET ASSETS AS OF 5/31/95
$2,102,885,164
---------------------------------------------
DIVIDEND PAYABLE DATES
MONTHLY
---------------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/18/95
EXPENSE RATIO
The Fund's annualized expense ratio of 0.42% covers shareholders' expenses for
custody, tax reporting, investment advisory, and shareholder services, after
reimbursement. The Fund is no-load and does not charge any sales, redemption, or
exchange fees. There are no additional charges for buying, selling, or
safekeeping Fund shares or for wiring redemption proceeds from the Fund.
FUND HIGHLIGHTS
ALL DATA AS OF MAY 31, 1995
PORTFOLIO ALLOCATION
(PERCENTAGE OF TOTAL INVESTMENTS)
Pie chart depicting the allocation of the Fund's investment securities held at
May 31, 1995 by investment categories. The pie is broken in pieces representing
investment categories in the following percentages:
COMMERCIAL PAPER 27.8%
CERTIFICATES OF DEPOSIT 19.7%
U.S. GOVERNMENT AGENCIES 17.8%
REPURCHASE AGREEMENTS 14.3%
FLOATING RATE NOTES 8.5%
TIME DEPOSITS (FOREIGN) 5.3%
CORPORATE BONDS 2.5%
OTHER 4.1%
AVERAGE 7-DAY YIELD
5.72%
AVERAGE MATURITY
56 days
3
<PAGE>
FUND PERFORMANCE
EXAMINING PERFORMANCE
One way to look at performance is to review a fund's average annual total
return. This figure takes the fund's actual (or cumulative) return and shows you
what would have happened if the fund had achieved that return by performing at a
constant rate each year. Average annual total returns represent the average
yearly change in a fund's value over various time periods, typically 1, 5, or 10
years (or since inception). Total returns for periods of less than one year are
not annualized and provide a picture of how a fund has performed over the short
term.
<TABLE>
<CAPTION>
PERFORMANCE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
---------------- -----------------------------------
THREE SIX ONE THREE FIVE TEN
AS OF MAY 31, 1995 MONTHS MONTHS YEAR YEARS YEARS YEARS
------------------------------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Pierpont Money Market Fund 1.45% 2.82% 5.05% 3.72% 4.71% 6.08%
IBC/Donoghue's Taxable Money Fund Avg. 1.39% 2.72% 4.83% 3.52% 4.46% 5.81%
AS OF MARCH 31, 1995
------------------------------------------------------------- ------------------------------------
The Pierpont Money Market Fund 1.38% 2.64% 4.64% 3.61% 4.78% 6.12%
IBC/Donoghue's Taxable Money Fund Avg. 1.35% 2.54% 4.43% 3.40% 4.54% 5.85%
</TABLE>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. ALL FUND RETURNS ARE NET
OF FEES AND ASSUME THE REINVESTMENT OF DISTRIBUTIONS AND REFLECT REIMBURSEMENT
OF CERTAIN FUND AND PORTFOLIO EXPENSES AS DESCRIBED IN THE PROSPECTUS.
IBC/DONOGHUE'S TAXABLE MONEY FUND AVERAGE IS AN AVERAGE OF ALL TAXABLE MAJOR
MONEY MARKET FUND RETURNS. THIS COMPARATIVE INFORMATION IS AVAILABLE TO THE
PUBLIC FROM THE IBC/DONOGHUE ORGANIZATION, INC. NO REPRESENTATION IS MADE THAT
THE INFORMATION GATHERED FROM THIS SOURCE IS ACCURATE OR COMPLETE. THE FUND
INVESTS ALL OF ITS INVESTABLE ASSETS IN THE MONEY MARKET PORTFOLIO, A SEPARATELY
REGISTERED INVESTMENT COMPANY WHICH IS NOT AVAILABLE TO THE PUBLIC BUT ONLY TO
OTHER COLLECTIVE INVESTMENT VEHICLES SUCH AS THE FUND.
4
<PAGE>
SPECIAL FUND-BASED SERVICES
PIERPONT ASSET ALLOCATION SERVICE (PAAS)
For many investors, a diversified portfolio -- including short-term instruments,
bonds, and stocks -- can offer an excellent opportunity to achieve one's
investment objectives. PAAS provides investors with a comprehensive management
program for their portfolios. Through this service, investors can:
- create and maintain an asset allocation that is specifically targeted at
meeting their most critical investment objectives;
- make ongoing tactical adjustments in the actual asset mix of their
portfolios to capitalize on shifting market trends;
- make investments through The Pierpont Funds, a family of diversified mutual
funds.
PAAS is available to clients who invest a minimum of $500,000 in The Pierpont
Funds.
IRA MANAGEMENT SERVICE
As one of the few remaining investments that can help your assets grow
tax-deferred until retirement, the IRA enables more of your dollars to work for
you longer. Morgan offers an IRA Rollover plan that helps you to build well-
balanced long-term investment portfolios, diversified across a wide array of
mutual funds. From money markets to emerging markets, The Pierpont Funds
provide an excellent way to help you accumulate long-term wealth for retirement.
The IRA Rollover plan is available to clients who invest at least $10,000 in any
given Pierpont Fund.
KEOGH
In early 1995, Morgan introduced a Keogh program for its clients. Keoghs provide
another excellent vehicle to help individuals who are self-employed or are
employees of unincorporated businesses to accumulate retirement savings. A Keogh
is a tax-deferred pension plan that can allow you to contribute the lesser of
$30,000 or 25% of your annual earned gross compensation. The Pierpont Funds can
help you build a comprehensive investment program designed to maximize the
retirement dollars in your Keogh account. The Keogh plan also requires a
minimum investment of $10,000 in any given Pierpont Fund.
5
<PAGE>
SIGNATURE BROKER-DEALER SERVICES, INC. IS THE DISTRIBUTOR OF THE PIERPONT MONEY
MARKET FUND (THE "FUND").
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("MORGAN") SERVES AS PORTFOLIO
INVESTMENT ADVISOR AND MAKES THE FUND AVAILABLE SOLELY IN ITS CAPACITY AS
SHAREHOLDER SERVICING AGENT FOR CUSTOMERS. INVESTMENTS IN THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, MORGAN OR ANY OTHER
BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL
AGENCY. ALTHOUGH THE FUND SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE, THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO CONTINUE TO DO SO.
Performance data quoted herein represent past performance. Please remember that
past performance is not a guarantee of future performance. Fund returns are net
of fees. All returns assume the reinvestment of income and reflect the
reimbursement of certain Fund and Portfolio expenses as described in the
Prospectus.
MORE COMPLETE INFORMATION ABOUT THE FUND, INCLUDING MANAGEMENT FEES AND OTHER
EXPENSES, IS PROVIDED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING. YOU MAY OBTAIN ADDITIONAL COPIES OF THE PROSPECTUS BY CALLING J.P.
MORGAN FUNDS SERVICES AT (800) 521-5411.
6
<PAGE>
THE PIERPONT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in The Money Market Portfolio ("Portfolio"), at value
$2,114,302,195
Receivable for Expense Reimbursements (Note 2b)
117,414
Prepaid Expenses
7,235
--------------
Total Assets
2,114,426,844
--------------
LIABILITIES
Dividend Payable
9,822,502
Shareholder Servicing Fee Payable (Note 2c)
1,080,688
Shareholder Servicing and Fund Accounting Services Fee Payable
528,473
Administration Fee Payable (Note 2a)
47,465
Fund Services Payable (Note 2d)
10,302
Accrued Expenses
52,250
--------------
Total Liabilities
11,541,680
--------------
NET ASSETS
Applicable to 2,101,982,124 Shares of Beneficial Interest
Outstanding
(unlimited authorized shares, par value $0.001)
$2,102,885,164
--------------
--------------
Net Asset Value, Offering and Redemption Price Per Share
$1.00
--------------
--------------
ANALYSIS OF NET ASSETS
Paid-In Capital
$2,102,332,940
Accumulated Undistributed Net Realized Gain on Investment
552,224
--------------
Net Assets
$2,102,885,164
--------------
--------------
</TABLE>
See Accompanying Notes.
7
<PAGE>
THE PIERPONT MONEY MARKET FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO (NOTE 1b)
Allocated Interest Income $ 62,532,572
Allocated Portfolio Expenses (2,031,905)
------------
Net Investment Income Allocated from Portfolio 60,500,667
FUND EXPENSES
Shareholder Servicing (Note 2c) $ 1,787,574
Administration Fee (Note 2a) 284,107
Fund Services Fee (Note 2d) 105,033
Transfer Agent Fee 92,381
Trustees' Fees and Expenses (Note 2e) 26,664
Registration Fees 22,817
Professional Fees 15,176
Printing 4,579
Miscellaneous 51,864
-----------
Total Fund Expenses 2,390,195
Less: Reimbursement of Expenses (Note 2b) (49,474)
-----------
NET FUND EXPENSES 2,340,721
------------
NET INVESTMENT INCOME 58,159,946
NET REALIZED GAIN ON INVESTMENTS ALLOCATED FROM PORTFOLIO 603,401
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 58,763,347
------------
------------
</TABLE>
See Accompanying Notes.
8
<PAGE>
THE PIERPONT MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE FISCAL
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 58,159,946 $ 78,882,428
Net Realized Gain (Loss) on Investments Allocated from Portfolio 603,401 (51,177)
---------------- ----------------
Net Increase in Net Assets Resulting from Operations 58,763,347 78,831,251
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (58,159,946) (78,882,428)
---------------- ----------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (AT $1.00 PER
SHARE)
Proceeds from Shares of Beneficial Interest Sold 6,868,647,325 11,776,268,715
Reinvestment of Dividends 53,283,887 73,195,486
Cost of Shares of Beneficial Interest Redeemed (6,823,339,171) (12,408,436,546)
---------------- ----------------
Net Increase (Decrease) from Transactions in Shares of Beneficial
Interest 98,592,041 (558,972,345)
---------------- ----------------
Total Increase (Decrease) in Net Assets 99,195,442 (559,023,522)
NET ASSETS
Beginning of Period 2,003,689,722 2,562,713,244
---------------- ----------------
End of Period $ 2,102,885,164 $ 2,003,689,722
---------------- ----------------
---------------- ----------------
</TABLE>
See Accompanying Notes.
9
<PAGE>
THE PIERPONT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE FISCAL YEAR ENDED NOVEMBER 30,
MAY 31, 1995 ----------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
----------------- -------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------------- -------------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.0278 0.0367 0.0281 0.0371 0.0612 0.0780
Net Realized Gain (Loss) on
Investments Allocated from
Portfolio 0.0000(a) (0.0000)(a) 0.0003 0.0006 0.0002 0.0000
----------------- -------------- ----------- ----------- ----------- -----------
Total from Investment
Operations 0.0278 0.0367 0.0284 0.0377 0.0614 0.0780
----------------- -------------- ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net Investment Income (0.0278) (0.0367) (0.0281) (0.0371) (0.0612) (0.0780)
Net Realized Gain -- -- (0.0003) (0.0006) (0.0002) --
----------------- -------------- ----------- ----------- ----------- -----------
Total Distributions to
Shareholders (0.0278) (0.0367) (0.0284) (0.0377) (0.0614) (0.0780)
----------------- -------------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------------- -------------- ----------- ----------- ----------- -----------
----------------- -------------- ----------- ----------- ----------- -----------
Total Return 2.82%(b) 3.73% 2.89% 3.83% 6.31% 8.09%
----------------- -------------- ----------- ----------- ----------- -----------
----------------- -------------- ----------- ----------- ----------- -----------
RATIOS AND SUPPLEMENTAL DATA
Net Assets at end of Period
(in thousands) $ 2,102,885 $ 2,003,690 $ 2,562,713 $ 2,700,392 $ 3,058,559 $ 2,355,980
Expenses 0.42%(c) 0.43% 0.43% 0.43% 0.43% 0.47%
Net Investment Income 5.58%(c) 3.64% 2.82% 3.74% 6.10% 7.80%
Decrease reflected in
Expense ratio due to
Expense Reimbursements 0.00%(c)(d) 0.01% 0.01% 0.01% 0.01% -0-
<FN>
--------------------------
(a) Less than $0.0001
(b) Not Annualized
(c) Annualized
(d) Less than 0.01%
</TABLE>
See Accompanying Notes.
10
<PAGE>
THE PIERPONT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Pierpont Money Market Fund (the "Fund") is a separate series of The Pierpont
Funds (the "Trust"), a Massachusetts business trust. The Trust is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund, prior to its tax-free reorganization on
July 11, 1993 to a series of the Trust, operated as a stand-alone mutual fund.
Costs related to the reorganization were borne by Morgan Guaranty Trust Company
of New York ("Morgan").
The Fund invests all of its investable assets in The Money Market Portfolio (the
"Portfolio"), a diversified, open-end management investment company having the
same investment objectives as the Fund. The value of such investment included in
the Statement of Assets and Liabilities reflects the Fund's proportionate
beneficial interest in the net assets of the Portfolio (71% at May 31, 1995).
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 gain and
loss and adjusts its investment in the Portfolio each day. All the net
investment income and realized 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)All the Fund's net investment income is declared as dividends daily and
paid monthly. Distributions to shareholders of net realized capital gain,
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 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.
f)For United States Federal income tax purposes the Fund had a capital loss
carryforward at November 30, 1994 of $51,177 which will expire in the year
2002. No capital gains distributions is expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
11
<PAGE>
THE PIERPONT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
g)The Fund adopted Statement of Position 93-2 Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. Accordingly permanent book
and tax differences related to shareholder distributions are reclassified
to paid-in capital.
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 the net assets
of 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 six months ended May 31,
1995, Signature's fee for these services amounted to $284,107.
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 percentage 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 and
the fund services fee exceed the expense limit of 0.043% of the Fund's
average daily net assets, 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
six months ended May 31, 1995, Morgan agreed to reimburse the Fund $49,474
for expenses which exceeded this limit.
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 0.18% of the Fund's average daily net assets up to and
including $1.5 billion and 0.15% of any excess over $1.5 billion. For the
six months ended May 31, 1995, the fee for these services amounted to
$1,787,574.
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 are the sole shareholders of Group. The Fund's allocated
portion of Group's costs in performing its services amounted to $105,033
for the six months ended May 31, 1995.
12
<PAGE>
THE PIERPONT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
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. The Trustees' Fees and
Expenses shown in the financial statements represent the Fund's allocated
portion of the total fees and expenses. 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. The allocated portion
of such compensation and benefits included in the Fund Services Fee shown
in the financial statements was $12,300.
13
<PAGE>
The Money Market Portfolio
Semi-Annual Report May 31, 1995
(unaudited)
(The following pages should be read in conjunction
with The Pierpont Money Market Fund
Semi-Annual Financial Statements)
14
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
---------- ---------------------------------------- ------------------ --------------- --------------
<C> <S> <C> <C> <C>
ASSET-BACKED SECURITY (1.0%)
$28,692 Bank One Auto Trust..................... 05/15/96 6.362% $ 28,691,656
--------------
CERTIFICATES OF DEPOSIT -- DOMESTIC (0.8%)
25,000 Wachovia Bank & Trust Co., N.A. ........ 02/09/96 7.070 25,003,275
--------------
CERTIFICATES OF DEPOSIT -- FOREIGN (16.1%)
45,600 ABN -- AMRO Bank N.V. .................. 08/04/95 6.260 45,603,885
49,000 Bank of Montreal........................ 06/09/95 6.060 49,000,042
45,000 Bank of New York........................ 06/30/95 6.130 45,000,000
15,000 Banque National De Paris................ 07/12/95 6.120 15,000,000
20,000 Bayerische Landesbank................... 08/04/95 6.070 20,000,350
20,000 Canadian Imperial Bank of Commerce...... 06/12/95 6.005 19,999,988
10,000 Credit Suisse........................... 06/26/95 5.530 10,000,066
32,000 Dai ichi Kangyo Bank.................... 06/21/95 6.030 32,000,353
40,000 Fuji Bank Ltd. ......................... 08/02/95 6.120 40,000,000
21,000 Industrial Bank of Japan................ 06/28/95 6.260 21,000,726
8,000 Rabobank Nederland, N.V. ............... 09/05/95 5.850 7,994,784
50,000 Sanwa Bank Ltd. ........................ 06/12/95 -
09/29/95 6.020 - 6.430 50,019,908
60,000 Societe Generale........................ 08/01/95 -
04/12/96 6.060 - 6.600 60,025,091
64,000 Sumitomo Bank Ltd. ..................... 06/07/95 -
06/15/95 6.000 - 6.060 64,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT --
FOREIGN................................ 479,645,193
--------------
COMMERCIAL PAPER (17.2%)
15,000 American Express Credit Corp. .......... 07/03/95 5.990 14,920,133
30,000 AT&T Corp............................... 10/30/95 5.980 29,247,517
22,800 Ameritech Corp. ........................ 07/26/95 5.990 22,591,348
35,000 Bank of Montreal........................ 06/19/95 5.960 34,895,700
34,500 Bankers Trust Corp. .................... 11/06/95 5.940 33,600,585
50,000 C.I.T. Group Holdings Inc. ............. 06/28/95 5.950 49,776,875
21,215 Campbell Soup Co. ...................... 02/01/96 5.900 20,363,159
17,493 Dow Chemical Corp. ..................... 06/01/95 6.125 17,493,000
100,000 Exxon Asset Management.................. 06/02/95 -
06/05/95 5.930 99,958,819
111,000 Ford Motor Corp. ....................... 06/01/95 -
06/08/95 5.940 - 5.970 110,959,507
20,000 Lilly, Eli & Co. ....................... 06/01/95 5.930 20,000,000
50,481 Monsanto Co. ........................... 06/16/95 -
06/19/95 6.070 50,335,621
5,000 Southern California Edison Co. ......... 08/01/95 6.000 4,949,167
3,350 Southwestern Bell Capital Corp. ........ 07/10/95 6.045 3,328,062
--------------
TOTAL COMMERCIAL PAPER.................. 512,419,493
--------------
</TABLE>
See Accompanying Notes.
15
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
---------- ---------------------------------------- ------------------ --------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER -- FOREIGN (10.6%)
$82,232 Abbey National, North America........... 06/05/95 -
09/06/95 5.990 - 6.130% $ 81,571,107
50,000 Canadian Imperial Holdings.............. 06/26/95 5.950 49,793,403
74,130 Commonwealth Bank of Australia.......... 06/02/95 -
09/27/95 5.980 - 6.170 73,114,797
25,000 Deutsche Bank........................... 07/12/95 6.090 24,826,604
86,500 UBS Finance (Delaware), Inc. ........... 06/01/95 6.150 86,500,000
--------------
TOTAL COMMERCIAL PAPER -- FOREIGN....... 315,805,911
--------------
CORPORATE BONDS (2.6%)
15,000 Abbey National Treasury Services PLC.... 12/20/95 7.350 14,987,002
14,000 First Bank N.A. ........................ 07/11/95 6.030 14,000,000
32,000 Ford Motor Credit Co. .................. 11/12/95 6.125 31,812,538
15,000 Wachovia Bank & Trust Co., N.A. ........ 08/07/95 4.300 14,936,608
--------------
TOTAL CORPORATE BONDS................... 75,736,148
--------------
EURO DOLLAR CERTIFICATES OF DEPOSIT (2.8%)
23,000 Commerzbank U.S. Finance Inc. .......... 08/23/95 6.385 22,999,500
50,000 Deutsche Bank........................... 08/08/95 6.370 50,003,358
10,000 Republic Bank of New York............... 11/30/95 7.250 10,000,476
--------------
TOTAL EURO DOLLAR CERTIFICATES OF
DEPOSIT................................ 83,003,334
--------------
FLOATING RATE NOTES (8.5%) (a)
10,000 Bank One Texas, (resets daily to Federal
Funds rate + 15 basis points).......... 06/02/95 6.220 10,000,000
50,000 Bankers Trust New York Corp. (resets
daily to Federal Funds Rate + 18 basis
points)................................ 06/20/95 6.250 49,998,756
34,000 Boatmans First National Bank, (resets
daily to Federal Funds Rate + 17 basis
points)................................ 06/16/95 6.240 33,998,997
50,000 Federal National Mortgage Association
(resets daily to Federal Funds Rate + 5
basis points).......................... 10/16/95 6.020 49,996,267
25,000 Federal National Mortgage Association
(resets daily to Federal Funds Rate + 5
basis points).......................... 02/09/96 6.020 24,994,801
50,000 General Electric Capital Corp. (resets
monthly to one month LIBOR Rate minus
3.125 basis points).................... 10/27/95 6.031 50,000,000
35,000 PNC Bank Pittsburgh (resets Tuesdays, to
Federal Funds Weekly Effective Rate +
10 basis points)....................... 08/04/95 6.120 34,993,933
--------------
TOTAL FLOATING RATE NOTES............... 253,982,754
--------------
</TABLE>
See Accompanying Notes.
16
<PAGE>
THE MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT YIELD TO
(IN MATURITY/ VALUE
THOUSANDS) SECURITY DESCRIPTION MATURITY DATES RATE (NOTE 1a)
---------- ---------------------------------------- ------------------ --------------- --------------
<C> <S> <C> <C> <C>
GOVERNMENT OBLIGATIONS -- FOREIGN (1.2%)
$37,500 Canadian Treasury Bills................. 09/07/95 -
09/28/95 5.940 - 6.100% $ 36,839,424
--------------
TIME DEPOSITS -- FOREIGN (5.4%)
6,775 Banque National de Paris, Grand
Cayman................................. 06/01/95 6.062 6,775,000
52,535 Credit Agricole, Grand Cayman........... 06/01/95 6.125 52,535,000
100,000 Fuji Bank Ltd., Grand Cayman............ 06/01/95 6.156 100,000,000
--------------
TOTAL TIME DEPOSITS -- FOREIGN.......... 159,310,000
--------------
U.S. TREASURY OBLIGATIONS (1.9%)
56,614 United States Treasury Bills............ 06/01/95 -
09/28/95 5.505 - 5.775 56,536,360
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (17.9%)
69,200 Federal Farm Credit Bank................ 06/02/95 -
06/13/95 5.870 - 6.070 69,148,579
161,685 Federal Home Loan Bank.................. 06/01/95 -
05/17/96 5.870 - 6.420 161,606,351
39,542 Federal Home Loan Mortgage Corp......... 06/01/95 -
08/04/95 4.625 - 6.100 39,458,131
224,260 Federal National Mortgage Association... 06/02/95 -
09/20/95 5.870 - 5.970 222,900,924
37,400 Tennessee Valley Authority.............. 06/19/95 5.890 37,289,857
--------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS............................ 530,403,842
--------------
REPURCHASE AGREEMENT (14.4%)
427,885 Goldman Sachs Repurchase Agreement dated
5/31/95 due 6/1/95, proceeds
$427,957,265 (collateralized by
$207,604,000 U.S. Treasury Strips
0.000%, due 2/15/98 -- 2/15/19 valued
at $91,542,396; $125,770,000 U.S.
Treasury Bonds 7.875% -- 14.000%, due
11/15/03 -- 8/15/21 valued at
$178,513,484; $157,986,000 U.S.
Treasury Notes 5.000% -- 9.125% valued
at $166,387,362) (cost $427,885,000)... 06/01/95 6.080 427,885,000
--------------
TOTAL INVESTMENTS (COST $2,985,262,390)
(100.4%) 2,985,262,390
LIABILITIES IN EXCESS OF OTHER ASSETS
(-0.4%) (11,633,984)
--------------
NET ASSETS (100.0%) $2,973,628,406
--------------
--------------
<FN>
(a) The coupon rate shown on floating or adjustable rate securities represents the rate at the end of the period. The
due date on these types of securities reflects the final maturity date.
</TABLE>
See Accompanying Notes.
17
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Amortized Cost and Value (Note 1a) $2,557,377,390
Repurchase Agreement at Cost and Value (Note 1a) 427,885,000
Receivable for Investments Sold 30,155,151
Interest Receivable 10,262,343
Prepaid Insurance 8,560
--------------
Total Assets 3,025,688,444
--------------
LIABILITIES
Payable for Investments Purchased 49,951,710
Financial and Fund Accounting Services Fee Payable (Note 2c) 630,230
Payable to Custodian 590,511
Advisory Fee Payable (Note 2a) 412,340
Custody Fee Payable 394,332
Administration Fee Payable (Note 2b) 15,088
Fund Services Fee Payable (Note 2d) 13,827
Accrued Expenses 52,000
--------------
Total Liabilities 52,060,038
--------------
NET ASSETS
Applicable to Investors' Beneficial Interests $2,973,628,406
--------------
--------------
</TABLE>
See Accompanying Notes.
18
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MAY 31, 1995
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1b)
Interest $82,171,058
EXPENSES
Advisory Fee (Note 2a) $1,871,179
Custodian Fees and Expenses 247,735
Financial and Fund Accounting Services Fee (Note 2c) 240,557
Fund Services Fee (Note 2d) 136,567
Administration Fee (Note 2b) 86,767
Professional Fees 36,025
Trustees' Fees and Expenses (Note 2e) 33,858
Miscellaneous 14,557
----------
Total Expenses 2,667,245
-----------
NET INVESTMENT INCOME 79,503,813
NET REALIZED GAIN ON INVESTMENTS 797,762
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $80,301,575
-----------
-----------
</TABLE>
See Accompanying Notes.
19
<PAGE>
THE MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE FISCAL
ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 79,503,813 $ 94,288,128
Net Realized Gain (Loss) on Investments 797,762 (57,650)
--------------- ----------------
Net Increase in Net Assets Resulting from Operations 80,301,575 94,230,478
--------------- ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 8,393,417,944 13,334,979,866
Withdrawals (8,147,764,992) (13,481,612,327)
--------------- ----------------
Net Increase (Decrease) from Investors' Transactions 245,652,952 (146,632,461)
--------------- ----------------
Total Increase (Decrease) in Net Assets 325,954,527 (52,401,983)
NET ASSETS
Beginning of Period 2,647,673,879 2,700,075,862
--------------- ----------------
End of Period $2,973,628,406 $ 2,647,673,879
--------------- ----------------
--------------- ----------------
</TABLE>
--------------------------------------------------------------------------------
SUPPLEMENTARY DATA
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 12, 1993
FOR THE FOR THE FISCAL (COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OPERATIONS) TO
MAY 31, 1995 NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1994 1993
----------------- ---------------- ----------------
<S> <C> <C> <C>
Ratios to Average Net Assets
Expenses 0.19%(a) 0.20% 0.19%(a)
Net Investment Income 5.79%(a) 3.90% 2.98%(a)
Decrease Reflected in Expense Ratio due to Expense
Reimbursements -- 0.00%(b) --
<FN>
------------------------
(a) Annualized
(b) Less than 0.01%
</TABLE>
See Accompanying Notes.
20
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MAY 31, 1995
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Money Market 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 which was organized as a trust under the laws of
the State of New York. The Portfolio commenced operations on July 12, 1993. The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio.
The following is a summary of the significant accounting policies of the
Portfolio:
a)Investments are valued at amortized cost which approximates market value.
The amortized cost method of valuation values a security at its cost at
the time of purchase and thereafter assumes a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instruments.
The Portfolio's custodian or designated subcustodians, as the case may be,
under triparty repurchase agreements takes possession of the collateral
pledged for investments in repurchase agreements on behalf of the
Portfolio. It is the policy of the Portfolio to value the underlying
collateral daily on a mark-to-market basis to determine that the value,
including accrued interest, is at least equal to the repurchase price plus
accrued interest. In the event of default of the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances,
in the event of default or bankruptcy by the other party to the agreement,
realization and/ or retention of the collateral or proceeds may be subject
to legal proceedings.
b)Securities transactions are recorded on a trade date basis. Investment
income consists of interest income, which includes the amortization of
premiums and discounts. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
c)The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be subject to
taxation 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. The cost of
securities is the same for book and tax purposes.
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 up to $1 billion and 0.10% on
any excess over $1 billion. For the six months ended May 31, 1995, this
fee amounted to $1,871,179.
21
<PAGE>
THE MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
MAY 31, 1995
--------------------------------------------------------------------------------
b)The Portfolio has retained 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 fee 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 to the daily net assets of the Portfolio. For the six
months ended May 31, 1995, Signature's fee for these services amounted to
$86,767.
c)The Portfolio has entered into 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 of the Portfolio, excluding
the advisory fee, custody expenses, fund services fee, and brokerage
costs, exceed the expense limit of 0.03% of the Portfolio's average daily
net assets, 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 six
months ended May 31, 1995, Morgan will receive a fee of $240,557.
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. The
Portfolio's allocated portion of Group's costs in performing its services
amounted to $136,567 for the six months ended May 31, 1995.
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. The Trustees' Fees and
Expenses shown in the financial statements represent the Fund's allocated
portion of the total fees and expenses. 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. The allocated portion
of such compensation and benefits included in the Fund Services Fee shown
in the financial statements was $16,000.
22
<PAGE>
THE PIERPONT MONEY MARKET FUND
THE PIERPONT TAX EXEMPT MONEY MARKET FUND
THE PIERPONT TREASURY MONEY MARKET FUND
THE PIERPONT SHORT TERM BOND FUND
THE PIERPONT BOND FUND
THE PIERPONT TAX EXEMPT BOND FUND
THE PIERPONT NY TOTAL RETURN BOND FUND
THE PIERPONT DIVERSIFIED FUND
THE PIERPONT EQUITY FUND
THE PIERPONT CAPITAL APPRECIATION FUND
THE PIERPONT INTERNATIONAL EQUITY FUND
THE PIERPONT EMERGING MARKETS EQUITY FUND
THE PIERPONT MONEY MARKET FUND
FOR MORE INFORMATION ON HOW THE PIERPONT FAMILY OF FUNDS CAN HELP YOU PLAN FOR
YOUR FUTURE, CALL J.P. MORGAN FUNDS SERVICES AT (800) 521-5411.
THE PIERPONT MONEY MARKET FUND
SEMI-ANNUAL REPORT
MAY 31, 1995
