<PAGE>
LETTER TO THE SHAREHOLDERS OF THE PIERPONT SHORT TERM BOND FUND
June 15, 1995
Dear Shareholder:
We are pleased to report that The Pierpont Short Term Bond Fund returned 3.88%
versus the Composite Short-Term Bond Fund Average* of 3.67% for the six months
ended April 30, 1995. At the beginning of the period, we maintained a short
Portfolio duration relative to the Merrill Lynch 1-3 Year Treasury Index as we
believed the economy would continue to grow rapidly. However, this cautious
position caused the Fund to underperform the Index when economic growth slowed
and rates began to fall earlier than most market participants expected. At the
end of the first quarter, we began to extend the Portfolio's duration to a
neutral position relative to the Index, which has added value to performance
since March.
The Fund's net asset value went from $9.60 on October 31, 1994 to $9.68 at the
end of April, after paying approximately $0.29 per share in dividends during the
period. The Fund's net assets stood at $8.7 million at the end of the reporting
period. The net assets of The Short Term Bond Portfolio, in which the Fund
invests, totaled $62.4 million on April 30, 1995.
MARKET ENVIRONMENT
After the Federal Reserve raised the Federal funds rate by 0.75% at the end of
1994, yields rose on Treasuries of all maturities. As seen in the accompanying
graph, the three-month to two-year part of the Treasury yield curve steepened
sharply by the end of December. Specifically, on December 30, 1994, the yield on
the two-year Treasury was only 14 basis points lower than the yield provided by
the five-year Treasury. In addition, the difference in yield between two- and
30-year Treasuries narrowed to only 19 basis points.
Then, the U.S. economy began showing signs of a slowdown after the Federal
Reserve raised rates again in January. In this environment, the short-term part
of the yield curve (three-month to two-year maturities) flattened. As investors
became convinced that additional rate increases by the Federal Reserve were
unlikely for some time, Treasury yields declined again in April. At the same
time, mortgages and corporates outperformed Treasuries.
PORTFOLIO REVIEW
The Portfolio's investment process involves three key decisions: DURATION
MANAGEMENT, SECTOR ALLOCATION, and SECURITY SELECTION. This diversified approach
is designed to help consistently add value under all market conditions.
TABLE OF CONTENTS
LETTER TO THE SHAREHOLDERS . . . . . . . . .1
FUND FACTS AND HIGHLIGHTS. . . . . . . . . .3
FUND PERFORMANCE . . . . . . . . . . . . . .4
SPECIAL FUND-BASED SERVICES. . . . . . . . .5
FINANCIAL STATEMENTS . . . . . . . . . . . .7
1
<PAGE>
TREASURY YIELD CURVE
DECEMBER 30, 1994 VERSUS MAY 1, 1995
[Line Graph]
SOURCE: BLOOMBERG
DURATION MANAGEMENT. Duration is the measurement of a fund's sensitivity to
interest rate changes, which is closely related to the average maturity of the
bonds in a portfolio. As mentioned previously, in 1994, we positioned the
Portfolio defensively with a target duration that was four-tenths of a year
shorter than the Index as we expected continued strong economic growth and
higher interest rates. When rates fell during the first quarter of 1995, we
extended the target duration of the Portfolio to a near-neutral position
relative to the Index.
SECTOR ALLOCATION. Sector allocation had a positive effect on performance for
the period. At the end of April, the Portfolio had invested over half of its
assets in high-quality (A or better) corporate bonds, mortgage obligations,
agencies, and asset-backed securities, which offered higher yields than
comparable maturity Treasuries.
SECURITY SELECTION. Viewed overall, individual security selection (particularly
in corporates, mortgages, and asset-backed securities) also added value to Fund
performance during the period. Moreover, the Portfolio continued to focus on
high-quality bonds and maintained an average credit quality of AAA.
INVESTMENT OUTLOOK
We expect to maintain close-to-neutral duration, as we await further indications
regarding the future direction of interest rates. We plan to keep our allocation
of approximately over half of the Portfolio in high-quality, higher-yielding
non-Treasuries, such as corporates and mortgages, as we expect these securities
to outperform Treasuries in the months ahead.
As always, we welcome your comments or questions. Please call J.P. Morgan Funds
Services toll free at (800) 521-5411.
Sincerely yours,
/s/ EVELYN E. GUERNSEY
Evelyn E. Guernsey
J.P. Morgan Funds Services
*THE COMPOSITE SHORT-TERM BOND FUND AVERAGE PERFORMANCE IS COMPUTED ON ALL FUNDS
IN THE MORNINGSTAR UNIVERSE HAVING A GENERAL CORPORATE BOND OBJECTIVE AND A
SHORT-TERM MATURITY.
2
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
The Pierpont Short Term Bond Fund seeks to provide high total return while
attempting to limit the likelihood of negative quarterly returns. It is designed
for investors who do not require the stable net asset value typical of a money
market fund, but who seek less price fluctuation than is typical of a long-term
bond fund.
- ---------------------------------------------
COMMENCEMENT OF OPERATIONS
7/8/93
- ---------------------------------------------
NET ASSETS AS OF 4/30/95
$8,736,879
- ---------------------------------------------
DIVIDEND PAYABLE DATES
MONTHLY
- ---------------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/18/95
EXPENSE RATIO
The Fund's current annualized expense ratio of 0.67% 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 APRIL 30, 1995
[PIE CHART]
PORTFOLIO ALLOCATION
(PERCENTAGE OF TOTAL INVESTMENTS)
Pie chart depicting allocation of the Fund's investment securities held at
April 30, 1995 by investment category. The chart is broken in pieces to
represent in the following percentages:
CORPORATE DEBT OBLIGATIONS 29.9%
U.S. GOVERNMENT AGENCIES 29.8%
U.S. TREASURIES 24.7%
COLLATERALIZED MORTGAGE OBLIGATIONS AND ASSET BACKED SECURITIES 13.9%
FOREIGN GOVERNMENT OBLIGATIONS 1.7%
30-DAY SEC YIELD
5.93%
DURATION
1.7 YEARS
QUALITY BREAKDOWN
AAA* 70%
AA 9%
A 12%
Other 9%
*INCLUDES U.S. GOVERNMENT AGENCY AND TREASURY OBLIGATIONS
3
<PAGE>
FUND PERFORMANCE
EXAMINING PERFORMANCE
There are several ways to evaluate a mutual fund's historical performance
record. One approach is to look at the growth of a hypothetical investment of
$10,000. The chart at right shows that $10,000 invested at the Fund's inception
would have grown to $10,550 at April 30, 1995.
Another 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 of 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.
GROWTH OF $10,000 SINCE INCEPTION*
JULY 8, 1993 -- APRIL 30, 1995
[Line Graph]
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from July 8, 1993
(inception) to April 30, 1995; the second line represents the growth of a ten
thousand dollar investment in a portfolio of securities reflecting the
composition of the Merrill Lynch 1-3 Year Treasury Index for the same time
period. The graph points are as follows:
<TABLE>
DATE FUND MERRILL LYNCH
- ------------------------------------------
<S> <C> <C>
07/93 $10,000 $10,000
10/93 10,094 10,140
10/94 10,156 10,261
04/95 10,594 10,676
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
---------------------------------------------------------------------------
THREE YEAR ONE FIVE SINCE
AS OF APRIL 30, 1995 MONTHS TO DATE YEAR YEARS INCEPTION*
- ------------------------------------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C>
The Pierpont Short Term Bond Fund 2.88% 4.05% 5.33% -- 3.16%
Merrill Lynch 1-3 Year Treasury Index 2.85% 4.28% 5.77% -- 3.81%
Composite Short-Term Bond Fund Average 2.78% 3.82% 4.84% -- 2.99%
AS OF MARCH 31, 1995
- ------------------------------------------------------------------- ----------------------------------------
The Pierpont Short Term Bond Fund 3.00% 3.00% 3.67% -- 2.69%
Merrill Lynch 1-3 Year Treasury Index 3.36% 3.36% 4.47% -- 3.45%
Composite Short-Term Bond Fund Average 2.82% 2.82% 3.39% -- 2.55%
<FN>
*7/8/93 -- COMMENCEMENT OF OPERATIONS (AVERAGE ANNUAL TOTAL RETURNS BASED ON THE
MONTH END FOLLOWING INCEPTION)
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. ALL RETURNS ASSUME THE
REINVESTMENT OF DISTRIBUTIONS AND REFLECT REIMBURSEMENT OF CERTAIN FUND AND
PORTFOLIO EXPENSES AS DESCRIBED IN THE PROSPECTUS. THE COMPOSITE SHORT-TERM BOND
FUND AVERAGE PERFORMANCE IS COMPUTED ON ALL FUNDS IN THE MORNINGSTAR UNIVERSE
HAVING A GENERAL CORPORATE BOND OBJECTIVE AND A SHORT-TERM MATURITY.
MORNINGSTAR, INC. IS A LEADING RESOURCE FOR MUTUAL FUND DATA. ALTHOUGH GATHERED
FROM RELIABLE SOURCES, DATA ACCURACY AND COMPLETENESS CANNOT BE GUARANTEED. THE
PIERPONT SHORT TERM BOND FUND INVESTS ALL OF ITS INVESTABLE ASSETS IN THE SHORT
TERM BOND PORTFOLIO, A SEPARATELY REGISTERED INVESTMENT COMPANY WHICH IS NOT
AVAILABLE TO THE PUBLIC BUT ONLY TO OTHER COLLECTIVE INVESTMENT VEHICLES SUCH AS
THE FUND.
</TABLE>
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>
THE FUND'S DISTRIBUTOR IS SIGNATURE BROKER-DEALER SERVICES, INC.
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("MORGAN") SERVES AS PORTFOLIO
INVESTMENT ADVISOR AND MAKES THE PIERPONT SHORT TERM BOND FUND (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. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND CAN FLUCTUATE, SO AN INVESTOR'S SHARES WHEN REDEEMED MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
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, assume the reinvestment of Fund distributions, and reflect the
reimbursement of Fund expenses. Had expenses not been subsidized, returns would
have been lower. The Fund invests all of its investable assets in The Short Term
Bond Portfolio, a separately registered investment company which is not
available to the public but only to other collective investment vehicles such as
the Fund.
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 SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in The Short Term Bond Portfolio ("Portfolio"), at value (Note 1) $ 8,761,551
Deferred Organization Expenses (Note 1d) 19,920
Receivable for Expense Reimbursements (Note 2b) 878
Receivable for Fund Shares Sold 2,055
Prepaid Expenses 29
-----------
Total Assets 8,784,433
-----------
LIABILITIES
Dividend Payable to Shareholders 8,171
Shareholder Servicing Fee Payable (Note 2c) 7,236
Administration Fee Payable (Note 2a) 200
Fund Services Fee Payable (Note 2d) 90
Accrued Expenses 31,857
-----------
Total Liabilities 47,554
-----------
NET ASSETS
Applicable to 902,944 Shares of Beneficial Interest Outstanding $ 8,736,879
(unlimited authorized shares, par value $0.001)
-----------
-----------
Net Asset Value, Offering and Redemption Price Per Share $9.68
-----------
-----------
ANALYSIS OF NET ASSETS
Paid-in Capital $ 8,915,048
Undistributed Net Investment Income 348
Accumulated Net Realized Loss on Investment (158,478)
Net Unrealized Depreciation of Investment (20,039)
-----------
Net Assets $ 8,736,879
-----------
-----------
</TABLE>
See Accompanying Notes.
7
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO (NOTE 1B)
$ 261,955
Allocated Interest Income
8,103
Allocated Dividend Income
(15,476)
Allocated Portfolio Expenses (Net of Reimbursement of $2,033)
---------
254,582
Net Investment Income Allocated from Portfolio
FUND EXPENSES
Printing $15,005
Transfer Agent Fees 10,059
Registration Fees 10,023
Shareholder Servicing Fee (Note 2c) 7,236
Professional Fees 6,014
Amortization of Organization Expense (Note 1d) 3,148
Administration Fee (Note 2a) 1,089
Fund Services Fee (Note 2d) 411
Trustees' Fees and Expenses (Note 2e) 108
Miscellaneous 953
---------
Total Fund Expenses 54,046
Less: Reimbursement of Expenses (Note 2b) (42,588)
---------
11,458
NET FUND EXPENSES
---------
243,124
NET INVESTMENT INCOME
(10,387)
NET REALIZED LOSS ON INVESTMENTS ALLOCATED FROM PORTFOLIO
101,134
NET CHANGE IN UNREALIZED DEPRECIATION OF INVESTMENTS ALLOCATED FROM
PORTFOLIO
---------
$ 333,871
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
---------
---------
</TABLE>
See Accompanying Notes.
8
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS FOR THE FISCAL
ENDED APRIL YEAR ENDED
30, 1995 OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1994
----------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net Investment Income $ 243,124 $ 281,358
Net Realized Loss on Investments Allocated from Portfolio (10,387) (162,989)
Net Change in Unrealized Depreciation of Investments
Allocated from Portfolio 101,134 (108,850)
----------- ---------------
Net Increase in Net Assets Resulting from Operations 333,871 9,519
----------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (243,087) (281,047)
----------- ---------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (NOTE 3)
Proceeds from Shares of Beneficial Interest Sold 6,527,576 7,029,325
Reinvestment of Dividends 197,475 263,265
Cost of Shares of Beneficial Interest Redeemed (4,086,512) (7,855,963)
----------- ---------------
Net Increase (Decrease) from Transactions in Shares of
Beneficial Interest 2,638,539 (563,373)
----------- ---------------
Total Increase (Decrease) in Net Assets 2,729,323 (834,901)
NET ASSETS
Beginning of Period 6,007,556 6,842,457
----------- ---------------
End of Period (Including Undistributed Net Investment
Income of $348 and $311, respectively) $8,736,879 $ 6,007,556
----------- ---------------
----------- ---------------
</TABLE>
See Accompanying Notes.
9
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE
PERIOD
JULY 8, 1993
(COMMENCEMENT
FOR THE SIX OF
MONTHS ENDED OPERATIONS)
APRIL 30, FOR THE FISCAL THROUGH
1995 YEAR ENDED OCTOBER 31,
(UNAUDITED) OCTOBER 31, 1994 1993
------------ ---------------- -------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.60 $ 9.99 $10.00
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.29 0.45 0.10
Net Realized and Unrealized Gain (Loss) on Investment 0.08 (0.39) (0.01)
------ ------ ------
Total from Investment Operations 0.37 0.06 0.09
------ ------ ------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income (0.29) (0.45) (0.10)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.68 $ 9.60 $ 9.99
------ ------ ------
------ ------ ------
Total Return 3.88%(a) 0.61% 0.94%(a)
------ ------ ------
------ ------ ------
RATIOS AND SUPPLEMENTAL DATA
Net Assets at End of Period (in Thousands) $8,737 $6,008 $6,842
Ratios to Average Net Assets:
Expenses 0.67%(b) 0.69% 0.67%(b)
Net Investment Income 6.05%(b) 4.49% 3.44%(b)
Decrease Reflected in above Expense Ratio due to Expense Reimbursements by
Morgan 1.11%(b) 1.36% 2.80%(b)
<FN>
- --------------
(a) Not annualized.
(b) Annualized.
</TABLE>
See Accompanying Notes.
10
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Pierpont Short Term Bond 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 July 8, 1993.
The Fund invests all of its investable assets in The Short Term Bond 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
(14% at April 30, 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 daily and paid monthly. Distributions to shareholders of net
realized capital gain, if any, are declared and paid annually.
d)The Fund incurred organization expenses in the amount of $31,753. These
costs were deferred and are being amortized by the Fund on a straight-line
basis over a five-year period from the commencement of operations.
e)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.
f)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.
g)The Fund has 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 relating to shareholder
11
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
distributions are reclassified to paid-in capital. For the fiscal year
ended October 31, 1994, the Fund reclassified $15,493 to accumulated net
realized loss on investments from paid-in capital. Net investment income,
net realized gain and net assets were not affected by this change.
h)For United States Federal income tax purposes, the Fund had a capital loss
carryforward at October 31, 1994 of $146,463 which will expire in the year
2002. No capital gains distribution is expected to be paid to shareholders
until future net gains have been realized in excess of such carryforward.
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 six months ended April 30, 1995, Signature's fee for
these services amounted to $1,089.
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, the
fund services fee and amortization of organization expenses, exceed the
expense limit of 0.12% of the first $100 million of the Fund's average
daily net assets and 0.10% of average daily net assets 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 six months ended April
30, 1995, Morgan agreed to reimburse the Fund $38,427 for excess expenses.
In addition to the expenses that Morgan assumes under the Services
Agreement, Morgan has agreed to reimburse the Fund to the extent necessary
to maintain the total operating expenses of the Fund, including the
expenses allocated to the Fund from the Portfolio, at no more than 0.67%
of the average daily net assets of the Fund through October 31, 1995. For
the six months ended April 30, 1995, Morgan has agreed to reimburse the
Fund $4,161 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 average daily net assets of the Fund. For the
six months ended April 30, 1995, the fee for these services amounted to
$7,236.
12
<PAGE>
THE PIERPONT SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
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. The Fund's
allocated portion of Group's costs in performing its services amounted to
$411 for the six months ended April 30, 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 and their
corresponding Portfolios. The Trustees' Fees and Expenses shown in the
financial statements represents 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
$100.
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.
Transactions in shares of beneficial interest of the Fund were as follows:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE
ENDED FISCAL YEAR
APRIL 30, ENDED
1995 OCTOBER 31, 1994
------------- ----------------
<S> <C> <C>
Shares sold 682,109 714,366
Reinvestments of dividends 20,601 26,946
Shares redeemed (425,621) (800,489)
------------- --------
Net increase (decrease) 277,089 (59,177)
------------- --------
------------- --------
</TABLE>
13
<PAGE>
The Short Term Bond Portfolio
Semi-Annual Report April 30, 1995
(unaudited)
(The following pages should be read in conjunction
with The Pierpont Short Term Bond Fund
Semi-Annual Financial Statements)
14
<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MOODY'S/S&P VALUE
AMOUNT SECURITY DESCRIPTION RATING (NOTE 1A)
- --------------- ------------------------------------------------------------ ----------- -----------
<C> <S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS
AND ASSET BACKED SECURITIES (13.3%)
FINANCE (13.3%)
$ 977,148 Equicon Home Equity Loan Trust, Series 1992-7, Remic:
Sequential Payer, Class A, 5.90% due 09/18/05.............
Aaa/AAA $ 933,763
764,701 Fleetwood Credit Corp. Grantor Trust, Series 1994-A, Class
A, 4.70% due 07/15/09.....................................
Aaa/AAA 720,014
1,293,136 Ford Credit Grantor Trust, Series 1994-B, Class A, 7.30% due
10/15/99..................................................
Aaa/AAA 1,300,378
878,073 Merrill Lynch Mortgage Investors, Inc., Series 1994-C1,
Class A, 8.72% due 11/25/20...............................
Aaa/AAA 898,378
1,000,000 Premier Auto Trust, Series 1994-4, Class A3, 6.20% due
10/02/97..................................................
Aaa/AAA 989,400
1,500,000 Premier Auto Trust, Series 1994-3, Class A6, 6.85% due
03/02/99..................................................
Aaa/AAA 1,495,200
986,552 Residential Funding Mortgage Securities Inc., Series
1993-S49, Class A1, 6.00% due 12/25/08....................
Aaa/AAA 966,742
1,000,000 Queens Center Funding Corp., Class B, 144A,
8.37% due 01/01/04........................................
Baa1/BBB+ 1,000,000
-----------
TOTAL COLLATERALIZED OBLIGATIONS AND ASSET BACKED SECURITIES
(COST $8,371,738)......................................... 8,303,875
-----------
CORPORATE OBLIGATIONS (28.5%)
BANKING (8.8%)
1,000,000 Chase Manhattan Corp., 5.75% due 12/01/97...................
Baa3/AAA- 1,001,180
1,000,000 First USA Bank Wilmington, Delaware, 4.97% due 11/30/95.....
Baa3/AAA- 991,500
1,500,000 Norwest Corp., 7.75% due 12/31/96...........................
Aa3/AA- 1,522,095
1,000,000 Regions Bank of Louisanna, 7.06% due 04/11/97...............
NR/NR 1,002,240
1,000,000 Society National Bank Cleveland, 6.875% due 10/15/96........
Aa3/A 1,000,820
-----------
5,517,835
-----------
DEPARTMENT STORES (3.2%)
2,000,000 Sears, Roebuck & Co., 7.25% due 08/05/97....................
A2/BBB 2,010,340
-----------
COMMUNICATION (0.9%)
500,000 Bell Telephone of Canada, 13.375% due 10/15/10..............
A1/A+ 540,555
-----------
FINANCE (12.4%)
1,000,000 American General Finance, 7.25% due 03/01/98................
A1/A+ 1,002,740
1,500,000 Associates Corp., North America, 6.75% due 06/23/97.........
Aa3/AA- 1,493,535
1,000,000 Chrysler Financial Corp., 5.17% due 09/20/96................
A3/BBB 974,670
1,000,000 Ford Motor Credit Corp., 8.95% due 06/12/96.................
A2/A 1,023,890
500,000 Ford Motor Credit Corp., 6.125% due 12/11/95................
A1/A+ 499,555
2,250,000 General Motors Acceptance Corp., 7.875% due 11/05/96........
Baa1/BBB+ 2,279,070
515,000 General Motors Acceptance Corp., 5.625% due 02/01/99........
Baa1/BBB+ 483,899
-----------
7,757,359
-----------
UTILITIES -- ELECTRIC (1.7%)
1,000,000 Hydro Quebec, 9.75% due 09/29/98............................
Aa3/AA 1,068,140
-----------
</TABLE>
See Accompanying Notes.
15
<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MOODY'S/S&P VALUE
AMOUNT SECURITY DESCRIPTION RATING (NOTE 1A)
- --------------- ------------------------------------------------------------ ----------- -----------
<C> <S> <C> <C>
OIL AND GAS (1.5%)
$ 1,000,000 Occidental Petroleum Corp., 5.76% due 06/15/98..............
Baa3/BBB $ 955,040
-----------
TOTAL CORPORATE OBLIGATIONS (COST $17,867,298).............. 17,849,269
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (28.5%)
Federal Home Loan Mortgage Corporation
1,134,753 8.00% due 01/01/99.......................................... 1,155,394
804,415 9.00% due 05/01/97.......................................... 820,978
634,178 Remic: SCH, LIQ, Series 1580, Class A, 6.50% due 09/15/98... 628,768
Federal National Mortgage Association
9,250,000 6.46% due 03/27/96.......................................... 9,240,380
1,500,000 Remic: PAC-1(11), Series 1994-7, Class PB,
5.60% due 07/25/03........................................ 1,449,030
1,500,000 Remic: PAC-1(11), Series 1994-12, Class PC, 5.25% due
04/25/03.................................................. 1,439,715
1,000,000 Remic: PAC-1(11), Series 1994-33, Class D,
5.50% due 04/25/05........................................ 945,640
249,995 Remic: PAC(11), Series G93-16, Class A, 5.00% due
06/25/04.................................................. 248,718
U.S. Department Veteran Affairs (Vendee Mortgage Trust),
1,900,000 Remic: Sequential Payer, Series 1994-2, Class 3B, 6.50% due
02/15/06.................................................. 1,854,229
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $17,941,055)........................................ 17,782,852
-----------
U.S. TREASURY OBLIGATIONS (23.6%)
U.S. Treasury Notes
1,325,000 6.875% due 10/31/96......................................... 1,331,983
2,905,000 6.50% due 04/30/99.......................................... 2,871,941
2,000,000 6.375% due 07/15/99......................................... 1,965,680
3,000,000 6.00% due 11/30/97.......................................... 2,950,770
4,235,000 5.50% due 07/31/97.......................................... 4,135,139
1,500,000 4.375% due 11/15/96......................................... 1,454,190
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $14,648,911).......... 14,709,703
-----------
FOREIGN GOVERNMENT OBLIGATIONS (1.7%)
1,000,000 Republic of Italy, 9.375% due 04/03/97 (cost $1,036,727)....
A1/NR 1,038,750
-----------
SHORT-TERM HOLDINGS (0.0%)
OTHER INVESTMENT COMPANIES (0.0%)
Shares
- ---------------
1,055 Seven Seas Money Market Fund (cost $1,055).................. 1,055
-----------
TOTAL INVESTMENTS (COST $59,866,784) (95.6%) 59,685,504
OTHER ASSETS IN EXCESS OF LIABILITIES (4.4%) 2,728,151
-----------
TOTAL NET ASSETS (100.0%) $62,413,655
-----------
-----------
</TABLE>
Note: Based on the cost of investments of $59,866,784 for federal income tax
purposes at April 30, 1995, the aggregate gross unrealized appreciation
and depreciation was $187,947 and $369,227, respectively, resulting in
net unrealized depreciation of $181,280.
See Accompanying Notes.
16
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $59,866,784) (Note 1a) $ 59,685,504
Receivable for Investments Sold 5,001,870
Interest Receivable 792,850
Receivable for Expense Reimbursements (Note 2c) 30,723
Deferred Organization Expenses (Note 1e) 4,485
Prepaid Insurance 248
------------
Total Assets 65,515,680
------------
LIABILITIES
Payable for Securities Purchased 3,029,696
Custody Fee Payable 26,261
Advisory Fee Payable (Note 2a) 20,156
Fund Services Fee Payable (Note 2d) 613
Administration Fee Payable (Note 2b) 300
Accrued Expenses 24,999
------------
Total Liabilities 3,102,025
------------
NET ASSETS
Applicable to Investors' Beneficial Interests $ 62,413,655
------------
------------
</TABLE>
See Accompanying Notes.
17
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1C)
$ 1,903,817
Interest Income
60,424
Dividend Income
-----------
1,964,241
Net Investment Income
EXPENSES
Advisory Fee (Note 2a) $ 73,593
Professional Fees 25,663
Custodian Fees and Expenses 20,606
Fund Services Fee (Note 2d) 3,054
Administration Fee (Note 2b) 1,859
Trustees' Fees and Expenses (Note 2e) 774
Amortization of Organization Expenses (Note 1e) 545
Miscellaneous 1,292
---------
Total Expenses 127,386
Less: Reimbursement of Expenses (Note 2c) (14,788)
---------
112,598
NET EXPENSES
-----------
1,851,643
NET INVESTMENT INCOME
(168,619)
NET REALIZED LOSS ON INVESTMENTS (including $39,746 net realized
losses from futures contracts)
714,858
NET CHANGE IN UNREALIZED DEPRECIATION OF INVESTMENTS
-----------
$ 2,397,882
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
-----------
-----------
</TABLE>
See Accompanying Notes.
18
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS FOR THE
ENDED FISCAL
APRIL 30, YEAR ENDED
1995 OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1994
----------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net Investment Income $1,851,643 $ 2,272,212
Net Realized Gain (Loss) on Investments (168,619) (1,015,882)
Net Change in Unrealized Depreciation of Investments 714,858 (804,516)
----------- -------------
Net Increase in Net Assets Resulting from Operations 2,397,882 451,814
----------- -------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 25,861,023 41,445,030
Withdrawals (19,169,064) (23,001,490)
----------- -------------
Net Increase from Investors' Transactions 6,691,959 18,443,540
----------- -------------
Total Increase in Net Assets 9,089,841 18,895,354
NET ASSETS
Beginning of Period 53,323,814 34,428,460
----------- -------------
End of Period 6$2,413,655 $53,323,814
----------- -------------
----------- -------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE FISCAL
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
------------------ -------------------
<S> <C> <C>
Ratios to Average Net Assets:
Expenses 0.38%(a) 0.36%
Net Investment Income 6.29%(a) 5.01%
Decrease in Expense Ratio due to Expense Reimbursement by Morgan 0.05%(a) 0.05%
Portfolio Turnover 85% 230 %
<FN>
- ------------------------
(a) Annualized.
</TABLE>
See Accompanying Notes.
19
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Short Term Bond Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended, 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 8, 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)Portfolio securities with a maturity of 60 days or more, including
securities that are listed on an exchange or traded over the counter, are
valued using prices supplied daily by an independent pricing service or
services that (i) are based on the last sale price on a national
securities exchange, or in the absence of recorded sales, at the readily
available bid price on such exchange or at the quoted bid price in the
over-the-counter market, if such exchange or market constitutes the
broadest and most representative market for the security and (ii) in other
cases, take into account various factors affecting market value, including
yields and prices of comparable securities, indication as to value from
dealers and general market conditions. If such prices are not supplied by
the Portfolio's independent pricing services, such securities are priced
in accordance with procedures adopted by the Trustees. All portfolio
securities with a remaining maturity of less than 60 days are valued by
the amortized cost method.
b)Futures -- A futures contract is a transferable agreement between parties
to deliver or receive a financial instrument for a standardized amount
during a specific future month. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash and/or
securities equal to the minimum "initial margin" requirements of the
exchange. Pursuant to the contract, the Portfolio agrees to receive from
or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation
margin" and are recorded by the Portfolio as unrealized gains or losses.
When the contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value of the contract at the time it
was opened and the value at the time when it was closed. The use of
futures transactions involves the risk of imperfect correlation in
movements in the price of futures contracts, interest rates and the
underlying hedged assets, and the possible inability of counterparties to
meet the terms of their contracts. Treasury futures transactions during
the six months ended April 30, 1995 are summarized as follows:
<TABLE>
<CAPTION>
SALES OF FUTURES CONTRACTS
--------------------------------------
PRINCIPAL AMOUNT
NUMBER OF CONTRACTS OF CONTRACTS
------------------- ----------------
<S> <C> <C>
Contracts opened 145 $145,000,000
Contracts closed 145 145,000,000
--
----------------
Open at end of period 0 $ 0
--
--
----------------
----------------
</TABLE>
20
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
c)Securities transactions are recorded on a trade date basis. Interest
income, which includes the amortization of premiums and discounts, if any,
is recorded on an accrual basis. Dividend income is recorded on the
ex-dividend date. For financial and tax reporting purposes, realized gains
and losses are determined on the basis of specific lot identification.
d)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.
e)The Portfolio incurred organization expenses in the amount of $5,492.
These costs were deferred and are being amortized by the Portfolio on a
straight-line basis over a five-year period from the commencement of
operations.
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 0.25%
of the Portfolio's average daily net assets. For the six months ended
April 30, 1995, this fee amounted to $73,593.
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 to the daily net assets of the Portfolio. For the six months ended
April 30, 1995, Signature's fee for these services amounted to $1,859.
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 of the Portfolio, excluding
the advisory fee, custody expenses, fund services fee, amortization of
organization expense, and brokerage costs, exceed the expense limit of
0.05% of the Portfolio's average daily net assets up to $200 million and
0.03% of average daily net assets thereafter, Morgan will reimburse the
Portfolio for the excess expense amount and receive no fee.
21
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
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 April 30, 1995,
Morgan has agreed to reimburse the portfolio $14,788.
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 $3,054 for the six months ended April 30, 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 and their
corresponding Portfolios. The Trustees' Fees and Expenses shown in the
financial statements represents the Portfolio'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 show in the financial
statements was $400.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the six months
ended April 30, 1995 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
------------- -------------
<S> <C> <C>
U.S. Government and Agency Obligations $ 42,310,527 $ 44,493,353
Corporate and Collateralized Obligations 12,208,945 2,568,828
------------- -------------
$ 54,519,472 $ 47,062,181
------------- -------------
------------- -------------
</TABLE>
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 NEW YORK 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
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 SHORT TERM BOND FUND
SEMI-ANNUAL REPORT
APRIL 30, 1995
