<PAGE>
LETTER TO THE SHAREHOLDERS OF THE PIERPONT ASIA GROWTH FUND
August 15, 1996
Dear Shareholder:
Thank you for investing in The Pierpont Asia Growth Fund. If you are first-time
investor in the Pierpont Funds, let me take this opportunity to welcome you to
our shareholder family. Let me also express the hope that you will explore
additional Pierpont Funds as a way to conveniently diversify your investment
portfolio and gain broad exposure to financial opportunities in domestic and
international markets.
In the months ahead, we will be sending you detailed reports on the Fund's
performance and its strategies as it pursues its investment objective. The
Fund's objective is to satisfy the needs of long-term investors who wish to
diversify their portfolios through investment in an actively managed
portfolio of equity securities in Asian growth markets. The first of these
reports covers the short period from the Fund's commencement of operations on
May 13, 1996 to June 30, 1996. Going forward, these reports will be provided
to you on both a semi-annual and an annual basis.
To introduce the in-depth reporting you deserve, we have included a portfolio
manager Q&A with Yuen-Peng Mok, a member of the Fund's portfolio management
team. It should be noted that this interview pertains to The Asia Growth
Portfolio, a separate investment company in which the Fund invests all of its
assets. The performance of the Fund is directly related to the performance of
the Portfolio.
We welcome your comments and questions as well as any suggestions on how we can
improve your financial report. 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
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TABLE OF CONTENTS
LETTER TO THE SHAREHOLDERS...........1 SPECIAL FUND-BASED SERVICES.......7
PORTFOLIO MANAGER Q&A................2 FINANCIAL STATEMENTS..............9
FUND FACTS AND HIGHLIGHTS............6
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1
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PORTFOLIO MANAGER Q&A
[PHOTO]
Following is an interview with YUEN-PENG MOK, who is a member of the portfolio
management team for The Asia Growth Portfolio in which the Fund invests. Prior
to joining Morgan's investment management group in 1990, Yuen-Peng served as
head of the firm's Singapore office Corporate Finance group, undertaking major
financial advisory assignments in the region. She holds a B.Acc. (Honors) in
accounting from the University of Singapore and is a Chartered Financial
Analyst. This interview was conducted on August 1, 1996 and reflects Yuen-Peng's
views on that date.
ASIA'S GROWTH MARKETS PROVIDED DOUBLE-DIGIT RETURNS IN THE FIRST HALF OF 1996.
IN YOUR VIEW, HOW MUCH OF THIS IMPRESSIVE PERFORMANCE MAY BE ATTRIBUTED TO
INCREASED PARTICIPATION OF U.S. INVESTORS IN THE MARKETS, AND WHAT OTHER FACTORS
WERE INVOLVED?
YPM: The principal reason for the rise in Asia's growth markets during the
period under review was the cuts in short-term U.S. interest rates implemented
by the Federal Reserve in December 1995 and again in January of this year. As
many Asian currencies are closely linked to the U.S. dollar, movements in U.S.
interest rates typically have a direct impact on domestic rates in the Far East.
Since Asian growth equities had lagged those in the U.S. during 1995, there was
an increase in U.S. investor interest when Asian growth markets began to heat up
during the first half of 1996. Needless to say, increased levels of U.S.
investment provided additional fuel for the performance of Asian markets.
THE PORTFOLIO'S PERFORMANCE TRAILED THE ASIA GROWTH BENCHMARK* BY LESS THAN 1%
DURING THE PERIOD UNDER REVIEW. WHICH FACTORS DO YOU THINK WERE RESPONSIBLE FOR
HOLDING BACK THE PORTFOLIO'S OVERALL RELATIVE PERFORMANCE?
YPM: Country allocation was the main detractor from overall performance during
the first half of 1996. The Portfolio was aggressively positioned in Korea and
Thailand. Both markets performed poorly because they were plagued by negative
political and economic developments. In Korea, the secret slush fund of
previous presidents threatened the current administration, while general
elections in Thailand led to the formation of a weak political
coalition.Thailand also scaled back forecasts for economic and trade growth,
which contributed to a further selloff of equities.
* It is important to note that the Fund's benchmark is an unmanaged index
whose performance does not include fees or operating expenses and which is
not available to individual and/or institutional investors. The benchmark is
a hybrid of the IFC and MSCI Indices. IFC: 5% China, Indonesia, The
Philippines, Korea and Taiwan, 20% Malaysia, 12% Thailand; MSCI:
32% Hong Kong, 11% Singapore.
2
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The Portfolio's aggressive market exposure in Taiwan served to add value,
while stock selections undermined overall performance. Offshore premiums, which
are imbedded in the valuations of instruments in which the Portfolio
participates, contracted ahead of a further increase in foreign ownership limits
for Taiwanese equities. Further, the anticipated liberalization of foreign
equity ownership in Korea had a similar impact on the Portfolio's stock
selections in that market. On the other hand, the Portfolio posted positive
stock selection results for the period in China, Malaysia, Singapore and
Thailand.
ACCOUNTING FOR NEARLY ONE-THIRD OF ITS TOTAL ALLOCATION, HONG KONG REPRESENTS
THE BENCHMARK'S LARGEST COUNTRY EXPOSURE. HOW SUCCESSFUL WAS THE PORTFOLIO'S
DECISION TO TRACK THE BENCHMARK WEIGHTING OF THIS MARKET FOR THE PERIOD, AND
WHICH OF THE PORTFOLIO'S HONG KONG HOLDINGS WERE MOST BENEFICIAL FOR OVERALL
RETURNS?
YPM: Hong Kong rose 12.7% in U.S. dollar terms during the first six months of
1996. Our decision to move the Portfolio from neutrally weighted to slightly
overweighted in this market served to enhance overall performance. Holdings that
were most beneficial to overall returns during the period include HENDERSON LAND
(real estate sector, up 24.5%), CITIC PACIFIC (multi-industry, up 18.3%), CHEUNG
KONG (real estate-based conglomerate, up 18.4%) and SUN HUNG KAI PROPERTIES
(real estate, up 23.7%).
MORGAN'S PROPRIETARY RESEARCH AIMS TO IDENTIFY "INEXPENSIVE" STOCKS THAT WILL
EVENTUALLY APPRECIATE TO REACH THEIR FUNDAMENTAL VALUE. YOU'VE JUST DESCRIBED
SOME OF THE PORTFOLIO'S HONG KONG HOLDINGS THAT PERFORMED WELL, COULD YOU
MENTION ONE THAT HAS YET TO MEET OUR PERFORMANCE EXPECTATIONS?
YPM: One example of an undervalued stock whose stock price did not meet our
price performance expectation in the first half was HSBC HOLDINGS in Hong Kong.
The company's stock price was flat at $117 Hong Kong dollars during the first
six months of 1996. Subsequently, however, the report of a 32% rise in interim
net profit has lifted the share price sharply. We believe that the stock is
still undervalued at current levels, and that it should continue to outperform
the market.
WHAT EFFECT DO YOU BELIEVE HONG KONG'S UPCOMING REUNIFICATION WITH CHINA IS
LIKELY TO HAVE ON REGIONAL MARKETS, AND ARE WE EXPECTING TO SEE BETTER RELATIONS
BETWEEN CHINA AND TAIWAN, WHICH MIGHT HELP THE PERFORMANCE OF TAIWANESE STOCKS?
YPM: We view the reunification of Hong Kong with China in a positive light as
the actual event will remove uncertainties of "waiting" for it to happen. We
believe the "business as usual" scenario that is likely to take place following
the handover of Hong Kong should improve investors' confidence in Hong Kong and
in the region as a whole. A benign China bent on capitalist market reforms
should be positive for Asia. The Chinese Government is keen to make the handover
a success because it has strategic significance for a peaceful reunification
process with Taiwan in the future.
3
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On the question of Taiwan, China stopped missile tests immediately after the
island nation's March presidential elections, and preliminary discussions have
begun between the two countries on cross-straits shipping and air links.
President Lee Teng Hui of Taiwan has also expressed a willingness to visit
Beijing if he is invited by the Chinese government. The warming of cross-straits
relations has already translated into an improvement in consumer confidence,
with the Taiwan market rising 22% during the second quarter of 1996 alone.
THE COMBINATION OF MALAYSIA AND SINGAPORE ALSO MAKES UP ROUGHLY ONE-THIRD OF THE
BENCHMARK'S TOTAL COUNTRY EXPOSURE. WE KNOW THAT PROPOSED PROPERTY GAINS TAXES
PLAYED AN IMPORTANT ROLE IN SINGAPORE'S RECENT STOCK PRICE DECLINE AND THAT A
"WAIT-AND-SEE" ATTITUDE HAS BECOME PERVASIVE AMONG INVESTORS IN MALAYSIA AMID
SIGNS THAT DOMESTIC INTEREST RATES MIGHT HEAD HIGHER WHILE THE COUNTRY'S
EXTERNAL TRADE ACCOUNT MIGHT BEGIN TO DETERIORATE. WHAT WAS THE PORTFOLIO'S
STRATEGY FOR THESE MARKETS IN THE SIX MONTHS JUST PAST, AND HOW DO WE VIEW THEIR
LONG-TERM PERFORMANCE POTENTIAL?
YPM: We anticipated corrective action in Singapore by the government, where
housing prices had more than doubled in the past two to three years. These
expectations were met when capital gains taxes were introduced in mid-May,
leading to a sharp drop in activity in the housing market, followed by a
downgrading of analysts' earnings expectations. Poor corporate earnings reports
for 1995 also confirmed that margins had already been under pressure from the
tight labor market, while a strong Singapore dollar hurt export competitiveness.
The Portfolio benefited from this retracement in valuations because it was
underweighted in Singapore throughout the first half of 1996.
In Malaysia, the fact that the country's trade and current account balances
showed little sign of improvement, coupled with concerns that monetary policy
would require additional tightening, produced weakness in that country's equity
market. Longer term, both economies should benefit from the growing intra-
regional trade and continued direct investment by domestic investors.
THE PORTFOLIO'S AGGRESSIVE EXPOSURE TO KOREAN STOCKS HELD BACK OVERALL
RETURNS FOR THE PERIOD AS THAT MARKET UNDERPERFORMED IN THE WAKE OF A
HIGH-PROFILE POLITICAL SCANDAL AND DOWNSIZED EXPORT TARGETS. HOW DO YOU THINK
KOREA'S LIBERALIZATION OF FOREIGN OWNERSHIP RULES -- SCHEDULED
DOUBLE-WEIGHTING IN THE MSCI INDEX AND PROBABLE ADMISSION INTO THE
ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) -- IS LIKELY TO
AFFECT ITS LONG-TERM PERFORMANCE AND THE PORTFOLIO'S INVESTMENT STRATEGY
THERE?
YPM: Viewed long term, the various measures noted above should have a positive
impact on Korean equities. Over the shorter term, however, loss of
competitiveness among Korean exporters arising from the yen's weakness, together
with a strained current account balance, may limit the appeal of this market
to foreign investors. The imminent increase of Korea's weighting in the MSCI
Index and Korea's admission into the OECD should be highly beneficial to
valuations as domestic interest rates should fall from prevailing high levels.
4
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WHAT IMPACT DO YOU EXPECT JAPAN'S WEAKENING YEN WILL HAVE THROUGHOUT ASIA'S
EMERGING MARKETS?
YPM: The sharp reversal of the yen over the past few quarters has already
affected Asian exporters. Cyclical, capital intensive, and technology
businesses, which compete directly with the Japanese, have seen some
erosion of their competitiveness. This is particularly evident in Taiwan and
Korea, where many firms have recently scaled back their plans for capacity
increases. Yen weakness also could lead to a modest deceleration in the rate of
direct investment from Japanese manufacturers over the longer term because they
have the option of expanding their production capacity in Japan instead of
venturing overseas. This trend will be mitigated as Japanese money managers
increase their asset allocations to non-yen investments. Finally countries that
are among the region's heaviest importers could benefit as lower "imported
inflation"on Japanese products helps to reduce prices of both capital and
consumer goods.
VIEWED OVERALL, WHAT EXPECTATIONS DOES THE PORTFOLIO HAVE FOR ASIA'S EMERGING
MARKETS DURING THE SECOND HALF OF 1996?
YPM: We expect that markets in emerging Asia will continue to take their cue
from the U.S. during the second half of 1996, particularly with regard to trends
observed in both interest rates and the currency ex-change rate between the U.S.
dollar and the yen. In our view, caution among investors is likely to be
maintained, although the recent selloff in markets seems likely to reinvigorate
investor interest into the region.
We remain more positive on the "Greater China" markets -- namely China, Hong
Kong and Taiwan -- where the cyclical recovery of the Chinese economy is likely
to have the greatest impact. We expect South-east Asian equities to be
restrained by profit margin pressure. However, the economies' slowdown from
above-trend levels over the past few years will bring relief to investors on the
back of an improvement in trade and current account balances.
5
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Fund facts
INVESTMENT OBJECTIVE
The Pierpont Asia Growth Fund seeks to provide a high total return from a
portfolio of equity securities of companies in Asian growth markets. It is
designed for long-term investors who want access to the rapidly growing Asian
markets.
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COMMENCEMENT OF OPERATIONS
5/13/96
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NET ASSETS AS OF 6/30/96
$77,651
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CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/27/96
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EXPENSE RATIO
The Fund's annualized expense ratio of 1.60%, after reimbursement, covers
shareholders' expenses for custody, tax reporting, investment advisory and
shareholder services. 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 JUNE 30, 1996
PORTFOLIO ALLOCATION
(AS A PERCENTAGE OF TOTAL INVESTMENTS AND CASH)
[PIE CHART]
/ / HONG KONG 36.1%
/ / MALAYSIA 16.8%
/ / THAILAND 12.4%
/ / SINGAPORE 9.0%
/ / TAIWAN 6.9%
/ / KOREA 6.6%
/ / THE PHILIPPINES 4.2%
/ / INDONESIA 3.9%
/ / CHINA 2.6%
/ / CASH 1.5%
LARGEST HOLDINGS % OF TOTAL INVESTMENTS
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CHEUNG KONG HOLDINGS LTD.
(HONG KONG) 3.7%
HONG KONG TELECOMMUNICATIONS LTD.
(HONG KONG) 3.1%
HUTCHISON WHAMPOA LTD.
(HONG KONG) 3.1%
SWIRE PACIFIC LTD.
(HONG KONG) 3.1%
SUN HUNG KAI PROPERTIES LTD.
(HONG KONG) 3.0%
6
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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.
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.
7
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FUNDS DISTRIBUTOR, INC. IS THE DISTRIBUTOR FOR THE PIERPONT ASIA GROWTH FUND
(THE "FUND"). SIGNATURE BROKER-DEALER SERVICES, INC. WAS THE FUND'S DISTRIBUTOR
PRIOR TO AUGUST 1, 1996.
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("MORGAN") SERVES AS INVESTMENT
ADVISOR TO THE ASIA GROWTH PORTFOLIO (THE "PORTFOLIO") AND MAKES THE FUND
AVAILABLE SOLELY IN ITS CAPACITY AS SERVICES 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.
The Fund invests all of its investable assets in The Asia Growth Portfolio, a
separately registered investment company which is not available to the public
but only to other collective investment vehicles such as the Fund. The Portfolio
invests in foreign securities which are subject to special risks.
FOR A DISCUSSION OF THESE RISKS AND MORE COMPLETE INFORMATION ABOUT THE FUND OR
OTHER PIERPONT FUNDS, INCLUDING MANAGEMENT FEES AND OTHER EXPENSES, PROSPECTIVE
INVESTORS SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS, WHICH SHOULD BE READ
CAREFULLY BEFORE INVESTING. YOU MAY OBTAIN ADDITIONAL COPIES OF THE PROSPECTUSES
FOR THE FUNDS BY CALLING J.P. MORGAN FUNDS SERVICES AT (800) 521-5411.
8
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THE PIERPONT ASIA GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1996
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<TABLE>
<S> <C>
ASSETS
Investment in ("Portfolio"), at value $ 77,656
Deferred Organization Expenses 31,097
---------
Total Assets 108,753
---------
LIABILITIES
Organization Expenses Payable 16,046
Shareholder Servicing Fee Payable 5
Accrued Expenses 15,051
---------
Total Liabilities 31,102
---------
NET ASSETS
Applicable to 7,805 Shares of Beneficial Interest Outstanding
(par value $0.001, unlimited shares authorized) $ 77,651
---------
---------
Net Asset Value, Offering and Redemption Price Per Share $ 9.95
---------
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ANALYSIS OF NET ASSETS
Paid-in Capital $ 77,075
Undistributed Net Investment Income 43
Accumulated Net Realized Loss on Investment and Foreign Currency Transactions (2)
Net Unrealized Appreciation of Investment and Foreign Currency Translations 535
---------
Net Assets $ 77,651
---------
---------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
9
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THE PIERPONT ASIA GROWTH FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD MAY 13, 1996 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1996
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO
Allocated Dividend Income (Net of $5 Foreign Withholding Tax) $ 71
Allocated Interest Income 3
Allocated Portfolio Expenses (Net of $5 Reimbursement) (26)
---------
Net Investment Income Allocated from Portfolio 48
FUND EXPENSES
Registration Fees $ 5,135
Transfer Agent Fees 4,122
Printing Expenses 3,155
Professional Fees 1,852
Amortization of Organization Expense 903
Trustees' Fees and Expenses 97
Shareholder Servicing Fee 5
Miscellaneous 690
---------
Total Fund Expenses 15,959
Less: Reimbursement of Expenses (15,954)
---------
NET FUND EXPENSES (5)
---------
NET INVESTMENT INCOME 43
NET REALIZED LOSS ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS ALLOCATED
FROM PORTFOLIO (2)
NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENT AND FOREIGN CURRENCY
TRANSLATIONS ALLOCATED FROM PORTFOLIO 535
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 576
---------
---------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
10
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THE PIERPONT ASIA GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 13, 1996
(COMMENCEMENT
OF
OPERATIONS)
THROUGH
JUNE 30, 1996
(UNAUDITED)
---------------
<S> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 43
Net Realized Loss on Investment and Foreign Currency Transactions Allocated
from Portfolio (2)
Net Change in Unrealized Appreciation of Investment and Foreign Currency
Translations Allocated from Portfolio 535
---------------
Net Increase in Net Assets Resulting from Operations 576
---------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST
Proceeds from Shares of Beneficial Interest Sold 77,075
---------------
Net Increase from Transactions in Shares of Beneficial Interest 77,075
---------------
Total Increase in Net Assets 77,651
---------------
NET ASSETS
End of Period (including undistributed net investment income of $43) $ 77,651
---------------
---------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
11
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THE PIERPONT ASIA GROWTH FUND
FINANCIAL HIGHLIGHTS
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Selected data for a share outstanding throughout the period is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 13, 1996
(COMMENCEMENT OF
OPERATIONS)
THROUGH JUNE 30,
1996
(UNAUDITED)
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.01
Net Realized and Unrealized Loss on Investment and Foreign Currency (0.06)
-------------------
Total from Investment Operations (0.05)
-------------------
NET ASSET VALUE, END OF PERIOD $ 9.95
-------------------
-------------------
Total Return (0.50)%(a)
-------------------
-------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets at End of Period (in thousands) $ 78
Ratios to Average Net Assets
Expenses 1.60%(b)
Net Investment Income 2.13%(b)
Decrease Reflected in Expense Ratio due to Expense Reimbursement 0.90%(b)(c)
</TABLE>
- ------------------------
(a) Not Annualized.
(b) Annualized.
(c) After consideration of certain state limitations.
The Accompanying Notes are an Integral Part of the Financial Statements.
12
<PAGE>
THE PIERPONT ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
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1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Pierpont Asia Growth Fund (the "Fund") is a separate series of The Pierpont
Funds, a Massachusetts business trust (the "Trust") which was organized on
November 4, 1992. The Trust is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company. The Fund
commenced operations on May 13, 1996.
The Fund invests all of its investable assets in The Asia Growth Portfolio (the
"Portfolio"), a diversified open-end management investment company having the
same investment objective as the Fund. The value of such investment included in
the Statement of Assets and Liabilities reflects the Fund's proportionate
interest in the net assets of the Portfolio (less than 1% at June 30, 1996). 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 preparation of financial statements prepared in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual amounts
could differ from those estimates. 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)Distributions to shareholders of net investment income and net realized
capital gain, if any, are declared and paid annually.
d)The Fund incurred organization expenses in the amount of $32,000. 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)The Fund is treated as a separate entity for federal income tax purposes
and 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
gain, 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.
13
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THE PIERPONT ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
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2. TRANSACTIONS WITH AFFILIATES
a)The Trust has retained 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 Administration Agreement provides for a fee to be paid
to Signature equal to the Fund's proportionate share of a complex-wide fee
based on the following annual schedule: 0.03% on the first $7 billion of
the aggregate average daily net assets of the Portfolio and the other
portfolios (the "Master Portfolios") in which series of the Trust, The JPM
Institutional Funds or The JPM Advisor Funds invest and 0.01% on the
aggregate average daily net assets of the Master Portfolios in excess of
$7 billion. The portion of this charge payable by the Fund is determined
by the proportionate share its net assets bear to the total net assets of
the Trust, The JPM Institutional Funds, The JPM Advisor Funds and the
Master Portfolios. For the period May 13, 1996 (commencement of
operations) through June 30, 1996, there was no fee for these services.
Effective August 1, 1996, administrative functions provided by Signature
will be provided by Funds Distributor Inc. ("FDI"), a registered
broker-dealer, and by Morgan Guaranty Trust Company of New York
("Morgan"). FDI will also become the Fund's distributor. Under a
Co-Administration Agreement between FDI and the Trust on behalf of the
Fund, FDI's fees are to be paid by the Fund (see Note 2b).
b)The Trust, on behalf of the Fund, has an Administrative Services Agreement
(the "Services Agreement") with Morgan under which Morgan is responsible
for certain aspects of the administration and operation of the Fund. Under
the Services Agreement, the Fund has agreed to pay Morgan a fee equal to
its proportionate share of an annual complex-wide fee. This fee is
calculated daily based on the aggregate average daily net assets of the
Master Portfolios in accordance with the following annual schedule: 0.06%
on the first $7 billion of the Master Portfolios' aggregate average daily
net assets and 0.03% of the aggregate average daily net assets in excess
of $7 billion. The portion of this charge payable by the Fund is
determined by the proportionate share that the Fund's net assets bear to
the net assets of the Trust, the Master Portfolios and other investors in
the Master Portfolios for which Morgan provides similar services. For the
period May 13, 1996 (commencement of operations) through June 30, 1996,
there was no fee for these services.
Effective August 1, 1996, the Services Agreement will be amended such that
the aggregate complex-wide fees to be paid by the Fund under both the
amended Services Agreement and the Co-Administration Agreement (see Note
2a) will be calculated daily based on the aggregate average daily net
assets of the Master Portfolios in accordance with the following annual
schedule: 0.09% on the first $7 billion of the Master Portfolios'
aggregate average daily net assets and 0.04% of the aggregate average
daily net assets in excess of $7 billion.
In addition, 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
14
<PAGE>
THE PIERPONT ASIA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
no more than 1.60% of the average daily net assets of the Fund through
December 31, 1996. For the period May 13, 1996 (commencement of
operations) through June 30, 1996, Morgan has agreed to reimburse the Fund
$15,954 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 paid monthly at an annual rate
of 0.25% of the Fund's average daily net assets. For the period May 13,
1996 (commencement of operations) through June 30, 1996, the fee for these
services amounted to $5.
d)The Trust, on behalf of the Fund, has a Fund Services Agreement with
Pierpont Group, Inc. ("Group") to assist the Trustees in exercising their
overall supervisory responsibilities for the Trust's affairs. The Trustees
of the Trust represent all the existing shareholders of Group. For the
period May 13, 1996 (commencement of operations) through June 30, 1996
there was no fee for these services.
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of The Trust, The JPM Institutional Funds, and the Master
Portfolios. The Trustees' Fees and Expenses shown in the financial
statements represents the Fund's allocated portion of these total fees and
expenses. The Trust's Chairman and Chief Executive Officer also serves as
Chairman of Group and received compensation and employee benefits from
Group in his role as Group's Chairman.
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 PERIOD MAY 13, 1996
(COMMENCEMENT OF OPERATIONS)
THROUGH JUNE 30, 1996
---------------------------------------
<S> <C>
Shares of beneficial interest sold 7,805
-----
Net increase 7,805
-----
-----
</TABLE>
15
<PAGE>
The Asia Growth Portfolio
Semi-Annual Report June 30, 1996
(unaudited)
(The following pages should be read in conjunction
with The Pierpont Asia Growth Fund
Semi-Annual Financial Statements)
16
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
COMMON STOCK (92.8%)
CHINA (2.6%)
Huaneng Power International
Inc. (ADR)
(Telecommunication
Services)+ ................ 64,000 $ 1,144,000
Shanghai Dajiang Co. Ltd.
(Multi-Industry) .......... 1,487,100 780,727
Shanghai Haixin Shipping Co.
(Transport & Services) .... 3,500,000 230,605
Shanghai Tyre and Rubber Co.
Ltd. (Metals & Mining)+ ... 1,435,800 358,950
Shanghai Yaohua Pilkington
Glass Co. Ltd. (Building
Materials) . 602,750 361,650
------------
2,875,932
------------
HONG KONG (35.6%)
C.P. Pokphand Co.
(Agriculture) ............. 500,000 198,630
Cathay Pacific Airways
(Airlines) ................ 635,000 1,164,911
CDL Hotels International Ltd.
(Restaurants & Hotels) .... 400,000 219,624
Cheung Kong Holdings Ltd.
(Real Estate) ............. 560,000 4,033,328
China Light and Power Co.
Ltd.
(Telecommunications) ...... 370,000 1,677,797
Citic Pacific Ltd.
(Multi-Industry) .......... 266,000 1,075,614
Dao Heng Bank Group Ltd.
(Banking) ................. 55,000 212,454
Dickson Concepts
International Ltd.
(Retail) .................. 300,000 383,696
Dong Fang Electrical
Machinery Co. (Electrical
Equipment) ................ 1,884,000 472,186
Guangdon Electric Power
(Electric) ................ 1,000,000 639,493
Hang Seng Bank (Banking) .... 217,500 2,191,717
Henderson Land Development
Company Ltd. (Real
Estate) ................... 266,000 1,993,151
Hong Kong Electric Holdings
Ltd. (Electric) ........... 525,000 1,600,670
Hong Kong Telecommunications
Ltd.
(Telecommunications) ...... 1,922,000 3,451,428
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
</TABLE>
HONG KONG (CONTINUED)
<TABLE>
<S> <C> <C>
HSBC Holdings PLC
(Banking) ................. 149,303 $ 2,256,758
Hutchison Whampoa Ltd.
(Multi-Industry) .......... 549,000 3,454,076
JCG Holdings Limited
(Financial Services) ...... 554,000 450,901
Johnson Electric Holdings
Ltd. (Electronics) ........ 451,000 1,013,810
Joyce Boutique Holdings
(Retail) .................. 622,000 208,927
Luoyang Glass Co. Ltd.
(Building Materials) ...... 1,576,000 374,632
National Mutual Asia Ltd.
(Insurance) ............... 220,000 193,269
New World Development Co.
Ltd. (Real Estate) ........ 300,000 1,391,382
Shangri-La Asia Ltd.
(Restaurants & Hotels) .... 170,000 238,292
Sing Tao Holdings
(Broadcasting &
Publishing) ............... 672,000 397,183
Sun Hung Kai Properties Ltd.
(Real Estate) ............. 327,000 3,305,694
Swire Pacific Ltd., Class A
(Multi-Industry) .......... 402,500 3,444,946
Television Broadcast Ltd.
(Entertainment, Leisure &
Media) .................... 186,000 698,055
Tingyi (Cayman Islands)
Holding Co. (Food,
Beverages & Tobacco)+ ..... 648,000 177,895
Wai Kee Holdings Ltd.
(Construction &
Housing) .................. 820,000 235,708
Wharf (Holdings) Ltd. (Real
Estate) ................... 90,000 322,072
Yizheng Chemical Fibre Co.
Ltd. (Chemicals) .......... 1,340,000 296,027
Yue Yuen Industrial Holdings
(Metals & Mining) ......... 1,416,000 402,454
Zhenhai Refining & Chemical
Co. (Chemicals) ........... 3,946,000 1,121,529
------------
39,298,309
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
17
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
INDONESIA (3.9%)
P.T. Gudang Garam (Food,
Beverages & Tobacco) ...... 178,500 $ 765,025
P.T. Hanjaya Mandala
Sampoerna (Food, Beverages
& Tobacco) ................ 23,000 261,877
P.T. Indosat (ADR)
(Telecommunications) ...... 6,000 201,000
P.T. International Nickel
Indonesia (Metals &
Mining) . 210,000 478,211
P.T. Japfa Comfeed Indonesia
(Food, Beverages &
Tobacco) .................. 351,500 203,884
P.T. Kabelmetal Indonesia
(Telecommunications-
Equipment) ................ 200,000 90,228
P.T. Matahari Putra Prima
(Retail) .................. 157,000 286,690
P.T. Pabris Kertas Tjiwi
Kimia (Metals & Mining) ... 543,693 554,807
P.T. Pan Indonesia Bank
(Banking) ................. 518,125 478,627
P.T. Semen Cibinong (Building
Materials) ................ 146,000 329,334
P.T. Telekomunikasi Indonesia
(Telecommunications) ...... 427,500 647,470
P.T. Tigaraksa Satria
(Multi-Industry) .......... 75,800 195,409
------------
4,492,562
------------
MALAYSIA (15.0%)
Arab Malaysian Finance Berhad
(Financial Services) ...... 75,000 327,624
Commerce Asset-Holding Berhad
(Banking) ................. 104,000 633,527
Edaran Otomobil Nasional
Berhad (Automotive) ....... 57,000 545,960
Guinness Anchor Berhad (Food,
Beverages & Tobacco) ...... 240,000 495,344
Hicom Holdings Berhad
(Diversified
Manufacturing) ............ 133,000 378,441
IJM Corp. Berhad (Building
Materials) ................ 188,000 325,484
Industrial Oxygen Inc. Berhad
(Agriculture) ............. 358,000 496,418
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
</TABLE>
MALAYSIA (CONTINUED)
<TABLE>
<S> <C> <C>
Intiplus Berhad (Financial
Services) ................. 456,000 $ 447,733
Konsortium Perkapalan Berhad
(Transport & Services)+ ... 95,000 571,088
Leader Universal Holdings
Berhad (Electronics) ...... 125,000 353,173
Lingui Developments Berhad
(Forest Products &
Paper) .................... 318,000 751,913
Malayan Banking Berhad
(Banking) ................. 79,000 759,848
Malayan Cement Berhad
(Building Materials) ...... 233,000 560,267
Malaysian Assurance Alliance
Berhad (Insurance) ........ 750 3,968
Malaysian Oxygen Berhad
(Chemicals) ............... 186,500 1,009,022
Malaywata Steel Berhad
(Metals & Mining) ......... 305,000 523,157
Maruichi Malaysian Steel Tube
Berhad (Metals &
Mining) ................... 118,000 439,798
Matsushita Electric Co.
Malaysia Berhad
(Electronics) ............. 27,000 275,926
Metroplex Berhad (Real
Estate) . 149,000 160,033
New Straits Times Press
Berhad (Entertainment,
Leisure & Media) .......... 242,000 1,260,802
Pacific & Orient Berhad
(Insurance) ............... 104,000 291,756
Petronas Dagangan Berhad
(Oil-Services) ............ 83,000 224,528
Reliance Pacific Berhad
(Entertainment, Leisure &
Media) .................... 152,000 371,588
Resorts World Berhad
(Entertainment, Leisure &
Media) .................... 249,000 1,426,999
Sime Darby Berhad
(Multi-Industry) .......... 270,000 746,622
Sime U.E.P. Properties Berhad
(Real Estate) ............. 431,000 876,600
TA Enterprise Berhad
(Financial Services) ...... 362,000 565,798
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
18
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MALAYSIA (CONTINUED)
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
Technological Resources
Industries Berhad
(Multi-Industry) .......... 124,000 $ 432,344
Tenaga Nasional Berhad
(Telecommunications) ...... 253,000 1,064,628
------------
16,320,389
------------
PHILIPPINES (3.7%)
Aboitiz Equity Ventures Inca
(GDS) (Banking)+ .......... 1,930,800 361,115
Alaska Milk Corp. (Food,
Beverages & Tobacco)+ ..... 3,183,000 388,775
Alsons Cement Corp. (Building
Materials)+ ............... 436,000 199,701
Bankard Inc. (Banking)+ ..... 790,000 331,690
Fil-Estate Land Inc. (Real
Estate) ................... 296,100 378,613
JG Summit Holdings Inc.
(Multi-Industry) .......... 852,000 318,697
Manila Electric Co.
(Electric) ................ 60,000 629,790
Petron Corp.
(Oil-Services) ............ 612,812 280,686
Philippine Long Distance
Telephone Co. (ADR)
(Utilities) ............... 5,700 331,313
Philippine National Bank
(Banking)+ ................ 16,628 277,671
Pryce Properties Corp. (Real
Estate) ................... 5,405,400 342,490
Steniel Manufacturing Corp.
(Metals & Mining) ......... 2,300,000 267,756
------------
4,108,297
------------
SINGAPORE (8.4%)
Acma Ltd. (Computer
Peripherals) .............. 117,600 343,274
Cycle & Carriage Ltd.
(Automotive) .............. 27,000 288,853
DBS Land Ltd. (Real
Estate) ................... 105,000 360,057
Development Bank Singapore
(Banking) ................. 74,000 922,744
Fraser & Neave Ltd. (Food,
Beverages & Tobacco) ...... 98,000 1,013,714
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
</TABLE>
SINGAPORE (CONTINUED)
<TABLE>
<S> <C> <C>
Hotel Properties Ltd.
(Restaurants & Hotels) .... 215,000 $ 380,816
Jurong Engineering Ltd.
(Capital Goods) ........... 99,000 347,899
Jurong Shipyard Ltd.
(Transport & Services) .... 32,000 162,104
NatSteel Ltd. (Metals &
Mining) ................... 147,500 292,608
Osprey Maritime Ltd.
(Transport & Services) .... 139,500 246,218
Overseas Chinese Bank
(Banking) ................. 76,000 888,452
Singapore Airlines Ltd.
(Airlines) ................ 159,000 1,678,495
Singapore Telecommunications
Ltd.
(Telecommunications) ...... 336,000 895,084
United Overseas Bank Ltd.
(Banking) ................. 155,310 1,485,490
------------
9,305,808
------------
SOUTH KOREA (5.9%)
Cho Hung Bank (Banking) ..... 61,000 758,689
Chung Ho Computer Co.
(Computer Peripherals) .... 8,000 580,393
Dong Ah Construction
Industrial Co.
(Construction &
Housing) .................. 7,300 277,700
Dongbu Insurance
(Insurance)+ .............. 8,030 434,477
Hana Bank (Banking) ......... 17,596 323,298
Hansol Paper Co. Ltd. (GDS)
(Forest Products &
Paper) .................... 14,937 287,537
Hansol Paper Co. Ltd. (GDS)
144A (Forest Products &
Paper)+ ................... 2,195 42,254
Hyundai Engineering &
Construction Co.
(Construction &
Housing)+ ................. 4,000 186,120
Korea Electric Power Corp.
(Electric) ................ 18,000 726,946
Korea First Bank
(Banking)+ ................ 83,000 719,827
Korea Housing Bank
(Banking)+ ................ 540 12,582
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
19
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SOUTH KOREA (CONTINUED)
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
Korea Mobile
Telecommunications
(Telecommunications) ...... 430 $ 519,070
Korea Zinc Co. (Metals &
Mining) ................... 14,100 323,309
Oriental Fire & Marine
Insurance (Insurance) ..... 4,200 147,564
Pohang Iron & Steel Co.
(Metals & Mining) ......... 5,100 416,023
Samsung Electronics (GDR
represents 1/2 non-voting
common share) 144A
(Electronics) ............. 11,374 275,820
Samsung Electronics (GDR
represents 1/2 non-voting
preferred share) 144A
(Electronics)+ ............ 5,236 104,720
Samsung Electronics (GDR
represents 1/2 voting
common share) 144A
(Electronics)+ ............ 266 10,906
Samsung Electronics (GDR
represents 1/2 voting
common share) 144A
(Electronics)+ ............ 884 45,305
Seoul City Gas Co. Ltd.
(Natural Gas) ............. 4,500 352,267
------------
6,544,807
------------
TAIWAN (5.3%)
Acer Incorporation (GDR)
(Computer Peripherals)+ ... 44,240 336,224
Asia Cement Corp. (GDS)
(Building Materials) ...... 83,865 1,698,275
China Steel Corp. (GDS)
(Metals & Mining) ......... 60,000 1,530,000
Hocheng Group Corp. (GDR)
144A (Building
Materials)+ ............... 13,114 162,286
President Enterprises Corp.
(GDR) (Food, Beverages &
Tobacco)+ ................. 72,051 1,459,033
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
</TABLE>
TAIWAN (CONTINUED)
<TABLE>
<S> <C> <C>
Siliconware Precision
Industries (GDR)
(Semiconductors)+ ......... 24,000 $ 189,000
Yageo Corp. (GDR)
(Electronics)+ ............ 68,600 514,500
------------
5,889,318
------------
THAILAND (12.4%)
Advanced Info Service Public
Co. Ltd.
(Telecommunications) ...... 95,900 1,419,666
Bangkok Bank Public Co. Ltd.
(Banking) ................. 159,000 2,153,452
Bangkok Expressway Public Co.
Ltd. (Transport &
Services)+ ................ 100,000 164,375
Banpu Public Co. Ltd. (Metals
& Mining) ................. 10,700 308,372
Central Pattana Public Co.
Ltd. (Real Estate) ........ 144,500 671,320
Dhana Siam Finance and
Securities Public Co. Ltd.
(Financial Services) ...... 126,500 702,246
Finance One Public Co. Ltd.
(Financial Services) ...... 83,000 535,922
Krung Thai Bank Public Co.
Ltd. (Banking) ............ 85,000 398,241
Land & House Public Co. Ltd.
(Real Estate) ............. 44,000 554,348
Modern Form Group Public Co.
Ltd. (Manufacturing) ...... 174,700 135,844
Phatra Thanakit Co. Ltd.
(Financial Services) ...... 45,000 313,592
Regional Container Line
Public Co. Ltd. (Packaging
& Containers) ............. 37,500 549,230
Saha-Union Public Co. Ltd.
(Textiles) ................ 200,000 313,002
Sahavirya Steel Industries
Public Co. Ltd. (Metals &
Mining)+ . 470,000 305,324
Siam Cement Public Co. Ltd.
(Building Materials) ...... 22,000 1,079,246
Siam Commercial Bank Co. Ltd.
(Banking) ................. 18,000 260,795
TelecomAsia Corp. Public Co.
Ltd.
(Telecommunications)+ ..... 674,000 1,479,396
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
20
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THAILAND (CONTINUED)
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
Thai Farmers Bank Public Co.
Ltd. (Banking) ............ 114,600 $ 1,254,322
Thai Petrochemical Industry
Public Co. Ltd.
(Chemicals) ............... 252,000 384,461
United Communication Industry
(Telecommunications-
Equipment) ................ 51,000 682,698
------------
13,665,852
------------
TOTAL COMMON STOCK
(COST $95,359,277) ....... 102,501,274
------------
CONVERTIBLE PREFERRED STOCKS (0.5%)
PHILIPPINES (0.5%)
Philippine Long Distance
Telephone Co. (GDS
represents 1 Series 2
Convertible Preferred)
(Utilities) (cost
$532,650) ................. 15,900 532,650
------------
PREFERRED STOCK (0.4%)
SOUTH KOREA (0.4%)
Mando Machinery Corp.
(Automotive Supplies) ..... 11,000 211,545
Shin Won Corp. (Apparels &
Textiles) ................. 13,530 193,733
------------
TOTAL PREFERRED STOCK (COST
$591,526) ................ 405,278
------------
RIGHTS (0.1%)+
SINGAPORE (0.1%)
Overseas Chinese Bank (expire
07/09/96) (Banking) ....... 7,600 61,061
------------
SOUTH KOREA (0.0%)(A)
Hana Bank (Expire 07/26/96)
(Banking) ................. 3,045 14,640
------------
TOTAL RIGHTS
(COST $55,410) ........... 75,701
------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
WARRANTS (0.9%)+
MALAYSIA (0.5%)
Petronas Dagangan Berhad
(Expire 02/23/99) (Oil-
Services) ................. 340,000 $ 501,435
------------
SINGAPORE (0.4%)
United Overseas Land Ltd.
(Expire 06/09/97) (Real
Estate) ................... 697,536 513,968
------------
TOTAL WARRANTS
(COST $1,028,686) ........ 1,015,403
------------
PRINCIPAL
AMOUNT
-----------
CONVERTIBLE BONDS (3.4%)
HONG KONG (0.3%)
Regal Hotels International,
5.25% due 12/13/08
(Restaurants & Hotels) .... $ 350,000 346,062
------------
MALAYSIA (1.3%)
Commerce Asset Holding
Berhad, 1.75% due 09/26/04
(Banking) ................. 720,000 860,400
Telekom Malaysia Berhad,
4.00% due 10/03/04
(Telecommunications) ...... 560,000 590,100
------------
1,450,500
------------
SOUTH KOREA (0.3%)
Ssangyong Oil Refining Co.
Ltd., 3.75% due 12/31/08
(Oil-Production) .......... 305,000 315,675
------------
TAIWAN (1.5%)
Far Eastern Department Stores
Ltd., 3.00% due 07/06/01
(Retail) .................. 600,000 569,250
Nan Ya Plastics Corp., 1.75%
due 07/19/01
(Chemicals) ............... 470,000 507,013
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
21
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- ----------------------------- ----------- ------------
<S> <C> <C>
</TABLE>
TAIWAN (CONTINUED)
<TABLE>
<S> <C> <C>
U-Ming Marine Transport
Corp., 1.50% due 02/07/01
(Transport & Services) .... $ 390,000 $ 349,050
Yang Ming Marine Transport,
2.00% due 10/06/01
(Transport & Services) .... 200,000 251,500
------------
1,676,813
------------
TOTAL CONVERTIBLE BONDS
(COST $3,714,252) ........ 3,789,050
------------
SHORT-TERM INVESTMENTS (1.5%)
EURO DOLLAR TIME DEPOSITS (1.5%)
State Street Cayman Islands,
4.88% due 07/01/96
(cost $1,651,000) ......... 1,651,000 1,651,000
------------
TOTAL INVESTMENTS
(COST $102,932,801) (99.6%) ............ 109,970,356
OTHER ASSETS IN EXCESS OF LIABILITIES
(0.4%) ................................. 471,826
------------
NET ASSETS (100.0%) ...................... $110,442,182
------------
------------
</TABLE>
- ------------------------
Note: For Federal Income Tax purposes, the cost of securities owned at June 30,
1996 was substantially the same as the cost of securities for financial
statement purposes.
+ -- Non-income producing security.
(a) -- Less than 0.1%
ADR -- American Depositary Receipt.
GDS -- Global Depositary Shares.
GDR -- Global Depositary Receipt.
144A -- Security restricted for resale to Qualified
Institutional Buyers.
The Accompanying Notes are an Integral Part of the Financial Statements.
22
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)(CONTINUED)
June 30, 1996
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
PERCENT OF
TOTAL
INVESTMENTS
-------------
<S> <C>
Banking............................................................................................. 16.26%
Real Estate......................................................................................... 13.75%
Telecommunications.................................................................................. 11.03%
Multi - Industry.................................................................................... 9.64%
Metals & Mining..................................................................................... 5.72%
Building Materials.................................................................................. 4.70%
Food, Beverages & Tobacco........................................................................... 4.40%
Entertainment, Leisure & Media...................................................................... 3.47%
Electric............................................................................................ 3.32%
Financial Services.................................................................................. 3.09%
Chemicals........................................................................................... 3.06%
Airlines............................................................................................ 2.63%
Electronics......................................................................................... 2.39%
Transport & Services................................................................................ 1.82%
Retail.............................................................................................. 1.80%
Computer Peripherals................................................................................ 1.16%
Restaurants & Hotels................................................................................ 1.09%
Telecommunication Services.......................................................................... 1.06%
Forest Products & Paper............................................................................. 1.00%
Insurance........................................................................................... 0.99%
Utilities........................................................................................... 0.80%
Automotive.......................................................................................... 0.77%
Telecommunications-Equipment........................................................................ 0.71%
Construction & Housing.............................................................................. 0.65%
Agriculture......................................................................................... 0.64%
Packaging & Containers.............................................................................. 0.51%
Oil-Services........................................................................................ 0.47%
Electrical Equipment................................................................................ 0.44%
Broadcasting & Publising............................................................................ 0.37%
Diversified Manufacturing........................................................................... 0.35%
Natural Gas......................................................................................... 0.33%
Capital Goods....................................................................................... 0.32%
Oil-Production...................................................................................... 0.29%
Textiles............................................................................................ 0.29%
Automotive Supplies................................................................................. 0.20%
Apparels & Textiles................................................................................. 0.18%
Semiconductors...................................................................................... 0.17%
Manufacturing....................................................................................... 0.13%
-------------
100.00%
-------------
-------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
23
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $102,932,801) $109,970,356
Foreign Currency at Value (Cost $312,407) 312,108
Cash 38,223
Unrealized Appreciation on Open Spot Foreign Currency Contracts 584
Receivable for Investments Sold 977,321
Dividends Receivable 319,684
Interest Receivable 52,318
Deferred Organization Expenses 25,469
------------
Total Assets 111,696,063
------------
LIABILITIES
Payable for Investments Purchased 991,727
Custody Fee Payable 112,771
Advisory Fee Payable 72,481
Organization Expenses Payable 5,750
Administrative Services Fee Payable 4,530
Administration Fee Payable 1,161
Fund Services Fee Payable 320
Accrued Expenses & Other Liabilities 65,141
------------
Total Liabilities 1,253,881
------------
NET ASSETS
Applicable to Investors' Beneficial Interests $110,442,182
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
24
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend Income (Net of Foreign Withholding Tax of $108,976 ) $1,157,622
Interest Income 134,734
----------
Investment Income 1,292,356
EXPENSES
Advisory Fee $ 414,049
Custodian Fees and Expenses 183,844
Professional Fees 29,654
Administrative Services Fee 12,972
Administration Fee 6,530
Fund Services Fee 2,840
Amortization of Organization Expenses 2,633
Printing Expenses 1,716
Trustees' Fees and Expenses 1,135
Insurance Expense 361
Registration Fees 349
Miscellaneous 1,164
----------
Total Expenses 657,247
Less: Reimbursement of Expenses (7,302)
----------
NET EXPENSES (649,945)
----------
NET INVESTMENT INCOME 642,411
NET REALIZED GAIN (LOSS) ON
Investment Transactions 3,216,295
Foreign Currency Transactions (198,727)
----------
Net Realized Gain 3,017,568
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Investments 4,622,842
Foreign Currency Contracts and Translations (61)
----------
Net Change in Unrealized Appreciation 4,622,781
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,282,760
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
25
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 5, 1995
(COMMENCEMENT
FOR THE SIX OF
MONTHS ENDED OPERATIONS)
JUNE 30, THROUGH
1996 DECEMBER 31,
(UNAUDITED) 1995
------------ ---------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 642,411 $ 783,140
Net Realized Gain on Investments and Foreign Currency
Transactions 3,017,568 2,768,176
Net Change in Unrealized Appreciation of Investments and
Foreign Currency Translations 4,622,781 2,414,409
------------ ---------------
Net Increase in Net Assets Resulting from Operations 8,282,760 5,965,725
------------ ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 38,835,059 104,554,882
Withdrawals (23,657,025) (23,539,419)
------------ ---------------
Net Increase from Investors' Transactions 15,178,034 81,015,463
------------ ---------------
Total Increase in Net Assets 23,460,794 86,981,188
NET ASSETS
Beginning of Period 86,981,388 200
------------ ---------------
End of Period $110,442,182 $ 86,981,388
------------ ---------------
------------ ---------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 5, 1995
FOR THE SIX (COMMENCEMENT
MONTHS OF
ENDED OPERATIONS)
JUNE 30, THROUGH
1996 DECEMBER 31,
(UNAUDITED) 1995
----------- ---------------
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses $ 1.26%(a) $ 1.40%(a)
Net Investment Income 1.24%(a) 1.18%(a)
Decrease reflected in Expense Ratio due to Expense
Reimbursement 0.01%(a) --
Portfolio Turnover 42%(b) 70%(b)
</TABLE>
- ------------------------
(a)Annualized.
(b)Not Annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
26
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Asia Growth Portfolio (the "Portfolio") one of three Portfolios comprising
The Series Portfolio (the "Series 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 under
the laws of the State of New York on June 24, 1994. The Portfolio commenced
operations on April 5, 1995. The Portfolio's investment objective is to achieve
a high total return from a portfolio of equity securities of companies in Asian
growth markets. The Declaration of Trust permits the Trustees to issue an
unlimited number of beneficial interests in the Portfolio.
Investments in Asian growth markets may involve certain considerations and risks
not typically associated with investments in the United States. Future economic
and political developments in Asian growth market countries could adversely
affect the liquidity or value, or both of such securities in which the Portfolio
is invested. The ability of the issuers of debt securities held by the Portfolio
to meet their obligations may be affected by economic and political developments
in a specific industry or region.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual amounts could differ from
those estimates. The following is a summary of the significant accounting
policies of the Portfolio:
a)The value of each security for which readily available market quotations
exists is based on a decision as to the broadest and most representative
market for such security. The value of such security will be based either
on the last sale price on a national securities exchange, or, in the
absence of recorded sales, at the readily available closing bid price on
such exchanges. Securities listed on a foreign exchange are valued at the
last quoted sale price available before the time when net assets are
valued. Unlisted securities are valued at the average of the quoted bid
and asked prices in the over-the-counter market. Securities or other
assets for which market quotations are not readily available are valued at
fair value in accordance with procedures established by the Portfolio's
Trustees. Such procedures may include the use of independent pricing
services, which use prices based upon yields or prices of securities of
comparable quality, coupon, maturity and type; indications as to values
from dealers; operating data and general market conditions. All portfolio
securities with a remaining maturity of less than 60 days are valued by
the amortized cost method.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the domestic market and
may also take place on days on which the domestic market is closed. If
events materially affecting the value of foreign securities occur between
the time when the exchange on which they are traded closes and the time
when the Portfolio's net assets are calculated, such securities will be
valued at fair value in accordance with procedures established by and
under the general supervision of the Portfolio's Trustees.
b)The books and records of the Portfolio are maintained in U.S. dollars. The
market values of investment securities, other assets and liabilities and
foreign currency contracts are translated at the prevailing exchange rates
at the end of the period. Purchases, sales, income and expense are
translated at the exchange rate prevailing on the respective dates of such
transactions. Translation
27
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
gains and losses resulting from changes in exchange rates during the
reporting period and gains and losses realized upon settlement of foreign
currency transactions are reported in the Statement of Operations.
Since the net assets of the Portfolio are presented at the exchange rates
and market values prevailing at the end of the period, the Portfolio does
not isolate the portion of the results of operations arising as a result
of changes in foreign exchange rates from the fluctuations arising from
changes in the market prices of securities during the period.
c)Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or at the time that the
relevant ex-dividend date and amount becomes known. Interest income, which
includes the amortization of premiums and discounts, if any, is recorded
on an accrual basis. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
d)The Portfolio may enter into forward and spot foreign currency contracts
to protect securities and related receivables against fluctuations in
future foreign currency rates. A forward contract is an agreement to buy
or sell currencies of different countries on a specified future date at a
specified rate. Risks associated with such contracts include the movement
in the value of the foreign currency relative to the U.S. dollar and the
ability of the counterparty to perform.
The market value of the contract will fluctuate with changes in currency
exchange rates. Contracts are valued daily based on procedures established
by and under the general supervision of the Portfolio's Trustees and the
change in the market value is recorded by the Portfolio as unrealized
appreciation or depreciation of foreign forward and spot currency contract
translations.
At June 30, 1996 the Portfolio had open spot foreign currency contracts as
follows:
SUMMARY OF OPEN CONTRACTS
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
FOREIGN CURRENCY SALE CONTRACTS PROCEEDS 6/30/96 (DEPRECIATION)
- ------------------------------------------------------------------------ ---------- ----------- -----------------
<S> <C> <C> <C>
Hong Kong Dollar, 123,668, expiring 7/1/96 $ 15,976 $ 15,977 $ (1)
Indonesian Rupiah, 35,697,600, expiring 7/1/96 15,325 15,337 (12)
Indonesian Rupiah, 67,034,724, expiring 7/2/96 28,808 28,815 (7)
Malaysian Ringgit, 107,306, expiring 7/1/96 42,948 43,004 (56)
Malaysian Ringgit, 303,974, expiring 7/2/96 121,737 121,821 (84)
Malaysian Ringgit, 176,114, expiring 7/3/96 70,610 70,580 30
Malaysian Ringgit, 168,944, expiring 7/3/96 67,699 67,706 (7)
---
(137)
---
</TABLE>
28
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
FOREIGN CURRENCY PURCHASE CONTRACTS COST 6/30/96 (DEPRECIATION)
- ------------------------------------------------------------------------ ---------- ----------- -----------------
<S> <C> <C> <C>
Indonesian Rupiah, 122,504,623, expiring 7/3/96 $ 52,635 $ 52,645 $ 10
Malaysian Ringgit, 61,314, expiring 7/1/96 24,582 24,572 (10)
Malaysian Ringgit, 18,016, expiring 7/2/96 7,217 7,220 3
Malaysian Ringgit, 231,115, expiring 7/3/96 112,455 112,661 206
Malaysian Ringgit, 105,585, expiring 7/3/96 42,238 42,315 77
Malaysian Ringgit, 58,619, expiring 7/3/96 23,462 23,492 30
Malaysian Ringgit, 709,045, expiring 7/3/96 283,777 284,159 382
Malaysian Ringgit, 166,798, expiring 7/5/96 66,795 66,846 51
Malaysian Ringgit, 96,380, expiring 7/8/96 38,638 38,626 (12)
Malaysian Ringgit, 96,380, expiring 7/8/96 38,638 38,626 (12)
Malaysian Ringgit, 92,598, expiring 7/9/96 37,110 37,106 (4)
---
721
---
Net Unrealized Appreciation on Foreign Currency Contracts $ 584
---
---
</TABLE>
e)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be taxable 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.
f)The Portfolio incurred organization expenses in the amount of $33,000.
These costs were deferred and are being amortized on a straight-line basis
over a five year period from the commencement of operations.
g)The Portfolio's custodian 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
market-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.
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 agreement,
the Portfolio pays Morgan at an annual rate of 0.80% of the Portfolio's
average daily net assets. For the six months ended June 30, 1996 such fees
amounted to $414,049.
b)The Portfolio has retained Signature Broker-Dealer Services, Inc.
("Signature") to serve as administrator and exclusive placement agent.
Signature provides administrative services necessary
29
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
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
Administration Agreement provided for a fee to be paid to Signature equal
to the Portfolio's proportionate share of a complex-wide fee based on the
following annual schedule: 0.03% on the first $7 billion of the aggregate
average daily net assets of the Portfolio and the other portfolios subject
to this agreement (the "Master Portfolios") and 0.01% on the aggregate
average daily net assets of the Master Portfolios in excess of $7 billion.
The portion of this charge payable by the Portfolio is determined by the
proportionate share its net assets bear to the total net assets of The
Pierpont Funds, The JPM Institutional Funds, The JPM Advisor Funds and the
Master Portfolios. For the six months ended June 30, 1996, such fees
amounted to $6,530.
Effective August 1, 1996, administrative functions provided by Signature
will be provided by Funds Distributor, Inc. ("FDI"), a registered
broker-dealer, and by Morgan. FDI will also become the Portfolio's
exclusive placement agent. Under a Co-Administration Agreement between FDI
and the Portfolio, FDI's fees are to be paid by the Portfolio. (see Note
2c).
c)The Portfolio has an Administrative Services Agreement (the "Services
Agreement") with Morgan under which Morgan is responsible for certain
aspects of the administration and operation of the Portfolio. Under the
Services Agreement, the Portfolio has agreed to pay Morgan a fee equal to
its proportionate share of an annual complex-wide charge. This charge is
calculated daily based on the aggregate net assets of the Master
Portfolios' in accordance with the following annual schedule: 0.06% on the
first $7 billion of the Master Portfolios aggregate average daily net
assets and 0.03% of the aggregate average daily net assets in excess of $7
billion. The portion of this charge payable by the Portfolio is determined
by the proportionate share that the Portfolio's net assets bear to the net
assets of the Master Portfolios and other investors in the Master
Portfolios for which Morgan provides similar services. For the six months
ended June 30, 1996, such fees amounted to $12,972.
Effective August 1, 1996, the Services Agreement will be amended such that
the aggregate complex-wide fees to be paid by the Portfolio under both the
amended Services Agreement and the Co-Administration Agreement (see Note
2b) will be calculated daily based on the aggregate average daily net
assets of the Master Portfolios in accordance with the following annual
schedule: 0.09% on the first $7 billion of the Master Portfolios aggregate
average daily net assets and 0.04% of the aggregate average daily net
assets in excess of $7 billion.
In addition, Morgan has agreed to reimburse the Portfolio to the extent
necessary to maintain the total operating expenses of the Portfolio at no
more than 1.25% of the average daily net assets of the Portfolio. For the
six months ended June 30, 1996, Morgan has agreed to reimburse the
Portfolio $7,302 for expenses under this agreement.
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 $2,840 for the six months ended June 30, 1996.
30
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996
- --------------------------------------------------------------------------------
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 the
Master Portfolios. The Trustees' Fees and Expenses shown in the financial
statements represent the Portfolio's allocated portion of the total fees
and expenses. The Portfolio's Chairman and Chief Executive 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 $400.
3. INVESTMENT TRANSACTIONS:
Investment transactions (excluding short-term investments) for the six months
ended June 30, 1996 were as follows:
<TABLE>
<S> <C>
COST OF PROCEEDS FROM
PURCHASES SALES
- ------------- -------------
$ 59,105,481 $41,831,889
</TABLE>
31
<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 EUROPEAN EQUITY FUND
THE PIERPONT JAPAN EQUITY FUND
THE PIERPONT ASIA GROWTH 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 ASIA GROWTH FUND
SEMI-ANNUAL REPORT
JUNE 30, 1996
