JP MORGAN FUNDS, 485BPOS, 1998-11-27

JP MORGAN FUNDS
485BPOS, 1998-11-27

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As filed with the Securities and Exchange Commission on November 27, 1998.
Registration Nos. 033-54632 and 811-07340

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 58

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 59

J.P. MORGAN FUNDS
(formerly, The JPM Pierpont Funds)
(Exact Name of Registrant as Specified in Charter)

60 State Street, Suite 1300, Boston, Massachusetts 02109
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code:
(617) 557-0700

Christopher Kelley, c/o Funds Distributor, Inc.
60 State Street, Suite 1300, Boston, Massachusetts 02109
(Name and Address of Agent for Service)

Copy to: John E. Baumgardner, Jr., Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant to paragraph (b)
[X] on (November 27, 1998) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

The Tax Exempt Money Market Portfolio has also executed this registration
statement.

<PAGE>

J.P. MORGAN FUNDS
(J.P. MORGAN TAX EXEMPT MONEY MARKET FUND)
CROSS-REFERENCE SHEET
(As Required by Rule 495)

PART A ITEM NUMBER: Prospectus Headings.

1. COVER PAGE: Cover Page.

2. SYNOPSIS: Introduction; Investor Expenses.

3. CONDENSED FINANCIAL INFORMATION: Financial Highlights.

4. GENERAL DESCRIPTION OF REGISTRANT: Goal; Investment Approach;
Risk/Return Summary; Model Allocation; Master/Feeder Structure; Risk and Reward
Elements.

5. MANAGEMENT OF THE FUND: Cover Page; J.P. Morgan; Portfolio Management;
Management and Administration.

5A. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE: Performance.

6. CAPITAL STOCK AND OTHER SECURITIES: Investing Directly; Account and
Transaction Policies; Dividends and Distributions; Tax Considerations;
Master/Feeder Structure.

7. PURCHASE OF SECURITIES BEING OFFERED: Introduction; Investing Directly;
Opening your Account; Adding to your Account; Account and Transaction Policies.

8. REDEMPTION OR REPURCHASE: Selling Shares; Account and Transaction
Policies.

9. PENDING LEGAL PROCEEDINGS: Not Applicable.

PART B ITEM NUMBER: Statement of Additional Information Headings.

10. COVER PAGE: Cover Page.

11. TABLE OF CONTENTS: Table of Contents.

12. GENERAL INFORMATION AND HISTORY: General.

13. INVESTMENT OBJECTIVE AND POLICIES: Investment Objective and Policies;
Additional Investments; Investment Restrictions; Quality and Diversification
Requirements; Appendix A.

14. MANAGEMENT OF THE FUND: Trustees and Officers.

15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES: Description of
Shares.

16. INVESTMENT ADVISORY AND OTHER SERVICES: Investment Advisor;
Distributor; Co-Administrator; Services Agent; Custodian and Transfer Agent;
Shareholder Servicing; Eligible Institutions; Independent Accountants; Expenses.

17. BROKERAGE ALLOCATION AND OTHER PRACTICES: Portfolio Transactions.

18. CAPITAL STOCK AND OTHER SECURITIES: Massachusetts Trust; Description of
Shares.

19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED: Net Asset
Value; Purchase of Shares; Redemption of Shares; Exchange of Shares; Dividends
and Distributions.

20. TAX STATUS: Taxes.

21. UNDERWRITERS: Distributor.

22. CALCULATION OF PERFORMANCE DATA: Performance Data.

23. FINANCIAL STATEMENTS: Financial Statements.

PART C. Information required to be included in Part C is set forth under
the appropriate items, so numbered, in Part C of this Registration Statement.

EXPLANATORY NOTE

This post-effective amendment No. 58 (the "Amendment") to the Registrant's
registration statement on Form N-1A (File No. 033-54632) (the "Registration
Statement") is being filed to update Registrant's disclosure in the Prospectus
and Statement of Additional Information relating to the Registrant's J.P. Morgan
Tax Exempt Money Market Fund, a separate series of shares of the Registrant for
the purpose of updating financial information for the fiscal year ended August
31, 1998.

<PAGE>

NOVEMBER 30, 1998

PROSPECTUS

J.P. MORGAN MONEY MARKET FUNDS

Prime Money Market Fund

Federal Money Market Fund

Tax Exempt Money Market Fund

- --------------------------------------
Seeking to provide high current income
consistent with the preservation of
capital and same-day liquidity

This prospectus contains essential information for anyone investing in these
funds. Please read it carefully and keep it for reference.

Shares in these funds are not bank deposits and are not guaranteed or insured by
any bank, government entity, or the FDIC. Each fund seeks to maintain a stable
$1 share price, without guaranteeing that it will always be able to do so.

As with all mutual funds, the fact that these shares are registered with the
Securities and Exchange Commission does not mean that the commission approves
them or guarantees that the information in this prospectus is correct or
adequate. It is a criminal offense to state or suggest otherwise.

Distributed by Funds Distributor, Inc.

JPMorgan

<PAGE>

CONTENTS
- --------------------------------------------------------------------------------

2
Principles and techniques common
to the funds in this prospectus

MONEY MARKET MANAGEMENT APPROACH

Money market investment process ................................2
The spectrum of money market funds .............................3
Money market funds and stability ...............................3

4
Each fund's goal, investment approach, risks, expenses, performance, and
financial highlights

J.P. MORGAN MONEY MARKET FUNDS

J.P. Morgan Prime Money Market Fund ............................4
J.P. Morgan Federal Money Market Fund ..........................6
J.P. Morgan Tax Exempt Money Market Fund .......................8

10
Investing in the J.P. Morgan Money Market Funds

YOUR INVESTMENT

Investing through a financial professional ....................10
Investing through an employer-sponsored retirement plan .......10
Investing through an IRA or rollover IRA ......................10
Investing directly ............................................10
Opening your account ..........................................10
Adding to your account ........................................10
Selling shares ................................................11
Account and transaction policies ..............................11
Dividends and distributions ...................................12
Tax considerations ............................................12

13
More about the funds' business operations

FUND DETAILS

Master/feeder structure .......................................13
Management and administration .................................13

FOR MORE INFORMATION...................................back cover

<PAGE>

INTRODUCTION
- --------------------------------------------------------------------------------

J.P. MORGAN MONEY MARKET FUNDS

Each of these funds invests in high-quality short-term debt securities by
investing through a master portfolio (another fund with the same goal). Each
fund accrues dividends daily, pays them to shareholders monthly, and seeks to
maintain a stable $1 share price.

WHO MAY WANT TO INVEST

The funds are designed for investors who:
o want an investment that strives to preserve capital
o want regular income from a high quality portfolio
o want a highly liquid investment
o are looking for an interim investment
o are pursuing a short-term goal
o are seeking income that is generally exempt from state and local income taxes
(in the case of Federal Money Market Fund) or exempt from federal income tax
(in the case of Tax Exempt Money Market Fund)

The funds are not designed for investors who:
o are investing for long-term growth
o are investing for high income
o require the added security of the FDIC insurance
o in the case of Tax Exempt Money Market Fund, are investing through an IRA or
other tax-advantaged retirement plan

J.P. MORGAN

Known for its commitment to proprietary research and its disciplined investment
strategies, J.P. Morgan is the asset management choice for many of the world's
most respected corporations, financial institutions, governments, and
individuals. Today, J.P. Morgan employs over 300 analysts and portfolio managers
around the world and has approximately $275 billion in assets under management,
including assets managed by the funds' advisor, J.P. Morgan Investment
Management Inc.

- --------------------------------------------------------------------------------
Before you invest

Investors considering these funds should understand that:
o There is no assurance that these funds will meet their investment goals
o Future returns will not necessarily resemble past performance
o These funds do not represent complete investment programs

<PAGE>

MONEY MARKET MANAGEMENT APPROACH
- --------------------------------------------------------------------------------
The J.P. Morgan money market funds invest exclusively in high-quality short-term
debt obligations.

While each fund follows its own strategy, the funds as a group
share a single investment philosophy. This philosophy, developed by the funds'
advisor, emphasizes investment quality through in-depth research of short-term
securities and their issuers. This allows each fund to focus on providing
current income without compromising share price stability.

MONEY MARKET INVESTMENT PROCESS

In researching short-term securities, J.P. Morgan's credit analysts enhance the
data furnished by rating agencies by drawing on the insights of J.P. Morgan's
fixed income trading specialists and equity analysts. Only securities highly
rated by independent rating agencies as well as J.P. Morgan's proprietary
ratings system are considered for investments.

In managing the funds described in this prospectus, J.P. Morgan employs a
three-step process:

Maturity determination Based on analysis of a range of factors, including
current yields, economic forecasts, and anticipated fiscal and monetary
policies, J.P. Morgan establishes the desired weighted average maturity for each
fund within the permissible 90-day range. Controlling weighted average maturity
allows the funds to manage risk, since securities with shorter maturities are
typically less sensitive to interest rate shifts than those with longer
maturities.

Sector allocation Analysis of the yields available in different sectors of the
short-term debt market allows J.P. Morgan to adjust each fund's sector
allocation, with the goal of enhancing current income while also maintaining
diversification across permissible sectors.

Security selection Based on the results of the firm's credit research and each
fund's maturity determination and sector allocation, the portfolio managers and
dedicated fixed-income traders make buy and sell decisions according to each
fund's goal and strategy.

[GRAPHIC]

J.P. Morgan uses a disciplined process
to control each fund's sensitivity
to interest rates

[GRAPHIC]

The funds invest across different
sectors for diversification and to
take advantage of yield spreads

[GRAPHIC]

Each fund selects its securities as
described later in this prospectus

2 MONEY MARKET MANAGEMENT APPROACH

<PAGE>

- --------------------------------------------------------------------------------
THE SPECTRUM OF MONEY MARKET FUNDS

The funds described in this prospectus differ primarily in the types of
securities they hold and in the tax status of the income they offer. The table
below provides an overview of the main types of securities in which each fund
may invest. The distinguishing features of each money market fund are described
in more detail on the following pages.

MONEY MARKET FUNDS
AND STABILITY

Money market funds are subject to a range of federal regulations designed
to promote stability. For example, money market funds must maintain a weighted
average maturity of no more than 90 days, and generally may not invest in any
securities with a remaining maturity of more than 13 months. Keeping the
weighted average maturity this short helps funds in their pursuit of a stable $1
share price.

Primary investments
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Prime Federal Tax Exempt
Money Money Money
Market Market Market
- --------------------------------------------------------------------------------
U.S.
Treasuries* o o
- --------------------------------------------------------------------------------
U.S.
Government
Agency
instruments o o
- --------------------------------------------------------------------------------
Domestic
& foreign
bank
obligations o
- --------------------------------------------------------------------------------
Domestic
& foreign
short-term
corporate
obligations o
- --------------------------------------------------------------------------------
Foreign
governments o
- --------------------------------------------------------------------------------
Illiquid
holdings o
- --------------------------------------------------------------------------------
Repurchase
agreements o
- --------------------------------------------------------------------------------
Tax-exempt
municipal
obligations** o

* Income is generally exempt from state and local income taxes
** Income is generally exempt from federal income taxes

MONEY MARKET MANAGEMENT APPROACH 3

<PAGE>

J.P. MORGAN PRIME MONEY MARKET FUND TICKER SYMBOL: PPMX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN PRIME MONEY MARKET FUND)

[GRAPHIC]

GOAL

The fund's goal is to maximize current income consistent with the preservation
of capital and same-day liquidity. This goal can be changed without shareholder
approval.

[GRAPHIC]

INVESTMENT APPROACH

The fund looks for investments across a broad spectrum of U.S.
dollar-denominated money market securities, typically emphasizing different
types of securities at different times in order to take advantage of changing
yield differentials. The fund's investments may include obligations issued by
the U.S. Treasury, government agencies, domestic and foreign banks and
corporations, foreign governments, repurchase agreements, as well as
asset-backed securities, taxable municipal obligations, and other money market
instruments. Some of these investments may be illiquid or purchased on a
when-issued or delayed delivery basis.

[GRAPHIC]

POTENTIAL RISKS AND REWARDS

As with all money market funds, the fund's investments are subject to various
risks, which, while generally considered to be minimal, could cause its share
price to fall below $1. For example, the issuer or guarantor of a portfolio
security or the counterparty to a contract could default on its obligation. An
unexpected rise in interest rates could also lead to a loss in share price if
the fund is near the maximum allowable average weighted maturity at the time. To
the extent that the fund invests in foreign securities, the fund could lose
money because of foreign government actions, political instability, or lack of
adequate and accurate information. Also, the fund may have difficulty valuing
its illiquid holdings and may be unable to sell them at the time or price it
desires. While these possibilities exist, the fund's investment process and
management policies are designed to minimize the likelihood and impact of these
risks. To date, through this process, the fund's share price has never deviated
from $1.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages
approximately $275 billion, including more than $12 billion using the same
strategy as the fund.

The portfolio management team is led by Robert R. Johnson, vice president, who
has been on the team and at J.P. Morgan since June of 1988, Daniel B. Mulvey,
vice president, who joined the team in January of 1995 and has been at J.P.
Morgan since 1991, and by John Donohue, vice president, who has been on the team
since joining J.P. Morgan in June of 1997. Prior to managing this fund, Mr.
Donohue was an Institutional Money Market Portfolio Manager at Goldman Sachs &
Co.

MONEY MARKET FUNDS AND STABILITY

Money market funds are subject to a range of federal regulations designed to
promote stability. For example, money market funds must maintain a weighted
average maturity of no more than 90 days, and generally may not invest in any
securities with a remaining maturity of more than 13 months. Keeping the
weighted average maturity this short helps funds in their pursuit of a stable $1
share price.

<PAGE>

INVESTOR EXPENSES

The current expenses you should expect to pay as an investor in the fund are
shown at right. The fund has no sales, redemption, exchange, or account fees,
although some institutions may charge you a fee for shares you buy through them.
The annual fund expenses shown are deducted from fund assets prior to
performance calculations.

Footnotes for this section are shown on next page.

Annual fund operating expenses(1) (%)

Management fees 0.12
Marketing (12b-1) fees None
Other expenses 0.37
- ----------------------------------------
Total operating expenses 0.49
- ----------------------------------------

Expense example

The example below uses the same assumptions as other fund prospectuses: $1,000
initial investment, 5% annual total return, expenses unchanged, all shares sold
at the end of each time period. The example is for comparison only; the fund's
actual return and expenses will be different.
- --------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 5 16 27 62
- --------------------------------------------------------------

4 J.P. MORGAN PRIME MONEY MARKET FUND

<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE (unaudited)

Average annual total return (%)
Shows performance over time, for periods ended December 31, 1997
- --------------------------------------------------------------------------------
1 yr. 5 yrs. 10 yrs.
J.P. Morgan Prime Money Market Fund(2) (after expenses) 5.41 4.63 5.73
- --------------------------------------------------------------------------------
IBC's First Tier Money Fund Average(3) (after expenses) 5.04 4.36 5.45
- --------------------------------------------------------------------------------

Year-by-year total return (%) Shows changes in returns by calendar year
- --------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

12%

7.38 9.13 8.04 6.07 3.67 2.83 3.95 5.79 5.21 5.41
7.08 8.87 7.82 5.71 3.37 2.70 3.75 5.48 4.85 5.04
- --------------------------------------------------------------------------------

J.P. Morgan Prime Money Market Fund(2)
IBC's First Tier Money Fund Average(3)

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

Per-share data For fiscal periods ended
- --------------------------------------------------------------------------------

<TABLE>

<CAPTION>
11/30/88 11/30/89 11/30/90 11/30/91 11/30/92 11/30/93
11/30/94
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Net asset value, beginning of year ($) 1.00 1.00 1.00 1.00 1.00 1.00
1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.0705 0.0877 0.0780 0.0612 0.0371 0.0281
0.0367
Net realized gain (loss)
on investment ($) -- -- -- 0.0002 0.0006 0.0003
(0.0000)(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.0705 0.0877 0.0780 0.0614 0.0377 0.0284
0.0367
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.0705) (0.0877) (0.0780) (0.0612) (0.0371) (0.0281)
(0.0367)
Net realized gain ($) -- -- -- (0.0002) (0.0006) (0.0003)
- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.0705) (0.0877) (0.0780) (0.0614) (0.0377) (0.0284)
(0.0367)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 1.00 1.00 1.00 1.00 1.00 1.00
1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (%) 7.25 9.15 8.09 6.31 3.83 2.89
3.73
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ millions) 1,898 2,156 2,356 3,059 2,700 2,563
2,004
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.49 0.46 0.47 0.43 0.43 0.43
0.43
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 7.05 8.77 7.80 6.10 3.74 2.82
3.64
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) -- -- -- 0.01 0.01 0.01
0.01
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>

<CAPTION>
11/30/95 11/30/96 11/30/97 5/31/98
(unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ($) 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.0557 0.0509 0.0524 0.0269
Net realized gain (loss)
on investment ($) 0.0005 0.0001 (0.0000)(4) (0.0000)(4)
- --------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.0562 0.0510 0.0524 0.0269
- --------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.0557) (0.0509) (0.0524) (0.0269)
Net realized gain ($) -- (0.0005) (0.0003) (0.0000)(4)
- --------------------------------------------------------------------------------------------------
Total distributions ($) (0.0557) (0.0514) (0.0527) (0.0269)
- --------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------
Total return (%) 5.71 5.27 5.40 2.72(6)
- --------------------------------------------------------------------------------------------------
Ratios and supplemental data
- --------------------------------------------------------------------------------------------------
Net assets, end of year ($ millions) 2,153 2,155 2,318 2,563
- --------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.41 0.40 0.38 0.36(7)
- --------------------------------------------------------------------------------------------------
Net investment income (%) 5.56 5.09 5.25 5.40(7)
- --------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) 0.005 0.005 -- --
- --------------------------------------------------------------------------------------------------
</TABLE>
The Financial Highlights above, except as noted, have been audited by
PricewaterhouseCoopers LLP, the fund's independent accountants.

(1) The fund has a master/feeder structure as described on page 13. This table
shows the fund's expenses and its share of master portfolio expenses for the
past fiscal year, expressed as a percentage of the fund's average net
assets. Other expenses and total operating expenses have been restated to
show the current fee arrangements and show expenses for the past fiscal year
using the current fees as if they had been in effect during the past fiscal
year expressed as a percentage of average net assets.

(2) The fund commenced operations on 7/12/93. Returns reflect performance of The
Pierpont Money Market Fund, the fund's predecessor, prior to that date. The
Pierpont Money Market Fund commenced operations on 10/1/82.

(3) Consists of the IBC/Donoghue Taxable Money Market Fund Average from
inception through November 30, 1995 and IBC's First Tier Money Fund Average
thereafter.

(4) Less than $0.0001.

(5) Less than 0.01%.

(6) Not annualized.

(7) Annualized

J.P. MORGAN PRIME MONEY MARKET FUND 5

<PAGE>

J.P. MORGAN FEDERAL
MONEY MARKET FUND TICKER SYMBOL: PTYXX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN FEDERAL MONEY MARKET FUND)

[GRAPHIC]

GOAL

The fund's goal is to provide high current income consistent with the
preservation of capital and same-day liquidity. This goal can be changed without
shareholder approval.

[GRAPHIC]

INVESTMENT APPROACH

The fund purchases securities that offer very high credit quality and pay
regular income that is generally free from state and local income taxes. It
invests exclusively in U.S. government agency obligations such as the Federal
Farm Credit Bank, the Tennessee Valley Authority, the Federal Home Loan Bank,
the Student Loan Marketing Association, and in obligations of the U.S. Treasury.
Some of these investments may be purchased on a when-issued or delayed delivery
basis.

[GRAPHIC]

POTENTIAL RISKS AND REWARDS

While the fund's U.S. Treasury obligations are backed by the full faith and
credit of the Government, investors should bear in mind that any agency
obligations the fund may hold do not have this guarantee, and that in any case
government guarantees do not extend to shares of the fund itself.

Most of the fund's income is generally exempt from state and local personal
income taxes and from some corporate income taxes (although not federal income
taxes). Because of this beneficial tax status, the fund's yields are generally
lower than those of taxable money market funds when compared on a pre-tax basis.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages
approximately $275 billion, including more than $12 billion using the same
strategy as the fund.

The portfolio management team is led by Robert R. Johnson, vice president, who
has been on the team since the fund's inception and has been at J.P. Morgan
since 1988, Daniel B. Mulvey, vice president, who joined the team in October of
1996 and has been at J.P. Morgan since 1991, and by John Donohue, vice
president, who has been on the team since joining J.P. Morgan in June of 1997.
Prior to managing this fund, Mr. Donohue was an Institutional Money Market
Portfolio Manager at Goldman Sachs & Co.

MONEY MARKET FUNDS AND STABILITY

Money market funds are subject to a range of federal regulations designed to
promote stability. For example, money market funds must maintain a weighted
average maturity of no more than 90 days, and generally may not invest in any
securities with a remaining maturity of more than 13 months. Keeping the
weighted average maturity this short helps funds in their pursuit of a stable $1
share price.

<PAGE>

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

Footnotes for this section are shown on next page.

Annual fund operating expenses(1) (%)

Management fees 0.20

Marketing (12b-1) fees None

Other expenses(2)
(after reimbursement) 0.25
- ---------------------------------
Total operating expenses(2)
(after reimbursement) 0.45
- ---------------------------------

Expense example

The example below uses the same assumptions as other fund prospectuses: $1,000
initial investment, 5% annual total return, expenses unchanged, all shares sold
at the end of each time period. The example is for comparison only; the fund's
actual return and expenses will be different.
- ---------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 5 14 25 57
- ---------------------------------------------------------------------------

6 J.P. MORGAN FEDERAL MONEY MARKET FUND

<PAGE>

PERFORMANCE (unaudited)

Average annual total return (%)
Shows performance over time, for periods ended December 31, 1997
- --------------------------------------------------------------------------------
1 yr. 3 yrs. Since inception
J.P. Morgan Federal Money Market
Fund(3) (after expenses) 5.18 5.25 4.45
- --------------------------------------------------------------------------------
IBC's U.S. Government & Agency Money
Market Fund Average(4) (after expenses) 4.83 4.89 4.18
- --------------------------------------------------------------------------------

Year-by-year total return (%) Shows changes in returns by calendar year
- --------------------------------------------------------------------------------
1994 1995 1996 1997

3.78 5.59 4.99 5.18
3.52 5.19 4.67 4.83
- --------------------------------------------------------------------------------

J.P. Morgan Federal Money Market Fund(3)
IBC'S U.S. Government & Agency Money Market Fund Average(4)

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

Per-share data For fiscal periods ended
- --------------------------------------------------------------------------------
<TABLE>

<CAPTION>
10/31/93 10/31/94 10/31/95 10/31/96 10/31/97
4/30/98

(unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ($) 1.00 1.00 1.00 1.00 1.00 1.00
Income from investment operations:
Net investment income ($) 0.0208 0.0333 0.0536 0.0489 0.0501 0.0257
Net realized gain (loss)
on investment ($) 0.0002 (0.0000)(5) 0.0004 0.0006 0.0001
(0.0000)(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.0210 0.0333 0.0540 0.0495 0.0502 0.0257
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.0208) (0.0333) (0.0536) (0.0489) (0.0501)
(0.0257)
Net realized gain ($) -- (0.0002) -- (0.0003) (0.0005) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.0208) (0.0335) (0.0536) (0.0492) (0.0506)
(0.0257)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period ($) 1.00 1.00 1.00 1.00 1.00 1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 2.10(6) 3.41 5.49 5.03 5.17
2.60(6)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 83,097 118,631 171,120 185,424 239,074 337,805
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.48(7) 0.40 0.40 0.40 0.40
0.41(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 2.53(7) 3.40 5.36 4.89 5.00
5.18(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) 0.26(7) 0.22 0.15 0.13 0.12
0.07(7)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

The Financial Highlights above, except as noted, have been audited by
PricewaterhouseCoopers LLP, the fund's independent accountants.

(2) Without reimbursement, other expenses and total operating expenses would
have been 0.42% and 0.62%, respectively. These amounts have been restated
and assume that the current fee arrangements had been in effect during the
entire fiscal year. Effective 3/1/99, the expense cap for the fund will be
0.55%. This reimbursement arrangement can be changed or terminated at
any time at the option of J.P. Morgan.

(3) The fund commenced operations on 1/4/93. Returns reflect performance of the
fund from 1/31/93 through 12/31/97. This data is based on historical
earnings and is not intended to indicate future performance.

(4) Consists of the IBC/Donoghue U.S. Treasury & Repo Money Market Fund Average
through 12/31/95 and IBC's U.S. Government & Agency Money Market Fund
Average thereafter.

(5) Less than $0.0001.

(6) Not annualized.

(7) Annualized.

J.P. MORGAN FEDERAL MONEY MARKET FUND 7

<PAGE>

J.P. MORGAN TAX EXEMPT
MONEY MARKET FUND TICKER SYMBOL: PPTXX
- --------------------------------------------------------------------------------
REGISTRANT: J.P. MORGAN FUNDS
(J.P. MORGAN TAX EXEMPT MONEY MARKET FUND)

[GRAPHIC]

GOAL

The fund's goal is to maximize current income that is exempt from federal income
tax consistent with the preservation of capital and same-day liquidity. This
goal can be changed without shareholder approval.

[GRAPHIC]

INVESTMENT APPROACH

The fund invests primarily in high quality municipal obligations whose income is
exempt from federal income taxes. The fund's municipal obligations must fall
into the highest short-term rating category (top two highest categories for New
York State obligations) or be of equivalent quality. The fund may also invest in
certain structured municipal obligations, and in certain municipal or other
obligations whose income is subject to tax, including the alternative minimum
tax. Although the fund is permitted to hold these other obligations or cash, it
aims to be fully invested in municipal obligations. In order to maintain
liquidity, the fund may buy securities with puts that allow the fund to
liquidate the securities on short notice. Some of the fund's securities may be
purchased on a when-issued or delayed delivery basis.

[GRAPHIC]

POTENTIAL RISKS AND REWARDS

The fund's yield will vary in response to changes in interest rates. How well
the fund's yield compares to the yields of similar money market funds will
depend on the success of the investment process described on page 2. As with all
money market funds, the fund's investments are subject to various risks, which,
while generally considered to be minimal, could cause its share price to fall
below $1. For example, the issuer or guarantor of a portfolio security or the
counterparty to a contract could default on its obligation. An unexpected rise
in interest rates could also lead to a loss in share price if the fund is near
the maximum allowable average weighted maturity at the time. However, the fund's
investment process and management policies are designed to minimize the
likelihood and impact of these risks. To date, through this process, the fund's
share price has never deviated from $1.

The fund's income is generally exempt from federal income taxes. A small portion
may be exempt from state or local income taxes.

PORTFOLIO MANAGEMENT

The fund's assets are managed by J.P. Morgan, which currently manages
approximately $275 billion, including more than $12 billion using the same
strategy as the fund.

The portfolio management team is led by Daniel B. Mulvey, vice president, who
has been on the team since August of 1995 and has been at J.P. Morgan since
1991, and by Richard W. Oswald, vice president, who has been on the team since
joining J.P. Morgan in October of 1996. Prior to managing this fund, Mr. Oswald
served as Treasurer of CBS and President of its finance unit.

MONEY MARKET FUNDS AND STABILITY

Money market funds are subject to a range of federal regulations designed to
promote stability. For example, money market funds must maintain a weighted
average maturity of no more than 90 days, and generally may not invest in any
securities with a remaining maturity of more than 13 months. Keeping the
weighted average maturity this short helps funds in their pursuit of a stable $1
share price.

<PAGE>

- --------------------------------------------------------------------------------
INVESTOR EXPENSES

Footnotes for this section are shown on next page.

Annual fund operating expenses(1) (%)

Management fees 0.16

Marketing (12b-1) fees None

Other expenses 0.37
- ----------------------------------------------
Total operating expenses 0.53
- ----------------------------------------------

Expense example

The example below uses the same assumptions as other fund prospectuses: $1,000
initial investment, 5% annual total return, expenses unchanged, all shares sold
at the end of each time period. The example is for comparison only; the fund's
actual return and expenses will be different.
- ------------------------------------------------------------------------------
1 yr. 3 yrs. 5 yrs. 10 yrs.
Your cost($) 5 17 30 66
- ------------------------------------------------------------------------------

8 J.P. MORGAN TAX EXEMPT MONEY MARKET FUND

<PAGE>

PERFORMANCE (unaudited)

Average annual total return (%)
Shows performance over time, for periods ended December 31, 1997
- --------------------------------------------------------------------------------
1 yr. 5 yrs. 10 yrs.
J.P. Morgan Tax Exempt Money
Market Fund(2) (after expenses) 3.26 2.89 3.78
- --------------------------------------------------------------------------------
IBC's Tax Exempt Money Market
Fund Average(3) (after expenses) 3.09 2.72 3.65
- --------------------------------------------------------------------------------

4.93 6.11 5.58 4.17 2.71 2.04 2.50 3.52 3.12 3.26
4.80 5.91 5.49 4.16 2.56 1.93 2.34 3.34 2.93 3.09
- --------------------------------------------------------------------------------

J.P. Morgan Tax Exempt Money Market Fund(2)
IBC's Tax Exempt Money Market Fund Average(3)

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

Per-share data For fiscal years ended August 31
- --------------------------------------------------------------------------------
<TABLE>

<CAPTION>
1989 1990 1991 1992 1993(2) 1994
1995
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Net asset value, beginning of year ($) 1.00 1.00 1.00 1.00 1.00 1.00
1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.0581 0.0550 0.0460 0.0317 0.0214 0.0212
0.0336
Net realized gain (loss) on investment ($) 0.0001 -- (0.0000)(4) 0.0002 0.0001 (0.0000)(4)
(0.0002)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations ($) 0.0582 0.0550 0.0460 0.0319 0.0215 0.0212
0.0334
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.0581) (0.0550) (0.0460) (0.0317) (0.0214) (0.0212)
(0.0336)
Net realized gain ($) (0.0001) -- -- -- (0.0002)
(0.0000)(4) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions ($) (0.0582) (0.0550) (0.0460) (0.0317) (0.0216) (0.0212)
(0.0336)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year ($) 1.00 1.00 1.00 1.00 1.00 1.00
1.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total return (%) 5.82 5.50 4.60 3.19 2.15 2.14
3.41
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios and supplemental data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ($ millions) 876 903 877 922 1,007
974 985
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.53 0.57 0.55 0.53 0.52 0.52
0.51
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (%) 5.79 5.51 4.60 3.16 2.14 2.10
3.35
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) -- -- 0.01 0.01 0.01 0.01
0.005
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>

<CAPTION>
1996 1997 1998
<S> <C> <C> <C>
Net asset value, beginning of year ($) 1.00 1.00 1.00
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment income ($) 0.0318 0.0314 0.0318
Net realized gain (loss) on investment ($) (0.0000)(4) (0.0000)(4) (0.0000)(4)
- -------------------------------------------------------------------------------
Total from investment operations ($) 0.0318 0.0314 0.0318
- -------------------------------------------------------------------------------
Less distributions to shareholders from:
Net investment income ($) (0.0318) (0.0314) (0.0318)
Net realized gain ($) -- -- --
- -------------------------------------------------------------------------------
Total distributions ($) (0.0318) (0.0314) (0.0318)
- -------------------------------------------------------------------------------
Net asset value, end of year ($) 1.00 1.00 1.00
- -------------------------------------------------------------------------------
Total return (%) 3.23 3.18 3.23
- -------------------------------------------------------------------------------
Ratios and supplemental data
Net assets, end of year ($ millions) 1,050 1,103 1,240
- -------------------------------------------------------------------------------
Ratio to average net assets:
Expenses (%) 0.48 0.46 0.43
- -------------------------------------------------------------------------------
Net investment income (%) 3.17 3.13 3.18
- -------------------------------------------------------------------------------
Decrease reflected in expense ratio due
to expense reimbursement (%) -- -- --
- -------------------------------------------------------------------------------
</TABLE>
The Financial Highlights above have been audited by PricewaterhouseCoopers LLP,
the fund's independent accountants.

(2) The fund commenced operations on 7/12/93. Returns reflect performance of The
Pierpont Tax Exempt Money Market Fund, the fund's predecessor, prior to that
date. The Pierpont Tax Exempt Money Market Fund commenced operations on
9/12/83.

(3) IBC's Tax Exempt Money Market Fund Average is an average of all major tax
free money market fund returns.

(4) Less than $0.0001.

(5) Less than 0.01%.

J.P. MORGAN TAX EXEMPT MONEY MARKET FUND 9

<PAGE>

YOUR INVESTMENT
- --------------------------------------------------------------------------------

For your convenience, the J.P. Morgan Funds offer several ways to start and add
to fund investments.

INVESTING THROUGH A FINANCIAL PROFESSIONAL

If you work with a financial professional, either at J.P. Morgan or elsewhere,
he or she is prepared to handle your planning and transaction needs. Your
financial professional will be able to assist you in establishing your fund
account, executing transactions, and monitoring your investment. If your fund
investment is not held in the name of your financial professional and you prefer
to place a transaction order yourself, please use the instructions for investing
directly.

INVESTING THROUGH AN EMPLOYER-SPONSORED RETIREMENT PLAN

Your fund investments are handled through your plan. Refer to your plan
materials or contact your benefits office for information on buying, selling, or
exchanging fund shares.

INVESTING THROUGH AN IRA OR ROLLOVER IRA

Please contact a J.P. Morgan Retirement Services Specialist at 1-888-576-4472
for information on J.P. Morgan's comprehensive IRA services, including lower
minimum investments.

INVESTING DIRECTLY

Investors may establish accounts without the help of an intermediary by using
the instructions below and at right:

o Determine the amount you are investing. The minimum amount for initial
investments in a fund is $2,500 and for additional investments $500, although
these minimums may be less for some investors. For more information on minimum
investments, call 1-800-521-5411.

o Complete the application, indicating how much of your investment you want to
allocate to which fund(s). Please apply now for any account privileges you may
want to use in the future, in order to avoid the delays associated with adding
them later on.

o Mail in your application, making your initial investment as shown at right.

For answers to any questions, please speak with a J.P. Morgan Funds Services
Representative at 1-800-521-5411.

<PAGE>

OPENING YOUR ACCOUNT
By wire

o Mail your completed application to the Shareholder Services Agent.

o Call the Shareholder Services Agent to obtain an account number and to place a
purchase order. Funds that are wired without a purchase order will be returned
uninvested.

o After placing your purchase order, instruct your bank to wire the amount of
your investment to:

State Street Bank & Trust Company
Routing number: 021-000-238
Credit: J.P. Morgan Funds
Account number: 001-57-689
FFC: your account number, name of registered owner(s) and fund name

By check

o Make out a check for the investment amount payable to J.P. Morgan Funds.

o Mail the check with your completed application to the Transfer Agent.

By exchange

o Call the Shareholder Services Agent to effect an exchange.

ADDING TO YOUR ACCOUNT

By wire

o Call the Shareholder Services Agent to place a purchase order. Funds that are
wired without a purchase order will be returned uninvested.

o Once you have placed your purchase order, instruct your bank to wire the
amount of your investment as described above. By check o Make out a check for
the investment amount payable to J.P. Morgan Funds.

o Mail the check with a completed investment slip to the Transfer Agent. If you
do not have an investment slip, attach a note indicating your account number
and how much you wish to invest in which fund(s).

By exchange

o Call the Shareholder Services Agent to effect an exchange.

10 YOUR INVESTMENT

<PAGE>

- --------------------------------------------------------------------------------
SELLING SHARES

By phone -- wire payment

o Call the Shareholder Services Agent to verify that the wire redemption
privilege is in place on your account. If it is not, a representative can help
you add it.

o Place your wire request. If you are transferring money to a non-Morgan
account, you will need to provide the representative with the personal
identification number (PIN) that was provided to you when you opened your fund
account.

By phone -- check payment

o Call the Shareholder Services Agent and place your request. Once your request
has been verified, a check for the net amount, payable to the registered
owner(s), will be mailed to the address of record. For checks payable to any
other party or mailed to any other address, please make your request in
writing (see below).

In writing

o Write a letter of instruction that includes the following information: The
name of the registered owner(s) of the account; the account number; the fund
name; the amount you want to sell; and the recipient's name and address or
wire information, if different from those of the account registration.

o Indicate whether you want the proceeds sent by check or by wire.

o Make sure the letter is signed by an authorized party. The Shareholder
Services Agent may require additional information, such as a signature
guarantee.

o Mail the letter to the Shareholder Services Agent.

By exchange

o Call the Shareholder Services Agent to effect an exchange.

ACCOUNT AND TRANSACTION POLICIES

Telephone orders The funds accept telephone orders from all shareholders. To
guard against fraud, the funds require shareholders to use a PIN, and may record
telephone orders or take other reasonable precautions. However, if a fund does
take such steps to ensure the authenticity of an order, you may bear any loss if
the order later proves fraudulent.

Exchanges You may exchange shares in these funds for shares in any other J.P.
Morgan or J.P. Morgan Institutional mutual fund at no charge (subject to the
securities laws of your state). When making exchanges, it is important to
observe any applicable minimums. Keep in mind that, for tax purposes, an
exchange is considered a sale.

A fund may alter, limit, or suspend its exchange policy at any time.

Business days and NAV calculations The funds' regular business days are the same
as those of the New York Stock Exchange. Each fund calculates its net asset
value per share (NAV) every business day at 4:00 p.m. (5:00 p.m. for Prime Money
Market Fund) eastern time.

Timing of orders Orders to buy or sell shares are executed at the next NAV
calculated after the order has been accepted. Purchase and redemption orders for
each fund must be received by the times indicated in the table below:

Fund Cut-off Time
Prime Money Market 5:00 p.m.
Federal Money Market 2:00 p.m.
Tax Exempt Money Market 12:00 noon

For the purchase to be effective and dividends to be earned on the same day,
immediately available funds must be received by 4:00 p.m. (5:00 p.m. for Prime
Money Market Fund) eastern time on a fund business day. A fund has the right to
suspend redemption of shares and to postpone payment of proceeds for up to seven
days or as permitted by law.

Transfer Agent Shareholder Services Agent
State Street Bank and Trust Company J.P. Morgan Funds Services
P.O. Box 8411 522 Fifth Avenue
Boston, MA 02266-8411 New York, NY 10036
Attention: J.P. Morgan Funds Services 1-800-521-5411

Representatives are available 8:00 a.m. to 5:00 p.m. eastern
time on fund business days.

YOUR INVESTMENT 11

<PAGE>

Timing of settlements When you buy shares, you will become the owner of record
when a fund receives your payment.

Redemption orders for each fund received by the respective cut-off times will be
paid in immediately available funds, normally on the same day, according to
instructions on file.

When you sell shares that you recently purchased by check, your order will be
executed at the next NAV but the proceeds will not be available until your check
clears. This may take up to 15 days.

Statements and reports The funds send monthly account statements as well as
confirmations after each purchase or sale of shares (except reinvestments).
Every six months, each fund sends out an annual or semi-annual report containing
information on its holdings and a discussion of recent and anticipated market
conditions and fund performance.

Accounts with below-minimum balances If your account balance falls below the
minimum for 30 days as a result of selling shares (and not because of
performance), the fund reserves the right to request that you buy more shares or
close your account. If your account balance is still below the minimum 60 days
after notification, the fund reserves the right to close out your account and
send the proceeds to the address of record.

DIVIDENDS AND DISTRIBUTIONS

Substantially all income dividends are declared daily and paid monthly. If all
of an investor's shares are redeemed during the month, accrued but unpaid
dividends are paid with the redemption proceeds. Shares of the funds earn
dividends on the business day their purchase is effective, but not on the
business day their redemption is effective.

Dividends and distributions are reinvested in additional fund shares.
Alternatively, you may instruct your financial professional or J.P. Morgan Funds
Services to have them sent to you by check, credited to a separate account, or
invested in another J.P. Morgan Fund.

TAX CONSIDERATIONS

In general, selling shares, exchanging shares, and receiving distributions
(whether reinvested or taken in cash) are all taxable events. The transactions
below typically create the following tax liabilities:

Transaction Tax status

Income dividends from Prime Ordinary income
and Federal Money Market
Funds

Income dividends from Exempt from federal
Tax Exempt Money Market income taxes
Fund

Short-term capital gains Ordinary income
distributions

Every January, each fund issues tax information on its distributions for the
previous year.

Any investor for whom a fund does not have a valid taxpayer identification
number will be subject to backup withholding for taxes.

The tax considerations described in this section do not apply to tax-deferred
accounts or other non-taxable entities.

Because each investor's tax circumstances are unique, please consult your tax
professional about your fund investment.

12 YOUR INVESTMENT

<PAGE>

FUND DETAILS
- --------------------------------------------------------------------------------

MASTER/FEEDER STRUCTURE

As noted earlier, each fund is a "feeder" fund that invests in a master
portfolio. (Except where indicated, this prospectus uses the term "the fund" to
mean the feeder fund and its master portfolio taken together.)

Each master portfolio accepts investments from other feeder funds, and all the
feeders of a given master portfolio bear the portfolio's expenses in proportion
to their assets. However, each feeder can set its own transaction minimums,
fund-specific expenses, and other conditions. This means that one feeder could
offer access to the same master portfolio on more attractive terms, or could
experience better performance, than another feeder. Information about other
feeders is available by calling 1-800-521-5411. Generally, when a master
portfolio seeks a vote, its feeder fund will hold a shareholder meeting and cast
its vote proportionately, as instructed by its shareholders. Fund shareholders
are entitled to one full or fractional vote for each dollar or fraction of a
dollar invested.

Each fund and its master portfolio expect to maintain consistent goals, but if
they do not, the fund will withdraw from the master portfolio, receiving its
assets either in cash or securities. Each fund's trustees would then consider
whether the fund should hire its own investment adviser, invest in a different
master portfolio, or take other action.

MANAGEMENT AND ADMINISTRATION

The feeder funds described in this prospectus and, their corresponding master
portfolios are all governed by the same trustees. The trustees are responsible
for overseeing all business activities. The trustees are assisted by Pierpont
Group, Inc., which they own and operate on a cost basis; costs are shared by all
funds governed by these trustees. Funds Distributor Inc., as co-administrator,
along with J.P. Morgan, provides fund officers. J.P. Morgan, as
co-administrator, oversees each fund's other service providers.

J.P. Morgan receives the following fees for investmentadvisory and other
services:

Advisory services 0.20% of the first $1 billion of
each master portfolio's average
net assets plus 0.10% over
$1 billion

Administrative services Master portfolio's and fund's pro-
(fee shared with Funds rata portions of 0.09% of the
Distributor, Inc.) first $7 billion in J.P. Morgan-
advised portfolios, plus 0.04%
over $7 billion

Shareholder services 0.25% of each fund's average
net assets

J.P. Morgan may pay fees to certain firms and professionals for providing
recordkeeping or other services in connection with investments in a fund.

Year 2000 Fund operations and shareholders could be adversely affected if the
computer systems used by J.P. Morgan, the funds' other service providers and
other entities with computer systems linked to the funds do not properly process
and calculate January 1, 2000 and after date-related information. J.P. Morgan is
working to avoid these problems and to obtain assurances from other service
providers that they are taking similar steps. However, it is not certain that
these actions will be sufficient to prevent these date-related problems from
adversely impacting fund operations and shareholders. In addition, to the extent
that operations of issuers of securities held by the funds are impaired by
date-related problems or prices of securities decline as a result of real or
perceived date-related problems of issuers held by the funds or generally, the
net asset value of the fund will decline.

FUND DETAILS 13

<PAGE>

FOR MORE INFORMATION

For investors who want more information on these funds, the following documents
are available free upon request:

Annual/Semi-annual Reports Contain financial statements, performance data,
information on portfolio holdings, and a written analysis of market conditions
and fund performance for a fund's most recently completed fiscal year or
half-year.

Statement of Additional Information (SAI) Provides a fuller technical and legal
description of a fund's policies, investment restrictions, and business
structure. This prospectus incorporates each fund's SAI by reference.

Copies of the current versions of these documents, along with other information
about the funds, may be obtained by contacting:

J.P. Morgan Funds
J.P. Morgan Funds Services
522 Fifth Avenue
New York, NY 10036

Telephone: 1-800-521-5411

Hearing impaired: 1-888-468-4015

Email: [email protected]

Text-only versions of these documents and this prospectus are available, upon
payment of a duplicating fee, from the Public Reference Room of the Securities
and Exchange Commission in Washington, D.C. (1-800-SEC-0330) and may be viewed
on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. The
funds' investment company registration numbers are:

J.P. Morgan Prime Money Market Fund ....................811-07340 and 033-54632
J.P. Morgan Federal Money Market Fund...................811-07340 and 033-54632
J.P. Morgan Tax Exempt Money Market Fund................811-07340 and 033-54632

J.P. MORGAN FUNDS AND THE MORGAN TRADITION

The J.P. Morgan Funds combine a heritage of integrity and financial leadership
with comprehensive, sophisticated analysis and management techniques. Drawing on
J.P. Morgan's extensive experience and depth as an investment manager, the J.P.
Morgan Funds offer a broad array of distinctive opportunities for mutual fund
investors.

JPMorgan
- -----------------------------------------------------------------------
J.P. Morgan Funds

Advisor Distributor
J.P. Morgan Investment Management Inc. Funds Distributor, Inc.
522 Fifth Avenue 60 State Street
New York, NY 10036 Boston, MA 02109
1-800-521-5411 1-800-221-7930

<PAGE>

J.P. MORGAN FUNDS

J.P. MORGAN TAX EXEMPT MONEY MARKET FUND

STATEMENT OF ADDITIONAL INFORMATION

NOVEMBER 30, 1998

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, BUT CONTAINS
ADDITIONAL INFORMATION WHICH SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
DATED NOVEMBER 30, 1998 FOR THE FUND LISTED ABOVE, AS SUPPLEMENTED FROM TIME TO
TIME. ADDITIONALLY, THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY
REFERENCE THE FINANCIAL STATEMENTS INCLUDED IN THE ANNUAL REPORT RELATING TO THE
FUND LISTED ABOVE. THE PROSPECTUS AND THESE FINANCIAL STATEMENTS, INCLUDING THE
AUDITOR'S REPORT THEREON, ARE AVAILABLE, WITHOUT CHARGE, UPON REQUEST FROM FUNDS
DISTRIBUTOR, INC., ATTENTION: J.P. MORGAN FUNDS (800) 221-7930.

<PAGE>

Table of Contents

Page

General......................................................................1
Investment Objective and Policies............................................1
Investment Restrictions.....................................................10
Trustees and Officers.......................................................12
Investment Advisor..........................................................16
Distributor.................................................................18
Co-Administrator............................................................19
Services Agent..............................................................20
Custodian and Transfer Agent................................................20
Shareholder Servicing.......................................................21
Financial Professionals. . . . . . . . . . . . . . . . . . . . . . . . . . .21
Independent Accountants.....................................................22
Expenses....................................................................22
Purchase of Shares..........................................................22
Redemption of Shares........................................................23
Exchange of Shares..........................................................24
Dividends and Distributions.................................................24
Net Asset Value.............................................................24
Performance Data............................................................25
Portfolio Transactions......................................................26
Massachusetts Trust.........................................................28
Description of Shares.......................................................29
Special Information Concerning
Investment Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Taxes.......................................................................32
Additional Information......................................................34
Appendix A - Description of Security Ratings...............................A-1

<PAGE>

GENERAL

This Statement of Additional Information relates only to the J.P. Morgan
Tax Exempt Money Market Fund (the "Fund"). The Fund is a series of shares of
beneficial interest of the J.P. Morgan Funds, an open-end management investment
company formed as a Massachusetts business trust (the "Trust"). In addition to
the Fund, the Trust consists of other series representing separate investment
funds (each a "J.P. Morgan Fund"). The other J.P. Morgan Funds are covered by
separate Statements of Additional Information.

This Statement of Additional Information describes the financial history,
investment objective and policies, management and operation of the Fund and
provides additional information with respect to the Fund and should be read in
conjunction with the Fund's current Prospectus (the "Prospectus"). Capitalized
terms not otherwise defined herein have the meanings accorded to them in the
Prospectus. The Trust's executive offices are located at 60 State Street, Suite
1300, Boston, Massachusetts 02109.

Unlike other mutual funds which directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective by
investing all of its investable assets in a corresponding Master Portfolio (the
"Portfolio"), an open-end management investment company having the same
investment objective as the Fund. The Fund invests in the Portfolio through a
two-tier master-feeder investment fund structure. See "Special Information
Concerning Investment Structure."

The Portfolio is advised by J.P. Morgan Investment Management Inc. ("JPMIM"
or the "Advisor").

Investments in the Fund are not deposits or obligations of, or guaranteed
or endorsed by, Morgan Guaranty Trust Company of New York, ("Morgan"), an
affiliate of the Advisor, 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. An investment in the Fund is
subject to risk that may cause the value of the investment to fluctuate, and
when the investment is redeemed, the value may be higher or lower than the
amount originally invested by the investor.

INVESTMENT OBJECTIVE AND POLICIES

The following discussion supplements the information regarding the
investment objective of the Fund and the policies to be employed to achieve the
objective by the Portfolio as set forth herein and in the Prospectus. Since the
investment characteristics and experiences of the Fund correspond directly with
those of the Portfolio, the discussion in this Statement of Additional
Information focuses on the investments and investment policies of the Portfolio.
Accordingly, references below to the Portfolio also include the Fund; similarly,
references to the Fund also include the Portfolio unless the context requires
otherwise.

The Fund is designed for investors who seek high current income consistent
with the preservation of capital and same-day liquidity from a portfolio of high
quality money market instruments. The Fund's investment objective is to maximize
current income that is exempt from federal income tax consistent with the
preservation of capital. The Fund attempts to achieve this objective by
investing all of its investable assets in The Tax Exempt Money Market Portfolio
(the "Portfolio"), a diversified open-end management investment company having
the same investment objective as the Fund.

<PAGE>

The Portfolio attempts to achieve its investment objective by maintaining a
dollar-weighted average portfolio maturity of not more than 90 days and by
investing in U.S. dollar-denominated securities described in this Statement of
Additional Information that meet certain rating criteria, present minimal credit
risks, have effective maturities of not more than thirteen months and earn
interest wholly exempt from federal income tax in the opinion of bond counsel
for the issuer. If attractive municipal obligations are not available, the Fund
may hold cash rather than invest in taxable money market instruments. The
Portfolio, however, may temporarily invest up to 20% of total assets in taxable
securities in abnormal market conditions, for defensive purposes only. For
purposes of this calculation, obligations that generate income that may be
treated as a preference item for purposes of the alternative minimum tax shall
not be considered taxable securities. See "Quality and Diversification
Requirements." Interest on these securities may be subject to state and local
taxes. For more detailed information regarding tax matters, including the
applicability of the alternative minimum tax, see "Taxes."

Money Market Instruments

A description of the various types of money market instruments that may be
purchased by the Fund appears below. Also see "Quality and Diversification
Requirements."

Tax Exempt Obligations

The Fund may invest in tax exempt obligations to the extent consistent with
the Fund's investment objective and policies. A description of the various types
of tax exempt obligations which may be purchased by the Fund appears below. See
"Quality and Diversification Requirements."

Municipal Bonds. Municipal bonds are debt obligations issued by the states,
territories and possessions of the United States and the District of Columbia,
by their political subdivisions and by duly constituted authorities and
corporations. For example, states, territories, possessions and municipalities
may issue municipal bonds to raise funds for various public purposes such as
airports, housing, hospitals, mass transportation, schools, water and sewer
works. They may also issue municipal bonds to refund outstanding obligations and
to meet general operating expenses. Public authorities issue municipal bonds to
obtain funding for privately operated facilities, such as housing and pollution
control facilities, for industrial facilities or for water supply, gas,
electricity or waste disposal facilities.

Municipal bonds may be general obligation or revenue bonds. General
obligation bonds are secured by the issuer's pledge of its full faith, credit
and taxing power for the payment of principal and interest. Revenue bonds are
payable from revenues derived from particular facilities, from the proceeds of a
special excise tax or from other specific revenue sources. They are not
generally payable from the general taxing power of a municipality.

Municipal Notes. Municipal notes are subdivided into three categories of
short-term obligations: municipal notes, municipal commercial paper and
municipal demand obligations.

Municipal notes are short-term obligations with a maturity at the time of
issuance ranging from six months to five years. The principal types of municipal
notes include tax anticipation notes, bond anticipation notes, revenue
anticipation notes, grant anticipation notes and project notes. Notes sold in

<PAGE>

anticipation of collection of taxes, a bond sale, or receipt of other
revenues are usually general obligations of the issuing municipality or agency.
Municipal commercial paper typically consists of very short-term unsecured
negotiable promissory notes that are sold to meet seasonal working capital or
interim construction financing needs of a municipality or agency. While these
obligations are intended to be paid from general revenues or refinanced with
long-term debt, they frequently are backed by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks or institutions.

Municipal demand obligations are subdivided into two types: variable rate
demand notes and master demand obligations.

Variable rate demand notes are tax exempt municipal obligations or
participation interests that provide for a periodic adjustment in the interest
rate paid on the notes. They permit the holder to demand payment of the notes,
or to demand purchase of the notes at a purchase price equal to the unpaid
principal balance, plus accrued interest either directly by the issuer or by
drawing on a bank letter of credit or guaranty issued with respect to such note.
The issuer of the municipal obligation may have a corresponding right to prepay
at its discretion the outstanding principal of the note plus accrued interest
upon notice comparable to that required for the holder to demand payment. The
variable rate demand notes in which the Fund may invest are payable, or are
subject to purchase, on demand usually on notice of seven calendar days or less.
The terms of the notes provide that interest rates are adjustable at intervals
ranging from daily to six months, and the adjustments are based upon the prime
rate of a bank or other appropriate interest rate index specified in the
respective notes. Variable rate demand notes are valued at amortized cost; no
value is assigned to the right of the Fund to receive the par value of the
obligation upon demand or notice.

Master demand obligations are tax exempt municipal obligations that provide
for a periodic adjustment in the interest rate paid and permit daily changes in
the amount borrowed. The interest on such obligations is, in the opinion of
counsel for the borrower, excluded from gross income for federal income tax
purposes. For a description of the attributes of master demand obligations, see
"Money Market Instruments" above. Although there is no secondary market for
master demand obligations, such obligations are considered by the Fund to be
liquid because they are payable upon demand. The Fund has no specific percentage
limitations on investments in master demand obligations.

The Fund may purchase securities of the type described above if they have
effective maturities within thirteen months. As required by regulation of the
Securities and Exchange Commission (the "SEC"), this means that on the date of
acquisition the final stated maturity (or if called for redemption, the
redemption date) must be within thirteen months or the maturity must be deemed
to be no more than thirteen months because of a maturity shortening mechanism,
such as a variable interest rate, coupled with a conditional or unconditional
right to resell the investment to the issuer or a third party. See "Variable
Rate Demand Notes" and "Puts." A substantial portion of the Fund's portfolio is
subject to maturity shortening mechanisms consisting of variable interest rates
coupled with unconditional rights to resell the securities to the issuers either
directly or by drawing on a domestic or foreign bank letter of credit or other
credit support arrangement. See "Foreign Investments."

Puts. The Fund may purchase without limit municipal bonds or notes together
with the right to resell the bonds or notes to the seller at an

<PAGE>

agreed price or yield within a specified period prior to the maturity date
of the bonds or notes. Such a right to resell is commonly known as a "put." The
aggregate price for bonds or notes with puts may be higher than the price for
bonds or notes without puts. Consistent with the Fund's investment objective and
subject to the supervision of the Trustees, the purpose of this practice is to
permit the Fund to be fully invested in tax exempt securities while preserving
the necessary liquidity to purchase securities on a when-issued basis, to meet
unusually large redemptions, and to purchase at a later date securities other
than those subject to the put. The principal risk of puts is that the writer of
the put may default on its obligation to repurchase. The Advisor will monitor
each writer's ability to meet its obligations under puts.

Puts may be exercised prior to the expiration date in order to fund
obligations to purchase other securities or to meet redemption requests. These
obligations may arise during periods in which proceeds from sales of Fund shares
and from recent sales of portfolio securities are insufficient to meet
obligations or when the funds available are otherwise allocated for investment.
In addition, puts may be exercised prior to the expiration date in order to take
advantage of alternative investment opportunities or in the event the Advisor
revises its evaluation of the creditworthiness of the issuer of the underlying
security. In determining whether to exercise puts prior to their expiration date
and in selecting which puts to exercise, the Advisor considers the amount of
cash available to the Fund, the expiration dates of the available puts, any
future commitments for securities purchases, alternative investment
opportunities, the desirability of retaining the underlying securities in the
Fund's portfolio and the yield, quality and maturity dates of the underlying
securities.

The Fund values any municipal bonds and notes which are subject to puts at
amortized cost. No value is assigned to the put. The cost of any such put is
carried as an unrealized loss from the time of purchase until it is exercised or
expires. The Board of Trustees would, in connection with the determination of
the value of a put, consider, among other factors, the creditworthiness of the
writer of the put, the duration of the put, the dates on which or the periods
during which the put may be exercised and the applicable rules and regulations
of the SEC.

Since the value of the put is partly dependent on the ability of the put
writer to meet its obligation to repurchase, the Fund's policy is to enter into
put transactions only with municipal securities dealers who are approved by the
Advisor. Each dealer will be approved on its own merits, and it is the Fund's
general policy to enter into put transactions only with those dealers which are
determined to present minimal credit risks. In connection with such
determination, the Trustees will review regularly the Advisor's list of approved
dealers, taking into consideration, among other things, the ratings, if
available, of their equity and debt securities, their reputation in the
municipal securities markets, their net worth, their efficiency in consummating
transactions and any collateral arrangements, such as letters of credit,
securing the puts written by them. Commercial bank dealers normally will be
members of the Federal Reserve System, and other dealers will be members of the
National Association of Securities Dealers, Inc. or members of a national
securities exchange. The Trustees have directed the Advisor not to enter into
put transactions with any dealer which in the judgment of the Advisor becomes
more than a minimal credit risk. In the event that a dealer should default on
its obligation to repurchase an underlying security, the Fund is unable to
predict whether all or any portion of any loss sustained could subsequently be
recovered from such dealer.

The Trust has been advised by counsel that the Fund will be considered the
owner of the securities subject to the puts so that the interest on the

<PAGE>

securities is tax exempt income to the Fund. Such advice of counsel is
based on certain assumptions concerning the terms of the puts and the attendant
circumstances.

Taxable Investments

The Portfolio attempts to invest its assets in tax exempt securities and
when investments are not available, may hold cash or may invest to a limited
extent in taxable securities. While the Fund does not currently intend to invest
in taxable securities, in abnormal market conditions for defensive purposes
only, it may invest up to 20% of the value of its total assets in securities,
the interest income on which may be subject to federal, state or local income
taxes. The taxable investments permitted for the Portfolio include obligations
of the U.S. Government and its agencies and instrumentalities, bank obligations,
commercial paper and repurchase agreements.

The Fund may make investments in other debt securities with remaining
effective maturities of not more than thirteen months, including without
limitation corporate bonds, and other obligations described in the Prospectus or
this Statement of Additional Information.

U.S. Treasury Securities. The Fund may invest in direct obligations of the
U.S. Treasury, including Treasury bills, notes and bonds, all of which are
backed as to principal and interest payments by the full faith and credit of the
United States.

Additional U.S. Government Obligations. The Fund may invest in obligations
issued or guaranteed by U.S. Government agencies or instrumentalities. These
obligations may or may not be backed by the "full faith and credit" of the
United States. Securities which are backed by the full faith and credit of the
United States include obligations of the Government National Mortgage
Association, the Farmers Home Administration, and the Export-Import Bank. In the
case of securities not backed by the full faith and credit of the United States,
the Fund must look principally to the federal agency issuing or guaranteeing the
obligation for ultimate repayment and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
meet its commitments. Securities in which the Fund may invest that are not
backed by the full faith and credit of the United States include, but are not
limited to: (i) obligations of the Tennessee Valley Authority, the Federal Home
Loan Mortgage Corporation, the Federal Home Loan Banks and the U.S. Postal
Service, each of which has the right to borrow from the U.S. Treasury to meet
its obligations; (ii) securities issued by the Federal National Mortgage
Association, which are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; and (iii) obligations of the
Federal Farm Credit System and the Student Loan Marketing Association, each of
whose obligations may be satisfied only by the individual credits of the issuing
agency.

Bank Obligations. The Fund, unless otherwise noted in the Prospectus or
below, may invest in negotiable certificates of deposit, time deposits and
bankers' acceptances of (i) banks, savings and loan associations and savings
banks which have more than $2 billion in total assets and are organized under
the laws of the United States or any state, (ii) foreign branches of these banks
or of foreign banks of equivalent size (Euros) and (iii) U.S. branches of
foreign banks of equivalent size (Yankees). The Fund may not invest in
obligations of foreign branches of foreign banks. The Fund will not invest in
obligations for which the Advisor, or any of its affiliated persons, is the
ultimate obligor or accepting bank.

<PAGE>

Commercial Paper. The Fund may invest in commercial paper, including master
demand obligations. Master demand obligations are obligations that provide for a
periodic adjustment in the interest rate paid and permit daily changes in the
amount borrowed. Master demand obligations are governed by agreements between
the issuer and Morgan acting as agent, for no additional fee. The monies loaned
to the borrower come from accounts managed by the Morgan or its affiliates,
pursuant to arrangements with such accounts. Interest and principal payments are
credited to such accounts. Morgan, an affiliate of the Advisor, has the right to
increase or decrease the amount provided to the borrower under an obligation.
The borrower has the right to pay without penalty all or any part of the
principal amount then outstanding on an obligation together with interest to the
date of payment. Since these obligations typically provide that the interest
rate is tied to the Federal Reserve commercial paper composite rate, the rate on
master demand obligations is subject to change. Repayment of a master demand
obligation to participating accounts depends on the ability of the borrower to
pay the accrued interest and principal of the obligation on demand which is
continuously monitored by Morgan. Since master demand obligations typically are
not rated by credit rating agencies, the Fund may invest in such unrated
obligations only if at the time of an investment the obligation is determined by
the Advisor to have a credit quality which satisfies the Fund's quality
restrictions. See "Quality and Diversification Requirements." Although there is
no secondary market for master demand obligations, such obligations are
considered by the Fund to be liquid because they are payable upon demand. The
Fund does not have any specific percentage limitation on investments in master
demand obligations. It is possible that the issuer of a master demand obligation
could be a client of Morgan to whom Morgan, in its capacity as a commercial
bank, has made a loan.

Repurchase Agreements. The Fund, unless otherwise noted in the Prospectus
or below, may enter into repurchase agreements with brokers, dealers or banks
that meet the credit guidelines approved by the Fund's Trustees. In a repurchase
agreement, the Fund buys a security from a seller that has agreed to repurchase
the same security at a mutually agreed upon date and price. The resale price
normally is in excess of the purchase price, reflecting an agreed upon interest
rate. This interest rate is effective for the period of time the Fund is
invested in the agreement and is not related to the coupon rate on the
underlying security. A repurchase agreement may also be viewed as a fully
collateralized loan of money by the Fund to the seller. The period of these
repurchase agreements will usually be short, from overnight to one week, and at
no time will the Fund invest in repurchase agreements for more than 397 days.
The securities which are subject to repurchase agreements, however, may have
maturity dates in excess of 397 days from the effective date of the repurchase
agreement. The Fund will always receive securities as collateral whose market
value is, and during the entire term of the agreement remains, at least equal to
100% of the dollar amount invested by the Fund in the agreement plus accrued
interest, and the Fund will make payment for such securities only upon physical
delivery or upon evidence of book entry transfer to the account of the
Custodian. The Fund will be fully collateralized within the meaning of paragraph
(a)(4) of Rule 2a-7 under the Investment Company Act of 1940, as amended (the
"1940 Act"). If the seller defaults, the Fund might incur a loss if the value of
the collateral securing the repurchase agreement declines and might incur
disposition costs in connection with liquidating the collateral. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization upon disposal of the collateral by the Fund may be delayed or
limited.

The Fund may make investments in other debt securities with remaining

<PAGE>

effective maturities of not more than thirteen months, including without
limitation corporate bonds, and other obligations described in the Prospectus or
this Statement of Additional Information.

Additional Investments

When-Issued and Delayed Delivery Securities. The Fund may purchase
securities on a when-issued or delayed delivery basis. For example, delivery of
and payment for these securities can take place a month or more after the date
of the purchase commitment. The purchase price and the interest rate payable, if
any, on the securities are fixed on the purchase commitment date or at the time
the settlement date is fixed. The value of such securities is subject to market
fluctuation and for money market instruments and other fixed income securities
no interest accrues to the Fund until settlement takes place. At the time the
Fund makes the commitment to purchase securities on a when-issued or delayed
delivery basis, it will record the transaction, reflect the value each day of
such securities in determining its net asset value and, if applicable, calculate
the maturity for the purposes of average maturity from that date. At the time of
settlement a when-issued security may be valued at less than the purchase price.
To facilitate such acquisitions, the Fund will maintain with the Custodian a
segregated account with liquid assets, consisting of cash, U.S. Government
securities or other appropriate securities, in an amount at least equal to such
commitments. On delivery dates for such transactions, the Fund will meet its
obligations from maturities or sales of the securities held in the segregated
account and/or from cash flow. If the Fund chooses to dispose of the right to
acquire a when-issued security prior to its acquisition, it could, as with the
disposition of any other portfolio obligation, incur a gain or loss due to
market fluctuation. Also, a Fund may be disadvantaged if the other party to the
transaction defaults. It is the current policy of the Fund not to enter into
when-issued commitments exceeding in the aggregate 15% of the market value of
the Fund's total assets, less liabilities other than the obligations created by
when-issued commitments.

Investment Company Securities. Securities of other investment companies may
be acquired by the Fund and Portfolio to the extent permitted under the 1940 Act
or any order pursuant thereto. These limits currently require that, as
determined immediately after a purchase is made, (i) not more than 5% of the
value of the Fund's total assets will be invested in the securities of any one
investment company, (ii) not more than 10% of the value of its total assets will
be invested in the aggregate in securities of investment companies as a group,
and (iii) not more than 3% of the outstanding voting stock of any one investment
company will be owned by the Fund, provided however, that the Fund may invest
all of its investable assets in an open-end investment company that has the same
investment objective as the Fund (its corresponding Portfolio). As a shareholder
of another investment company, the Fund or Portfolio would bear, along with
other shareholders, its pro rata portion of the other investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that the Fund or Portfolio bears directly in
connection with its own operations.

Reverse Repurchase Agreements. The Fund, unless otherwise noted in the
Prospectus or below, may enter into reverse repurchase agreements. In a reverse
repurchase agreement, the Fund sells a security and agrees to repurchase the
same security at a mutually agreed upon date and price reflecting the interest
rate effective for the term of the agreement. For purposes of the 1940 Act a
reverse repurchase agreement is also considered as

<PAGE>

the borrowing of money by the Fund and, therefore, a form of leverage.
Leverage may cause any gains or losses for a Fund to be magnified. The Fund will
invest the proceeds of borrowings under reverse repurchase agreements. In
addition, the Fund will enter into a reverse repurchase agreement only when the
interest income to be earned from the investment of the proceeds is greater than
the interest expense of the transaction. The Fund will not invest the proceeds
of a reverse repurchase agreement for a period which exceeds the duration of the
reverse repurchase agreement. The Fund will establish and maintain with the
Custodian a separate account with a segregated portfolio of securities in an
amount at least equal to its purchase obligations under its reverse repurchase
agreements. If interest rates rise during the term of a reverse repurchase
agreement, entering into the reverse repurchase agreement may have a negative
impact on the Fund's ability to maintain a net asset value of $1.00 per share.
See "Investment Restrictions" for the Fund's limitations on reverse repurchase
agreements and bank borrowings.

Loans of Portfolio Securities. Subject to applicable investment
restrictions, the Fund is permitted to lend its securities in an amount up to 33
1/3% of the value of the Fund's net assets. The Fund may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by a
letter of credit in favor of the Fund at least equal at all times to 100% of the
market value of the securities loaned, plus accrued interest. While such
securities are on loan, the borrower will pay the Fund any income accruing
thereon. Loans will be subject to termination by the Fund in the normal
settlement time, generally three business days after notice, or by the borrower
on one day's notice. Borrowed securities must be returned when the loan is
terminated. Any gain or loss in the market price of the borrowed securities
which occurs during the term of the loan inures to the Fund and its respective
investors. The Fund may pay reasonable finders' and custodial fees in connection
with a loan. In addition, the Fund will consider all facts and circumstances
including the creditworthiness of the borrowing financial institution, and the
Fund will not make any loans in excess of one year. Loans of portfolio
securities may be considered extensions of credit by the Fund. The risks to the
Fund with respect to borrowers of its portfolio securities are similar to the
risks to the Fund with respect to sellers in repurchase agreement transactions.
See "Repurchase Agreements". The Fund will not lend its securities to any
officer, Trustee, Director, employee or other affiliate of the Fund, the Advisor
or the Distributor, unless otherwise permitted by applicable law.

Illiquid Investments, Privately Placed and Certain Unregistered Securities.
The Fund may invest in privately placed, restricted, Rule 144A or other
unregistered securities. The Fund may not acquire any illiquid holdings if, as a
result thereof, more than 10% of the Fund's net assets would be in illiquid
investments. Subject to this non-fundamental policy limitation, the Portfolio
may acquire investments that are illiquid or have limited liquidity, such as
private placements or investments that are not registered under the Securities
Act of 1933, as amended (the "1933 Act") and cannot be offered for public sale
in the United States without first being registered under the 1933 Act. An
illiquid investment is any investment that cannot be disposed of within seven
days in the normal course of business at approximately the amount at which it is
valued by the Portfolio. The price the Portfolio pays for illiquid securities or
receives upon resale may be lower than the price paid or received for similar
securities with a more liquid market. Accordingly the valuation of these
securities will reflect any limitations on their liquidity.

The Fund may also purchase Rule 144A securities sold to institutional
investors without registration under the 1933 Act. These securities may be

<PAGE>

determined to be liquid in accordance with guidelines established by the
Advisor and approved by the Trustees. The Trustees will monitor the Advisor's
implementation of these guidelines on a periodic basis.

As to illiquid investments, the Fund is subject to a risk that should the
Fund decide to sell them when a ready buyer is not available at a price the Fund
deems representative of their value, the value of the Fund's net assets could be
adversely affected. Where an illiquid security must be registered under the 1933
Act, before it may be sold, the Fund may be obligated to pay all or part of the
registration expenses, and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.

Synthetic Instruments. The Fund may invest in certain synthetic variable
rate instruments. Such instruments generally involve the deposit of a long-term
tax exempt bond in a custody or trust arrangement and the creation of a
mechanism to adjust the long-term interest rate on the bond to a variable
short-term rate and a right (subject to certain conditions) on the part of the
purchaser to tender it periodically to a third part at par. Morgan will review
the structure of synthetic variable rate instruments to identify credit and
liquidity risks (including the conditions under which the right to tender the
instrument would no longer be available) and will monitor those risks. In the
event that the right to tender the instrument is no longer available, the risk
to the Portfolio will be that of holding the long-term bond, which may require
the disposition of the bond which could be at a loss. In the case of some types
of instruments credit enhancement is not provided, and if certain events, which
may include (a) default in the payment of principal or interest on the
underlying bond, (b) downgrading of the bond below investment grade or (c) a
loss of the bond's tax exempt status, occur, then (i) the put will terminate,
(ii) the risk to the Fund will be that of holding a long-term bond, and (iii)
the disposition of the bond may be required which could be at a loss.

Quality and Diversification Requirements

The Fund intends to meet the diversification requirements of the 1940 Act.
Current 1940 Act diversification requirements require that with respect to 75%
of the assets of the Fund: (1) the Fund may not invest more than 5% of its total
assets in the securities of any one issuer, except obligations of the U.S.
Government, its agencies and instrumentalities, and (2) the Fund may not own
more than 10% of the outstanding voting securities of any one issuer. As for the
other 25% of the Fund's assets not subject to the limitation described above,
there is no limitation on investment of these assets under the 1940 Act, so that
all of such assets may be invested in securities of any one issuer. Investments
not subject to the limitations described above could involve an increased risk
to the Fund should an issuer, or a state or its related entities, be unable to
make interest or principal payments or should the market value of such
securities decline.

At the time the Fund invests in any taxable commercial paper, master demand
obligation, bank obligation or repurchase agreement, the issuer must have
outstanding debt rated A or higher by Moody's or Standard & Poor's, the issuer's
parent corporation, if any, must have outstanding commercial paper rated Prime-1
by Moody's or A-1 by Standard & Poor's, or if no such ratings are available, the
investment must be of comparable quality in Morgan's opinion.

<PAGE>

For purposes of diversification and concentration under the 1940 Act,
identification of the issuer of municipal bonds or notes depends on the terms
and conditions of the obligation. If the assets and revenues of an agency,
authority, instrumentality or other political subdivision are separate from
those of the government creating the subdivision and the obligation is backed
only by the assets and revenues of the subdivision, such subdivision is regarded
as the sole issuer. Similarly, in the case of an industrial development revenue
bond or pollution control revenue bond, if the bond is backed only by the assets
and revenues of the nongovernmental user, the nongovernmental user is regarded
as the sole issuer. If in either case the creating government or another entity
guarantees an obligation, the guaranty is regarded as a separate security and
treated as an issue of such guarantor. Since securities issued or guaranteed by
states or municipalities are not voting securities, there is no limitation on
the percentage of a single issuer's securities which the Fund may own so long as
it does not invest more than 5% of its total assets that are subject to the
diversification limitation in the securities of such issuer, except obligations
issued or guaranteed by the U.S. Government. Consequently, the Fund may invest
in a greater percentage of the outstanding securities of a single issuer than
would an investment company which invests in voting securities. See "Investment
Restrictions."

In order to attain its objective of maintaining a stable net asset value,
the Fund will limit its investments to securities that present minimal credit
risks and securities (other than New York State municipal notes) that are rated
within the highest rating assigned to short-term debt securities (or, in the
case of New York State municipal notes, within one of the two highest ratings
assigned to short-term debt securities) by at least two NRSROs or by the only
NRSRO that has rated the security. Securities which originally had a maturity of
over one year are subject to more complicated, but generally similar rating
requirements. The Fund may also purchase unrated securities that are of
comparable quality to the rated securities described above. Additionally, if the
issuer of a particular security has issued other securities of comparable
priority and security and which have been rated in accordance with the criteria
described above that security will be deemed to have the same rating as such
other rated securities.

In addition, the Board of Trustees has adopted procedures which (i) require
the Fund to maintain a dollar-weighted average portfolio maturity of not more
than 90 days and to invest only in securities with a remaining maturity of not
more than thirteen months and (ii) require the Fund, in the event of certain
downgrading of or defaults on portfolio holdings, to dispose of the holding,
subject in certain circumstances to a finding by the Trustees that disposing of
the holding would not be in the Fund's best interest.

The credit quality of variable rate demand notes and other municipal
obligations is frequently enhanced by various credit support arrangements with
domestic or foreign financial institutions, such as letters of credit,
guarantees and insurance, and these arrangements are considered when investment
quality is evaluated. The rating of credit-enhanced municipal obligations by a
NRSRO may be based primarily or exclusively on the credit support arrangement.

INVESTMENT RESTRICTIONS

The investment restrictions of the Fund and Portfolio are identical, unless
otherwise specified. Accordingly, references below to the Fund also include the
Portfolio unless the context requires otherwise; similarly, references to the
Portfolio also include the Fund unless the context requires otherwise.

<PAGE>

The investment restrictions below have been adopted by the Trust, with
respect to the Fund, and by the Portfolio. Except where otherwise noted, these
investment restrictions are "fundamental" policies which, under the 1940 Act,
may not be changed without the vote of a majority of the outstanding voting
securities of the Fund or Portfolio, as the case may be. A "majority of the
outstanding voting securities" is defined in the 1940 Act as the lesser of (a)
67% or more of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (b) more than 50% of the outstanding voting securities. The percentage
limitations contained in the restrictions below apply at the time of the
purchase of securities. Whenever the Fund is requested to vote on a change in
the fundamental investment restrictions of the Portfolio, the Trust will hold a
meeting of Fund shareholders and will cast its votes as instructed by the Fund's
shareholders.

The Fund and its corresponding Portfolio:

1. May not make any investment inconsistent with the Fund's classification
as a diversified investment company under the Investment Company Act of 1940.

2. May not purchase any security which would cause the Fund to concentrate
its investments in the securities of issuers primarily engaged in any particular
industry except as permitted by the SEC;

3. May not issue senior securities, except as permitted under the
Investment Company Act of 1940 or any rule, order or interpretation thereunder;

4. May not borrow money, except to the extent permitted by applicable law;

5. May not underwrite securities of other issuers, except to the extent
that the Fund, in disposing of portfolio securities, may be deemed an
underwriter within the meaning of the 1933 Act;

6. May not purchase or sell real estate, except that, to the extent
permitted by applicable law, the Fund may (a) invest in securities or other
instruments directly or indirectly secured by real estate, and (b) invest in
securities or other instruments issued by issuers that invest in real estate;

7. May not purchase or sell commodities or commodity contracts unless
acquired as a result of ownership of securities or other instruments issued by
persons that purchase or sell commodities or commodities contracts; but this
shall not prevent the Fund from purchasing, selling and entering into financial
futures contracts (including futures contracts on indices of securities,
interest rates and currencies), options on financial futures contracts
(including futures contracts on indices of securities, interest rates and
currencies), warrants, swaps, forward contracts, foreign currency spot and
forward contracts or other derivative instruments that are not related to
physical commodities; and

8. May make loans to other persons, in accordance with the Fund's
investment objective and policies and to the extent permitted by applicable law.

Non-Fundamental Investment Restrictions. The investment restrictions
described below are not fundamental policies of the Fund and its corresponding
Portfolio and may be changed by their Trustees. These non-fundamental investment
policies require that the Fund and its corresponding Portfolio:

(i) May not acquire any illiquid securities, such as repurchase agreements
with more than seven days to maturity or fixed time deposits with a duration

<PAGE>

of over seven calendar days, if as a result thereof, more than 10% of the
market value of the Fund's total assets would be in investments which are
illiquid;

(ii) May not purchase securities on margin, make short sales of securities,
or maintain a short position, provided that this restriction shall not be deemed
to be applicable to the purchase or sale of when-issued or delayed delivery
securities

(iii) May not acquire securities of other investment companies, except as
permitted by the 1940 Act or any order pursuant thereto.

(iv) May not borrow money, except from banks for temporary, extraordinary
or emergency purposes and then only in amounts up to 10% of the value of the
Fund's total assets, taken at cost at the time of such borrowing; or mortgage,
pledge or hypothecate any assets except in connection with any such borrowing in
amounts up to 10% of the value of the Fund's net assets at the time of such
borrowing. The Fund will not purchase securities while borrowings exceed 5% of
the Fund's total assets, provided, however, that the Fund may increase its
interest in an open-end management investment company with the same investment
objective and restrictions as the Fund's while such borrowings are outstanding.
This borrowing provision, for example, facilitates the orderly sale of portfolio
securities in the event of abnormally heavy redemption requests or in the event
of redemption requests during periods of tight market supply. This provision is
not for leveraging purposes.

(v) May not purchase industrial revenue bonds if, as a result of such
purchase, more than 5% of total Fund assets would be invested in industrial
revenue bonds where payment of principal and interest are the responsibility of
companies with fewer than three years of operating history.

Notwithstanding any other fundamental or non-fundamental investment
restriction or policy, the Fund reserves the right, without the approval of
shareholders, to invest all of its assets in the securities of a single open-end
registered investment company with substantially the same investment objective,
restrictions and policies as the Fund.

There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in market value of an investment, in net or total
assets, in the securities rating of the investment, or any other later change.

For purposes of fundamental investment restrictions regarding industry
concentration, the Advisor may classify issuers by industry in accordance with
classifications set forth in the Directory of Companies Filing Annual Reports
With The Securities and Exchange Commission or other sources. In the absence of
such classification or if the Advisor determines in good faith based on its own
information that the economic characteristics affecting a particular issuer make
it more appropriately considered to be engaged in a different industry, the
Advisor may classify an issuer accordingly. For instance, personal credit
finance companies and business credit finance companies are deemed to be
separate industries and wholly owned finance companies are considered to be in
the industry of their parents if their activities are primarily related to
financing the activities of their parents.

TRUSTEES AND OFFICERS

<PAGE>

Trustees

The Trustees of the Trust, who are also the Trustees of the Portfolio,
their business addresses, principal occupations during the past five years and
dates of birth are set forth below.

FREDERICK S. ADDY--Trustee; Retired; Prior to April 1994, Executive Vice
President and Chief Financial Officer, Amoco Corporation. His address is 5300
Arbutus Cove, Austin, Texas 78746, and his date of birth is January 1, 1932.

WILLIAM G. BURNS--Trustee; Retired, Former Vice Chairman and Chief
Financial Officer, NYNEX. His address is 2200 Alaqua Drive, Longwood, Florida
32779, and his date of birth is November 2, 1932.

ARTHUR C. ESCHENLAUER--Trustee; Retired; Former Senior Vice President,
Morgan Guaranty Trust Company of New York. His address is 14 Alta Vista Drive,
RD #2, Princeton, New Jersey 08540, and his date of birth is May 23, 1934.

MATTHEW HEALEY1--Trustee, Chairman and Chief Executive Officer; Chairman,
Pierpont Group, Inc., since prior to 1992. His address is Pine Tree Club
Estates, 10286 Saint Andrews Road, Boynton Beach, Florida 33436, and his date of
birth is August 23, 1937.

MICHAEL P. MALLARDI--Trustee; Retired; Prior to April 1996, Senior Vice
President, Capital Cities/ABC, Inc. and President, Broadcast Group. His address
is 10 Charnwood Drive, Suffern, New York 10910, and his date of birth is
March 17, 1934.

The Trustees of the Trust are the same as the Trustees of the Portfolio. In
accordance with applicable state requirements, a majority of the disinterested
Trustees have adopted written procedures reasonably appropriate to deal with
potential conflicts of interest arising from the fact that the same individuals
are Trustees of the Trust, the Portfolio and the J.P. Morgan Institutional Funds
up to and including creating a separate board of trustees.

Each Trustee is currently paid an annual fee of $75,000 (adjusted as of
April 1, 1997) for serving as Trustee of the Trust, each of the Master
Portfolios (as defined below), the J.P. Morgan Institutional Funds and J.P.
Morgan Series Trust and is reimbursed for expenses incurred in connection with
service as a Trustee. The Trustees may hold various other directorships
unrelated to these funds.

Trustee compensation expenses paid by the Trust for the calendar year ended
December 31, 1997 are set forth below.

<PAGE>

- --------------------------------- -------------------- -------------------------

TOTAL TRUSTEE COMPENSATION
ACCRUED BY THE MASTER
AGGREGATE TRUSTEE PORTFOLIOS(*), J.P. MORGAN
COMPENSATION INSTITUTIONAL FUNDS, J.P.
PAID BY THE TRUST MORGAN SERIESTRUST AND THE
NAME OF TRUSTEE DURING 1997 TRUST DURING 1997(***)
- --------------------------------- ------------------- ------------------
- --------------------------------- ------------------- ------------------

Frederick S. Addy, Trustee $12,641.75 $72,500
- --------------------------------- ------------------- ------------------
- --------------------------------- ------------------- ------------------

William G. Burns, Trustee $12,644.75 $72,500
- --------------------------------- ------------------- ------------------
- --------------------------------- ------------------- ------------------

Arthur C. Eschenlauer, Trustee $12,644.75 $72,500
- --------------------------------- ------------------- ------------------
- --------------------------------- ------------------- ------------------

Matthew Healey, Trustee (**) $12,644.75 $72,500
Chairman and Chief Executive
Officer
- --------------------------------- ------------------- ------------------
- --------------------------------- ------------------- ------------------

Michael P. Mallardi, Trustee $12,644.75 $72,500
- --------------------------------- ------------------- ------------------

(*) Includes the Portfolio and 19 other portfolios (collectively, the
"Master Portfolios") for which JPMIM acts as investment adviser.

(**) During 1997, Pierpont Group, Inc. paid Mr. Healey, in his role as
Chairman of Pierpont Group, Inc., compensation in the amount of $147,500,
contributed $22,100 to a defined contribution plan on his behalf and paid
$20,500 in insurance premiums for his benefit.

(***) No investment company within the fund complex has a pension or
retirement plan. Currently there are 18 investment companies (15 investment
companies comprising the Master Portfolios, the J.P. Morgan Institutional Funds,
the Trust and J.P. Morgan Series Trust) in the fund complex.

The Trustees decide upon general policies and are responsible for
overseeing the Trust's and Portfolio's business affairs. The Portfolio and the
Trust have entered into a Fund Services Agreement with Pierpont Group, Inc. to
assist the Trustees in exercising their overall supervisory responsibilities
over the affairs of the Portfolio and the Trust. Pierpont Group, Inc. was
organized in July 1989 to provide services for The Pierpont Family of Funds (now
the J.P. Morgan Family of Fund), and the Trustees are the equal and sole
shareholders of Pierpont Group, Inc. The Trust and the Portfolio have agreed to
pay Pierpont Group, Inc. a fee in an amount representing its reasonable costs in
performing these services to the Trust, the Portfolio and certain other
registered investment companies subject to similar agreements with Pierpont
Group, Inc. These costs are periodically reviewed by the Trustees. The principal
offices of Pierpont Group, Inc. are located at 461 Fifth Avenue, New York, New
York 10017.

The aggregate fees paid to Pierpont Group, Inc. by the Fund and the
Portfolio during the indicated fiscal years are set forth below:

Fund -- For the fiscal years ended August 31, 1996, 1997 and 1998: $53,896,
$37,100 and $38,366.

Portfolio -- For the fiscal years ended August 31, 1996, 1997 and 1998:
$62,310, $43,285 and $53,097. Officers

<PAGE>

The Trust's and Portfolio's executive officers (listed below), other than
the Chief Executive Officer, are provided and compensated by Funds Distributor,
Inc. ("FDI"), a wholly owned indirect subsidiary of Boston Institutional Group,
Inc. The officers conduct and supervise the business operations of the Trust and
the Portfolio. The Trust and the Portfolio have no employees.

The officers of the Trust and the Portfolio, their principal occupations
during the past five years and dates of birth are set forth below. Unless
otherwise specified, each officer holds the same position with the Trust and the
Portfolio. The business address of each of the officers unless otherwise noted
is Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109.

MATTHEW HEALEY; Chief Executive Officer; Chairman, Pierpont Group, since
prior to 1993. His address is Pine Tree Club Estates, 10286 Saint Andrews Road,
Boynton Beach, Florida 33436. His date of birth is August 23, 1937.

MARGARET W. CHAMBERS; Vice President and Secretary. Senior Vice President
and General Counsel of FDI since April, 1998. From August 1996 to March 1998,
Ms. Chambers was Vice President and Assistant General Counsel for Loomis, Sayles
& Company, L.P. From January 1986 to July 1996, she was an associate with the
law firm of Ropes & Gray. Her date of birth is October 12, 1959.

MARIE E. CONNOLLY; Vice President and Assistant Treasurer. President, Chief
Executive Officer, Chief Compliance Officer and Director of FDI, Premier Mutual
Fund Services, Inc., an affiliate of FDI ("Premier Mutual") and an officer of
certain investment companies distributed or administered by FDI. Prior to July
1994, she was President and Chief Compliance Officer of FDI. Her date of birth
is August 1, 1957.

DOUGLAS C. CONROY; Vice President and Assistant Treasurer. Assistant Vice
President and Assistant Department Manager of Treasury Services and
Administration of FDI and an officer of certain investment companies distributed
or administered by FDI. Prior to April 1997, Mr. Conroy was Supervisor of
Treasury Services and Administration of FDI. From April 1993 to January 1995,
Mr. Conroy was a Senior Fund Accountant for Investors Bank & Trust Company. His
date of birth is March 31, 1969.

KAREN JACOPPO-WOOD; Vice President and Assistant Secretary. Vice President
and Senior Counsel of FDI and an officer of certain investment companies
distributed or administered by FDI. From June 1994 to January 1996, Ms.
Jacoppo-Wood was a Manager of SEC Registration at Scudder, Stevens & Clark, Inc.
Prior to May 1994, Ms. Jacoppo-Wood was a senior paralegal at The Boston Company
Advisors, Inc. ("TBCA"). Her date of birth is December 29, 1966.

CHRISTOPHER J. KELLEY; Vice President and Assistant Secretary. Vice
President and Senior Associate General Counsel of FDI and Premier Mutual and an
officer of certain investment companies distributed or administered by FDI. From
April 1994 to July 1996, Mr. Kelley was Assistant Counsel at Forum Financial
Group. Prior to April 1994, Mr. Kelley was employed by Putnam Investments in
legal and compliance capacities. His date of birth is December 24, 1964.

KATHLEEN K. MORRISEY. Vice President and Assistant Secretary. Vice
President and Assistant Secretary of FDI. Manager of Treasury Services

<PAGE>

Administration and an officer of certain investment companies advised or
administered by Montgomery Asset Management, L.P. and Dresdner RCM Global
Investors, Inc., and their respective affiliates. From July 1994 to November
1995, Ms. Morrisey was a Fund Accountant II for Investors Bank & Trust Company.
Prior to July 1994 she was a Finance student at Stonehill College in North
Easton, Massachusetts. Her date of birth is July 5, 1972.

MARY A. NELSON; Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of FDI and Premier Mutual and an
officer of certain investment companies distributed or administered by FDI.
Prior to August 1994, Ms. Nelson was an Assistant Vice President and Client
Manager for The Boston Company, Inc. Her date of birth is April 22, 1964.

MARY JO PACE; Assistant Treasurer. Vice President, Morgan Guaranty Trust
Company of New York. Ms. Pace serves in the Funds Administration group as a
Manager for the Budgeting and Expense Processing Group. Prior to September 1995,
Ms. Pace served as a Fund Administrator for Morgan Guaranty Trust Company of New
York. Her address is 60 Wall Street, New York, New York 10260. Her date of birth
is March 13, 1966.

MICHAEL S. PETRUCELLI; Vice President and Assistant Secretary. Senior Vice
President and Director of Strategic Client Initiatives for FDI since December
1996. From December 1989 through November 1996, Mr. Petrucelli was employed with
GE Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and as
Director of GE Investment Services. Address: 200 Park Avenue, New York, New
York, 10166. His date of birth is May 18, 1961.

STEPHANIE D. PIERCE; Vice President and Assistant Secretary. Vice President
and Client Development Manager for FDI since April 1998. From April 1997 to
March 1998, Ms. Pierce was employed by Citibank, NA as an officer of Citibank
and Relationship Manager on the Business and Professional Banking team handling
over 22,000 clients. Address: 200 Park Avenue, New York, New York 10166. Her
date of birth is August 18, 1968.

GEORGE A. RIO; President and Treasurer. Executive Vice President and Client
Service Director of FDI since April 1998. From June 1995 to March 1998, Mr. Rio
was Senior Vice President and Senior Key Account Manager for Putnam Mutual
Funds. From May 1994 to June 1995, Mr. Rio was Director of Business Development
for First Data Corporation. From September 1983 to May 1994, Mr. Rio was Senior
Vice President & Manager of Client Services and Director of Internal Audit at
The Boston Company. His date of birth is January 2, 1955.

CHRISTINE ROTUNDO; Assistant Treasurer. Vice President, Morgan
Guaranty Trust Company of New York. Ms. Rotundo serves in the Funds
Administration group as a Manager of the Tax Group and is responsible for U.S.
mutual fund tax matters. Prior to September 1995, Ms. Rotundo served as a Senior
Tax Manager in the Investment Company Services Group of Deloitte & Touche LLP.
Her address is 60 Wall Street, New York, New York 10260. Her date of birth is
September 26, 1965.

INVESTMENT ADVISOR

The Fund has not retained the services of an investment adviser because the
Fund seeks to achieve its investment objective by investing all of its
investable assets in a corresponding Portfolio. Subject to the supervision of

<PAGE>

the Portfolio's Trustees, the Advisor makes each Portfolio's day-to-day
investment decisions, arranges for the execution of Portfolio transactions and
generally manages the Portfolio's investments. Effective October 1, 1998 the
Portfolio's investment advisor is JPMIM. Prior to that date, Morgan was the
Portfolio's investment advisor. JPMIM, a wholly owned subsidiary of J.P. Morgan
& Co. Incorporated ("J.P. Morgan"), is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, which manages employee benefit
funds of corporations, labor unions and state and local governments and the
accounts of other institutional investors, including investment companies.
Certain of the assets of employee benefit accounts under its management are
invested in commingled pension trust funds for which Morgan serves as trustee.

J.P. Morgan, through the Advisor and other subsidiaries, acts as investment
advisor to individuals, governments, corporations, employee benefit plans,
mutual funds and other institutional investors with combined assets under
management of approximately $275 billion.

J.P. Morgan has a long history of service as adviser, underwriter and
lender to an extensive roster of major companies and as a financial advisor to
national governments. The firm, through its predecessor firms, has been in
business for over a century and has been managing investments since 1913.

The basis of the Advisor's investment process is fundamental investment
research as the firm believes that fundamentals should determine an asset's
value over the long term. J.P. Morgan currently employs over 100 full time
research analysts, among the largest research staffs in the money management
industry, in its investment management divisions located in New York, London,
Tokyo, Frankfurt, and Singapore to cover companies, industries and countries on
site. In addition, the investment management divisions employ approximately 300
capital market researchers, portfolio managers and traders. The Advisor's fixed
income investment process is based on analysis of real rates, sector
diversification and quantitative and credit analysis.

The investment advisory services the Advisor provides to the Portfolio are
not exclusive under the terms of the Advisory Agreement. The Advisor is free to
and does render similar investment advisory services to others. The Advisor
serves as investment advisor to personal investors and other investment
companies and acts as fiduciary for trusts, estates and employee benefit plans.
Certain of the assets of trusts and estates under management are invested in
common trust funds for which the Advisor serves as trustee. The accounts which
are managed or advised by the Advisor have varying investment objectives and the
Advisor invests assets of such accounts in investments substantially similar to,
or the same as, those which are expected to constitute the principal investments
of the Portfolio. Such accounts are supervised by officers and employees of the
Advisor who may also be acting in similar capacities for the Portfolio. See
"Portfolio Transactions."

Sector weightings are generally similar to a benchmark with the emphasis on
security selection as the method to achieve investment performance superior to
the benchmark. The benchmark for the Portfolio in which the Fund invests is
currently IBC's Tax Exempt Money Fund Average.

Morgan, also a wholly owned subsidiary of J.P. Morgan, is a bank holding
company organized under the laws of the State of Delaware. Morgan, whose
principal offices are at 60 Wall Street, New York, New York 10260, is a New York
trust company which conducts a general banking and trust business. Morgan is
subject to regulation by the New York State Banking Department and is a member
bank of the Federal Reserve System. Through offices in New York City

<PAGE>

and abroad, Morgan offers a wide range of services, primarily to
governmental, institutional, corporate and high net worth individual customers
in the United States and throughout the world.

The Portfolio is managed by officers of the Advisor who, in acting for
their customers, including the Portfolio, do not discuss their investment
decisions with any personnel of J.P. Morgan or any personnel of other divisions
of the Advisor or with any of its affiliated persons, with the exception of
certain other investment management affiliates of J.P. Morgan.

As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by the Advisor under the Investment
Advisory Agreement, the Portfolio has agreed to pay the Advisor a fee, which is
computed daily and may be paid monthly, equal to the annual rate of 0.20% of the
Portfolio's average daily net assets up to $1 billion and 0.10% of the
Portfolio's average daily net assets in excess of $1 billion.

The Portfolio paid the following advisory fees to Morgan, the Portfolio's
advisor prior to October 1, 1998 for the fiscal years ended August 31, 1996,
1997 and 1998: $2,154,248, $2,267,159 and $2,710,567. See the Prospectus and
below for applicable expense limitations.

The Investment Advisory Agreement provides that it will continue in effect
for a period of two years after execution only if specifically approved
thereafter annually in the same manner as the Distribution Agreement. See
"Distributor" below. The Investment Advisory Agreement will terminate
automatically if assigned and is terminable at any time without penalty by a
vote of a majority of the Portfolio's Trustees, or by a vote of the holders of a
majority of the Portfolio's outstanding voting securities, on 60 days' written
notice to the Advisor and by the Advisor on 90 days' written notice to the
Portfolio. See "Additional Information."

The Glass-Steagall Act and other applicable laws generally prohibit banks
such as the Advisor from engaging in the business of underwriting or
distributing securities, and the Board of Governors of the Federal Reserve
System has issued an interpretation to the effect that under these laws a bank
holding company registered under the federal Bank Holding Company Act or certain
subsidiaries thereof may not sponsor, organize, or control a registered open-end
investment company continuously engaged in the issuance of its shares, such as
the Trust. The interpretation does not prohibit a holding company or a
subsidiary thereof from acting as investment advisor and custodian to such an
investment company. The Advisor believes that it may perform the services for
the Portfolio contemplated by the Advisory Agreement without violation of the
Glass-Steagall Act or other applicable banking laws or regulations. State laws
on this issue may differ from the interpretation of relevant federal law, and
banks and financial institutions may be required to register as dealers pursuant
to state securities laws. However, it is possible that future changes in either
federal or state statutes and regulations concerning the permissible activities
of banks or trust companies, as well as further judicial or administrative
decisions and interpretations of present and future statutes and regulations,
might prevent the Advisor from continuing to perform such services for the
Portfolio.

If the Advisor were prohibited from acting as investment advisor to the
Portfolio, it is expected that the Trustees of the Portfolio would recommend to
investors that they approve the Portfolio's entering into a new investment
advisory agreement with another qualified investment advisor selected by the
Trustees.

Under separate agreements, Morgan provides certain financial, fund

<PAGE>

accounting and administrative services to the Trust and the Portfolio and
shareholder services for the Trust. See "Services Agent" and "Shareholder
Servicing" below.

DISTRIBUTOR

FDI serves as the Trust's exclusive Distributor and holds itself available
to receive purchase orders for the Fund's shares. In that capacity, FDI has been
granted the right, as agent of the Trust, to solicit and accept orders for the
purchase of the Fund's shares in accordance with the terms of the Distribution
Agreement between the Trust and FDI. Under the terms of the Distribution
Agreement between FDI and the Trust, FDI receives no compensation in its
capacity as the Trust's distributor. FDI is a wholly owned indirect subsidiary
of Boston Institutional Group, Inc. FDI also serves as exclusive placement agent
for the Portfolio. FDI currently provides administration and distribution
services for a number of other investment companies.

The Distribution Agreement shall continue in effect with respect to the
Fund for a period of two years after execution only if it is approved at least
annually thereafter (i) by a vote of the holders of a majority of the Fund's
outstanding shares or by its Trustees and (ii) by a vote of a majority of the
Trustees of the Trust who are not "interested persons" (as defined by the 1940
Act) of the parties to the Distribution Agreement, cast in person at a meeting
called for the purpose of voting on such approval (see "Trustees and Officers").
The Distribution Agreement will terminate automatically if assigned by either
party thereto and is terminable at any time without penalty by a vote of a
majority of the Trustees of the Trust, a vote of a majority of the Trustees who
are not "interested persons" of the Trust, or by a vote of the holders of a
majority of the Fund's outstanding shares as defined under "Additional
Information," in any case without payment of any penalty on 60 days' written
notice to the other party. The principal offices of FDI are located at 60 State
Street, Suite 1300, Boston, Massachusetts 02109.

CO-ADMINISTRATOR

Under Co-Administration Agreements with the Trust and the Portfolio dated
August 1, 1996, FDI also serves as the Trust's and the Portfolio's
Co-Administrator. The Co-Administration Agreements may be renewed or amended by
the respective Trustees without a shareholder vote. The Co-Administration
Agreements are terminable at any time without penalty by a vote of a majority of
the Trustees of the Trust or the Portfolio, as applicable, on not more than 60
days' written notice nor less than 30 days' written notice to the other party.
The Co-Administrator may subcontract for the performance of its obligations,
provided, however, that unless the Trust or the Portfolio, as applicable,
expressly agrees in writing, the Co-Administrator shall be fully responsible for
the acts and omissions of any subcontractor as it would for its own acts or
omissions. See "Services Agent" below.

FDI (i) provides office space, equipment and clerical personnel for
maintaining the organization and books and records of the Trust and the
Portfolio; (ii) provides officers for the Trust and the Portfolio; (iii)
prepares and files documents required for notification of state securities
administrators; (iv) reviews and files marketing and sales literature; (v) files
Portfolio regulatory documents and mails Portfolio communications to Trustees
and investors; and (vi) maintains related books and records.

For its services under the Co-Administration Agreements, the Fund and
Portfolio have agreed to pay FDI fees equal to its allocable share of an annual
complex-wide charge of $425,000 plus FDI's out-of-pocket expenses. The

<PAGE>

amount allocable to the Fund or Portfolio is based on the ratio of its net
assets to the aggregate net assets of the Trust, the Master Portfolios and
certain other investment companies subject to similar agreements with FDI.

The Fund paid FDI the following administrative fees for the period August
1, 1996 through August 31, 1996 and the fiscal years ended August 31, 1997 and
1998: $3,298, $35,390 and $28,462.

The Portfolio paid FDI the following administrative fees for the period
August 1, 1996 through August 31, 1996 and the fiscal years ended August 31,
1997 and 1998: $2,284, $25,082 and $24,913.

For the period September 1, 1995 through July 31, 1996, the Fund paid
Signature Broker-Dealer Services, Inc. (which provided distribution and
administrative services to the Trust and placement agent and administrative
services to the Portfolio prior to August 1, 1996), $157,587 in administrative
fees. See the Prospectus and below for applicable expense limitations.

For the period September 1, 1995 through July 31, 1996, the Portfolio paid
Signature Broker-Dealer Services, Inc. (which provided distribution and
administrative services to the Trust and placement agent and administrative
services to the Portfolio prior to August 1, 1996), $110,848 in administrative
fees. See the Prospectus and below for applicable expense limitations.

SERVICES AGENT

The Trust, on behalf of the Fund, and the Portfolio have entered into
Administrative Services Agreements (the "Services Agreements") with Morgan
effective December 29, 1995, as amended effective August 1, 1996, pursuant to
which Morgan is responsible for certain administrative and related services
provided to the Fund and Portfolio. The Services Agreements may be terminated at
any time, without penalty, by the Trustees or Morgan, in each case on not more
than 60 days' nor less than 30 days' written notice to the other party.

Under the Services Agreements, the Fund and the Portfolio have agreed to
pay Morgan fees equal to its allocable share of an annual complex-wide charge.
This charge is calculated daily based on the aggregate net assets of the Master
Portfolios and J.P. Morgan Series Trust in accordance with the following annual
schedule: 0.09% of the first $7 billion of their aggregate average daily net
assets and 0.04% of their aggregate average daily net assets in excess of $7
billion, less the complex-wide fees payable to FDI. The portion of this charge
payable by the Fund and Portfolio is determined by the proportionate share that
its net assets bear to the total net assets of the Trust, the Master Portfolios,
the other investors in the Master Portfolios for which Morgan provides similar
services and J.P. Morgan Series Trust.

Under administrative services agreements in effect from December 29, 1995
through July 31, 1996 with Morgan, the Portfolio paid Morgan a fee equal to its
proportionate share of an annual complex-wide charge. This charge was calculated
daily based on the aggregate net assets of the Master Portfolios in accordance
with the following schedule: 0.06% of the first $7 billion of the Master
Portfolios' aggregate average daily net assets, and 0.03% of the Master
Portfolios' aggregate average daily net assets in excess of $7 billion. Prior to
December 29, 1995, the Trust and the Portfolio had entered into Financial and
Fund Accounting Services Agreements with Morgan, the provisions of which
included certain of the activities described above and, prior to September 1,

<PAGE>

1995, also included reimbursement of usual and customary expenses.

The Fund paid Morgan, as Services Agent, the following fees, net of fee
waivers and reimbursements, for the fiscal years ended August 31, 1996, 1997 and
1998: $173,920, $336,003 and $354,364. See the Prospectus and below for
applicable expense limitations.

The Portfolio paid Morgan, as Services Agent, the following fees, net of
fee waivers and reimbursements, for the fiscal years ended August 31, 1996, 1997
and 1998: $205,419, $397,340 and $502,654.

CUSTODIAN AND TRANSFER AGENT

State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, serves as the Trust's and the Portfolio's custodian
and fund accounting agent and the Fund's transfer and dividend disbursing agent.
Pursuant to the Custodian Contracts, State Street is responsible for maintaining
the books of account and records of portfolio transactions and holding portfolio
securities and cash. In addition, the Custodian has entered into subcustodian
agreements on behalf of the Portfolio with Bankers Trust Company for the purpose
of holding TENR Notes and with Bank of New York and Chemical Bank, N.A. for the
purpose of holding certain variable rate demand notes. The custodian maintains
portfolio transaction records. As transfer agent and dividend disbursing agent,
State Street is responsible for maintaining account records detailing the
ownership of Fund shares and for crediting income, capital gains and other
changes in share ownership to shareholder accounts.

SHAREHOLDER SERVICING

The Trust on behalf of the Fund has entered into a Shareholder Servicing
Agreement with Morgan pursuant to which Morgan acts as shareholder servicing
agent for its customers and for other Fund investors who are customers of a
Financial Professional. Under this agreement, Morgan is responsible for
performing shareholder account, administrative and servicing functions, which
include but are not limited to, answering inquiries regarding account status and
history, the manner in which purchases and redemptions of Fund shares may be
effected, and certain other matters pertaining to the Fund; assisting customers
in designating and changing dividend options, account designations and
addresses; providing necessary personnel and facilities to coordinate the
establishment and maintenance of shareholder accounts and records with the
Fund's transfer agent; transmitting purchase and redemption orders to the Fund's
transfer agent and arranging for the wiring or other transfer of funds to and
from customer accounts in connection with orders to purchase or redeem Fund
shares; verifying purchase and redemption orders, transfers among and changes in
accounts; informing the Distributor of the gross amount of purchase orders for
Fund shares; monitoring the activities of the Fund's transfer agent; and
providing other related services.

Effective August 1, 1998 under the Shareholder Servicing Agreement, the
Fund has agreed to pay Morgan for these services a fee at the annual rate of
0.25% (expressed as a percentage of the average daily net asset value of Fund
shares owned by or for shareholders for whom Morgan is acting as shareholder
servicing agent). Morgan acts as shareholder servicing agent for all
shareholders. See the Prospectus and below for applicable expense limitations.

The shareholder servicing fees paid by the Fund to Morgan, net of fee

<PAGE>

waivers and reimbursements, for the fiscal years ended August 31, 1996,
1997 and 1998 were as follows: $1,680,618, $1,607,959 and $1,907,080. See
"Expenses" in the Prospectus and below for applicable expense limitations.

As discussed under "Investment Advisor," the Glass-Steagall Act and other
applicable laws and regulations limit the activities of bank holding companies
and certain of their subsidiaries in connection with registered open-end
investment companies. The activities of Morgan in acting as shareholder
servicing agent for Fund shareholders under the Shareholder Servicing Agreement
and providing administrative services to the Fund and the Portfolio under the
Services Agreements, the activities of JPMIM and in acting as Advisor to the
Portfolio under the Investment Advisory Agreement may raise issues under these
laws. However, JPMIM and Morgan believe that they may properly perform these
services and the other activities described in the Prospectus without violation
of the Glass-Steagall Act or other applicable banking laws or regulations.

If Morgan were prohibited from providing any of the services under the
Shareholder Servicing Agreement and the Services Agreements, the Trustees would
seek an alternative provider of such services. In such event, changes in the
operation of the Fund or the Portfolio might occur and a shareholder might no
longer be able to avail himself or herself of any services then being provided
to shareholders by Morgan.

The Fund may be sold to or through financial intermediaries who are
customers of J.P. Morgan ("financial professionals"), including financial
institutions and broker-dealers, that may be paid fees by J.P. Morgan or its
affiliates for services provided to their clients that invest in the Fund. See
"Financial Professionals" below. Organizations that provide record keeping or
other services to certain employee benefit or retirement plans that include the
Fund as an investment alternative may also be paid a fee.

FINANCIAL PROFESSIONALS

The services provided by financial professionals may include establishing
and maintaining shareholder accounts, processing purchase and redemption
transactions, arranging for bank wires, performing shareholder subaccounting,
answering client inquiries regarding the Trust, assisting clients in changing
dividend options, account designations and addresses, providing periodic
statements showing the client's account balance and integrating these statements
with those of other transactions and balances in the client's other accounts
serviced by the financial professional, transmitting proxy statements, periodic
reports, updated prospectuses and other communications to shareholders and, with
respect to meetings of shareholders, collecting, tabulating and forwarding
executed proxies and obtaining such other information and performing such other
services as Morgan or the financial professional's clients may reasonably
request and agree upon with the financial professional.

Although there is no sales charge levied directly by the Fund, financial
professionals may establish their own terms and conditions for providing their
services and may charge investors a transaction-based or other fee for their
services. Such charges may vary among financial professionals but in all cases
will be retained by the financial professional and not remitted to the Fund or
Morgan.

INDEPENDENT ACCOUNTANTS

The independent accountants of the Trust and the Portfolio are
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036. PricewaterhouseCoopers LLP conducts an annual audit of the financial

<PAGE>

statements of the Fund and the Portfolio, assists in the preparation and/or
review of the Fund's and the Portfolio's federal and state income tax returns
and consults with the Fund and the Portfolio as to matters of accounting and
federal and state income taxation.

EXPENSES

In addition to the fees payable to Pierpont Group, Inc., JPMIM, Morgan and
FDI under various agreements discussed under "Trustees and Officers,"
"Investment Advisor," "Co-Administrator", "Distributor," "Services Agent" and
"Shareholder Servicing" above, the Fund and the Portfolio are responsible for
usual and customary expenses associated with their respective operations. Such
expenses include organization expenses, legal fees, accounting and audit
expenses, insurance costs, the compensation and expenses of the Trustees, costs
associated with their registration fees under federal securities laws, and
extraordinary expenses applicable to the Fund or the Portfolio. For the Fund,
such expenses also include transfer, registrar and dividend disbursing costs,
the expenses of printing and mailing reports, notices and proxy statements to
Fund shareholders, and filing fees under state securities laws. For the
Portfolio, such expenses also include custodian fees and brokerage expenses. For
additional information regarding waivers or expense subsidies, see the
Prospectus.

PURCHASE OF SHARES

Method of Purchase. Investors may open accounts with the Fund only through
the Distributor. All purchase transactions in Fund accounts are processed by
Morgan as shareholder servicing agent and the Fund is authorized to accept any
instructions relating to a Fund account from Morgan as shareholder servicing
agent for the customer. All purchase orders must be accepted by the Distributor.
Prospective investors who are not already customers of Morgan may apply to
become customers of Morgan for the sole purpose of Fund transactions. There are
no charges associated with becoming a Morgan customer for this purpose. Morgan
reserves the right to determine the customers that it will accept, and the Trust
reserves the right to determine the purchase orders that it will accept.

References in the Prospectus and this Statement of Additional Information
to customers of Morgan or a financial professional include customers of their
affiliates and references to transactions by customers with Morgan or a
financial professional include transactions with their affiliates. Only Fund
investors who are using the services of a financial institution acting as
shareholder servicing agent pursuant to an agreement with the Trust on behalf of
the Fund may make transactions in shares of the Fund.

The Fund may, at its own option, accept securities in payment for shares.
The securities delivered in such a transaction are valued by the method
described in "Net Asset Value" as of the day the Fund receives the securities.
This is a taxable transaction to the shareholder. Securities may be accepted in
payment for shares only if they are, in the judgment of the Advisor, appropriate
investments for the Portfolio. In addition, securities accepted in payment for
shares must: (i) meet the investment objective and policies of the Portfolio;
(ii) be acquired by the Fund for investment and not for resale (other than for
resale to the Portfolio); and (iii) be liquid securities which are not
restricted as to transfer either by law or liquidity of market. The Fund
reserves the right to accept or reject at its own option any and all securities
offered in payment for its shares.

Prospective investors may purchase shares with the assistance of a
Financial Professional, and the Financial Professional may charge the investor

<PAGE>

a fee for this service and other services it provides to its customers.

REDEMPTION OF SHARES

Investors may redeem shares as described in the Prospectus. Shareholders
redeeming shares of the Fund should be aware that the Fund attempts to maintain
a stable net asset value of $1.00 per share; however, there can be no assurance
that it will be able to continue to do so, and in that case the net asset value
of the Fund's shares might deviate from $1.00 per share. Accordingly, a
redemption request might result in payment of a dollar amount which differs from
the number of shares redeemed. See "Net Asset Value" below.

If the Trust, on behalf of the Fund, and the Portfolio determine that it
would be detrimental to the best interest of the remaining shareholders of the
Fund to make payment wholly or partly in cash, payment of the redemption price
may be made in whole or in part by a distribution in kind of securities from the
Portfolio, in lieu of cash, in conformity with the applicable rule of the SEC.
If shares are redeemed in kind, the redeeming shareholder might incur
transaction costs in converting the assets into cash. The method of valuing
portfolio securities is described under "Net Asset Value," and such valuation
will be made as of the same time the redemption price is determined. The Trust,
on behalf of the Fund, has elected to be governed by Rule 18f-1 under the 1940
Act pursuant to which the Portfolio is obligated to redeem shares solely in cash
up to the lesser of $250,000 or one percent of the net asset value of the Fund
during any 90-day period for any one shareholder. The Trust will redeem Fund
shares in kind only if it has received a redemption in kind from the Portfolio
and therefore shareholders of the Fund that receive redemptions in kind will
receive securities of the Portfolio. The Portfolio has advised the Trust that
the Portfolio will not redeem in kind except in circumstances in which the Fund
is permitted to redeem in kind.

Further Redemption Information. Investors should be aware that redemptions
from the Fund may not be processed if a redemption request is not submitted in
proper form. To be in proper form, the Fund must have received the shareholder's
taxpayer identification number and address. In addition, if a shareholder sends
a check for the purchase of fund shares and shares are purchased before the
check has cleared, the transmittal of redemption proceeds from the shares will
occur upon clearance of the check which may take up to 15 days. The Trust, on
behalf of the Fund, and the Portfolio reserve the right to suspend the right of
redemption and to postpone the date of payment upon redemption as follows: (i)
for up to seven days, (ii) during periods when the New York Stock Exchange is
closed for other than weekends and holidays or when trading on such Exchange is
restricted as determined by the SEC by rule or regulation, (iii) during periods
in which an emergency, as determined by the SEC, exists that causes disposal by
the Portfolio of, or evaluation of the net asset value of, its portfolio
securities to be unreasonable or impracticable, or (iv) for such other periods
as the SEC may permit.

EXCHANGE OF SHARES

An investor may exchange shares from the Fund into shares of any other J.P.
Morgan or J.P. Morgan mutual fund, without charge. An exchange may be made so
long as after the exchange the investor has shares, in each fund in which he or
she remains an investor, with a value of at least that fund's minimum investment
amount. Shareholders should read the prospectus of the fund into which they are
exchanging and may only exchange between fund accounts that are registered in
the same name, address and taxpayer identification number. Shares are exchanged
on the basis of relative net asset value per

<PAGE>

share. Exchanges are in effect redemptions from one fund and purchases of
another fund and the usual purchase and redemption procedures and requirements
are applicable to exchanges. Shareholders subject to federal income tax who
exchange shares in one fund for shares in another fund may recognize capital
gain or loss for federal income tax purposes. Shares of the Fund to be acquired
are purchased for settlement when the proceeds from redemption become available.
The Trust reserves the right to discontinue, alter or limit the exchange
privilege at any time.

DIVIDENDS AND DISTRIBUTIONS

The Fund declares and pays dividends and distributions as described in the
Prospectus.

If a shareholder has elected to receive dividends and/or capital gain
distributions in cash and the postal or other delivery service is unable to
deliver checks to the shareholder's address of record, such shareholder's
distribution option will automatically be converted to having all dividend and
other distributions reinvested in additional shares. No interest will accrue on
amounts represented by uncashed distribution or redemption checks.

NET ASSET VALUE

The Fund computes its net asset value once daily on Monday through Friday
as described in the Prospectus. The net asset value will not be computed on the
day the following legal holidays are observed: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. In
the event that trading in the money markets is scheduled to end earlier than the
close of the New York Stock Exchange in observance of these holidays, the Fund
and Portfolio would expect to close for purchases and redemptions an hour in
advance of the end of trading in the money markets. The Fund and the Portfolio
may also close for purchases and redemptions at such other times as may be
determined by the Board of Trustees to the extent permitted by applicable law.
On any business day when the Public Securities Association ("PSA") recommends
that the securities market close early, the Fund reserves the right to cease
accepting purchase and redemption orders for same business day credit at the
time PSA recommends that the securities market close. On days the Fund closes
early, purchase and redemption orders received after the PSA-recommended closing
time will be credited the next business day. The days on which net asset value
is determined are the Fund's business days.

The net asset value of the Fund is equal to the value of the Fund's
investment in the Portfolio (which is equal to the Fund's pro rata share of the
total investment of the Fund and of any other investors in the Portfolio less
the Fund's pro rata share of the Portfolio's liabilities) less the Fund's
liabilities. The following is a discussion of the procedures used by the
Portfolio in valuing its assets.

The Portfolio's portfolio securities are valued by the amortized cost
method. The purpose of this method of calculation is to attempt to maintain a
constant net asset value per share of the Fund of $1.00. No assurances can be
given that this goal can be attained. The amortized cost method of valuation
values a security at its cost at the time of purchase and thereafter assumes a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. If a
difference of more than 1/2 of 1% occurs between valuation based on the
amortized cost method and valuation based on market value, the Trustees will
take steps necessary to reduce such deviation, such as changing the Fund's
dividend policy, shortening the average portfolio maturity, realizing gains or
losses, or reducing the number of outstanding Fund shares.

<PAGE>

Any reduction of outstanding shares will be effected by having each
shareholder contribute to the Fund's capital the necessary shares on a pro rata
basis. Each shareholder will be deemed to have agreed to such contribution in
these circumstances by his investment in the Fund. See "Taxes."

PERFORMANCE DATA

From time to time, the Fund may quote performance in terms of yield, actual
distributions, total return or capital appreciation in reports, sales literature
and advertisements published by the Trust. Current performance information for
the Fund may be obtained by calling the number provided on the cover page of
this Statement of Additional Information.

Yield Quotations. As required by regulations of the SEC, current yield for
the Fund is computed by determining the net change exclusive of capital changes
in the value of a hypothetical pre-existing account having a balance of one
share at the beginning of a seven-day calendar period, dividing the net change
in account value of the account at the beginning of the period, and multiplying
the return over the seven-day period by 365/7. For purposes of the calculation,
net change in account value reflects the value of additional shares purchased
with dividends from the original share and dividends declared on both the
original share and any such additional shares, but does not reflect realized
gains or losses or unrealized appreciation or depreciation. Effective yield for
the Fund is computed by annualizing the seven-day return with all dividends
reinvested in additional Fund shares. The tax equivalent yield is computed by
first computing the yield as discussed above. Then the portion of the yield
attributable to securities the income of which was exempt for federal income tax
purposes is determined. This portion of the yield is then divided by one minus
the stated assumed federal income tax rate for individuals and then added to the
portion of the yield that is not attributable to securities, the income of which
was tax exempt.

Historical yield information for the period ended August 31, 1998 is as
follows: 7-day current yield: 2.91%; 7-day tax equivalent yield at 39.6% tax
rate: 4.82%; 7-day effective yield: 2.95%.

Total Return Quotations. Historical performance information for the periods
prior to the establishment of the Fund will be that of its corresponding
free-standing predecessor fund and will be presented in accordance with
applicable SEC Staff interpretations. Historical return information for the Fund
for the period ended August 31, 1998 is as follows: Average annual total return,
1 year: 3.23%; Average annual total return, 5 years: 3.04%; average annual total
return, 10 years: 3.68%; aggregate total return, 1 year: 3.23%; aggregate total
return, 5 years: 16.14%; aggregate total return, 10 years: 43.58%.

Aggregate total returns, reflecting the cumulative percentage change over a
measuring period, may also be calculated.

General. The Fund's performance will vary from time to time depending upon
market conditions, the composition of the Portfolio, and its operating expenses.
Consequently, any given performance quotation should not be considered
representative of the Fund's performance for any specified period in the future.
In addition, because performance will fluctuate, it may not provide a basis for
comparing an investment in the Fund with certain bank deposits or other
investments that pay a fixed yield or return for a stated period of time.

Comparative performance information may be used from time to time in

<PAGE>

advertising the Fund's shares, including appropriate market indices
including the benchmarks indicated under "Investment Advisor" above or data from
Lipper Analytical Services, Inc., Micropal, Inc., Ibbotson Associates,
Morningstar Inc., the Dow Jones Industrial Average and other industry
publications.

From time to time, the Fund may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders: (1) discussions of
general economic or financial principles (such as the effects of compounding and
the benefits of dollar-cost averaging); (2) discussions of general economic
trends; (3) presentations of statistical data to supplement such discussions;
(4) descriptions of past or anticipated portfolio holdings for the Fund; (5)
descriptions of investment strategies for the Fund; (6) descriptions or
comparisons of various savings and investment products (including, but not
limited to, qualified retirement plans and individual stocks and bonds), which
may or may not include the Fund; (7) comparisons of investment products
(including the Fund) with relevant markets or industry indices or other
appropriate benchmarks; (8) discussions of Fund rankings or ratings by
recognized rating organizations; and (9) discussions of various statistical
methods quantifying the Fund's volatility relative to its benchmark or to past
performance, including risk adjusted measures. The Fund may also include
calculations, such as hypothetical compounding examples, which describe
hypothetical investment results in such communications. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of the Funds

PORTFOLIO TRANSACTIONS

The Advisor places orders for the Portfolio for all purchases and sales of
portfolio securities, enters into repurchase agreements, and may enter into
reverse repurchase agreements and execute loans of portfolio securities on
behalf of the Portfolio. See "Investment Objectives and Policies."

Fixed income and debt securities and municipal bonds and notes are
generally traded at a net price with dealers acting as principal for their own
accounts without a stated commission. The price of the security usually includes
profit to the dealers. In underwritten offerings, securities are purchased at a
fixed price which includes an amount of compensation to the underwriter,
generally referred to as the underwriter's concession or discount. On occasion,
certain securities may be purchased directly from an issuer, in which case no
commissions or discounts are paid.

Portfolio transactions for the Portfolio will be undertaken principally to
accomplish the Portfolio's objective in relation to expected movements in the
general level of interest rates. The Portfolio may engage in short-term trading
consistent with its objective. See "Investment Objective and Policies
- --Portfolio Turnover." The Portfolio will not seek profits through short-term
trading, but the Portfolio may dispose of any portfolio security prior to its
maturity if it believes such disposition is appropriate even if this action
realizes profits or losses.

In connection with portfolio transactions for the Portfolio, the Advisor
intends to seek the best price and execution on a competitive basis for both
purchases and sales of securities.

The Portfolio has a policy of investing only in securities with maturities
of not more than thirteen months, which will result in high portfolio turnover.
Since brokerage commissions are not normally paid on investments which the
Portfolio makes, turnover resulting from such investments should not adversely
affect the net asset value or net income of the Portfolio.

<PAGE>

Subject to the overriding objective of obtaining the best possible
execution of orders, the Advisor may allocate a portion of the Portfolio's
brokerage transactions to affiliates of the Advisor. In order for affiliates of
the Advisor to effect any portfolio transactions for the Portfolio, the
commissions, fees or other remuneration received by such affiliates must be
reasonable and fair compared to the commissions, fees, or other remuneration
paid to other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time. Furthermore, the Trustees of the Portfolio, including
a majority of the Trustees who are not "interested persons," have adopted
procedures which are reasonably designed to provide that any commissions, fees,
or other remuneration paid to such affiliates are consistent with the foregoing
standard.

Portfolio securities will not be purchased from or through or sold to or
through the Co-Administrator, the Distributor or the Advisor or any other
"affiliated person" (as defined in the 1940 Act) of the Co-Administrator,
Distributor or Advisor when such entities are acting as principals, except to
the extent permitted by law. In addition, the Portfolio will not purchase
securities during the existence of any underwriting group relating thereto of
which the Advisor or an affiliate of the Advisor is a member, except to the
extent permitted by law.

On those occasions when the Advisor deems the purchase or sale of a
security to be in the best interests of the Portfolio as well as other customers
including other Portfolios, the Advisor to the extent permitted by applicable
laws and regulations, may, but is not obligated to, aggregate the securities to
be sold or purchased for the Portfolio with those to be sold or purchased for
other customers in order to obtain best execution, including lower brokerage
commissions if appropriate. In such event, allocation of the securities so
purchased or sold as well as any expenses incurred in the transaction will be
made by the Advisor in the manner it considers to be most equitable and
consistent with its fiduciary obligations to the Portfolio. In some instances,
this procedure might adversely affect the Portfolio.

MASSACHUSETTS TRUST

The Trust is a trust fund of the type commonly known as a "Massachusetts
business trust" of which the Fund is a separate and distinct series. A copy of
the Declaration of Trust for the Trust is on file in the office of the Secretary
of The Commonwealth of Massachusetts. The Declaration of Trust and the By-Laws
of the Trust are designed to make the Trust similar in most respects to a
Massachusetts business corporation. The principal distinction between the two
forms concerns shareholder liability described below.

Effective January 1, 1998, the name of the Trust was changed from "The JPM
Pierpont Funds" to "J.P. Morgan Funds," and the Fund's name changed accordingly.

Under Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
trust which is not the case for a corporation. However, the Trust's Declaration
of Trust provides that the shareholders shall not be subject to any personal
liability for the acts or obligations of the Fund and that every written
agreement, obligation, instrument or undertaking made on behalf of the Fund
shall contain a provision to the effect that the shareholders are not personally
liable thereunder.

<PAGE>

No personal liability will attach to the shareholders under any undertaking
containing such provision when adequate notice of such provision is given,
except possibly in a few jurisdictions. With respect to all types of claims in
the latter jurisdictions, (i) tort claims, (ii) contract claims where the
provision referred to is omitted from the undertaking, (iii) claims for taxes,
and (iv) certain statutory liabilities in other jurisdictions, a shareholder may
be held personally liable to the extent that claims are not satisfied by the
Fund. However, upon payment of such liability, the shareholder will be entitled
to reimbursement from the general assets of the Fund. The Trustees intend to
conduct the operations of the Trust in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities of the Fund.

The Trust's Declaration of Trust further provides that the name of the
Trust refers to the Trustees collectively as Trustees, not as individuals or
personally, that no Trustee, officer, employee or agent of the Fund is liable to
the Fund or to a shareholder, and that no Trustee, officer, employee, or agent
is liable to any third persons in connection with the affairs of the Fund,
except as such liability may arise from his or its own bad faith, willful
misfeasance, gross negligence or reckless disregard of his or its duties to such
third persons. It also provides that all third persons shall look solely to Fund
property for satisfaction of claims arising in connection with the affairs of
the Fund. With the exceptions stated, the Trust's Declaration of Trust provides
that a Trustee, officer, employee, or agent is entitled to be indemnified
against all liability in connection with the affairs of the Fund.

The Trust shall continue without limitation of time subject to the
provisions in the Declaration of Trust concerning termination by action of the
shareholders or by action of the Trustees upon notice to the shareholders.

DESCRIPTION OF SHARES

The Trust is an open-end management investment company organized as a
Massachusetts business trust in which the Fund represents a separate series of
shares of beneficial interest. See "Massachusetts Trust."

The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares ($0.001 par value) of one or more series and
classes within any series and to divide or combine the shares (of any series, if
applicable) without changing the proportionate beneficial interest of each
shareholder in the Fund (or in the assets of other series, if applicable). Each
share represents an equal proportional interest in the Fund with each other
share. Upon liquidation of the Fund, holders are entitled to share pro rata in
the net assets of the Fund available for distribution to such shareholders. See
"Massachusetts Trust." Shares of the Fund have no preemptive or conversion
rights and are fully paid and nonassessable. The rights of redemption and
exchange are described in the Prospectus and elsewhere in this Statement of
Additional Information.

The shareholders of the Trust are entitled to one vote for each dollar of
net asset value (or a proportionate fractional vote in respect of a fractional
dollar amount), on matters on which shares of the Fund shall be entitled to
vote. Subject to the 1940 Act, the Trustees themselves have the power to alter
the number and the terms of office of the Trustees, to lengthen

<PAGE>

their own terms, or to make their terms of unlimited duration subject to
certain removal procedures, and appoint their own successors, provided, however,
that immediately after such appointment the requisite majority of the Trustees
have been elected by the shareholders of the Trust. The voting rights of
shareholders are not cumulative so that holders of more than 50% of the shares
voting can, if they choose, elect all Trustees being selected while the
shareholders of the remaining shares would be unable to elect any Trustees. It
is the intention of the Trust not to hold meetings of shareholders annually. The
Trustees may call meetings of shareholders for action by shareholder vote as may
be required by either the 1940 Act or the Trust's Declaration of Trust.

Shareholders of the Trust have the right, upon the declaration in writing
or vote of more than two-thirds of its outstanding shares, to remove a Trustee.
The Trustees will call a meeting of shareholders to vote on removal of a Trustee
upon the written request of the record holders of 10% of the Trust's shares. In
addition, whenever ten or more shareholders of record who have been such for at
least six months preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least $25,000 or at least
1% of the Trust's outstanding shares, whichever is less, shall apply to the
Trustees in writing, stating that they wish to communicate with other
shareholders with a view to obtaining signatures to request a meeting for the
purpose of voting upon the question of removal of any Trustee or Trustees and
accompanied by a form of communication and request which they wish to transmit,
the Trustees shall within five business days after receipt of such application
either: (1) afford to such applicants access to a list of the names and
addresses of all shareholders as recorded on the books of the Trust; or (2)
inform such applicants as to the approximate number of shareholders of record,
and the approximate cost of mailing to them the proposed communication and form
of request. If the Trustees elect to follow the latter course, the Trustees,
upon the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall, with
reasonable promptness, mail such material to all shareholders of record at their
addresses as recorded on the books, unless within five business days after such
tender the Trustees shall mail to such applicants and file with the SEC,
together with a copy of the material to be mailed, a written statement signed by
at least a majority of the Trustees to the effect that in their opinion either
such material contains untrue statements of fact or omits to state facts
necessary to make the statements contained therein not misleading, or would be
in violation of applicable law, and specifying the basis of such opinion. After
opportunity for hearing upon the objections specified in the written statements
filed, the SEC may, and if demanded by the Trustees or by such applicants shall,
enter an order either sustaining one or more of such objections or refusing to
sustain any of them. If the SEC shall enter an order refusing to sustain any of
such objections, or if, after the entry of an order sustaining one or more of
such objections, the SEC shall find, after notice and opportunity for hearing,
that all objections so sustained have been met, and shall enter an order so
declaring, the Trustees shall mail copies of such material to all shareholders
with reasonable promptness after the entry of such order and the renewal of such
tender.

The Trustees have authorized the issuance and sale to the public of shares
of 18 series of the Trust. The Trustees have no current intention to create any
classes within the initial series or any subsequent series. The Trustees may,
however, authorize the issuance of shares of additional series and the creation
of classes of shares within any series with such preferences, privileges,
limitations and voting and dividend rights as the Trustees may determine. The
proceeds from the issuance of any additional series would be invested in
separate, independently managed portfolios with distinct

<PAGE>

investment objectives, policies and restrictions, and share purchase,
redemption and net asset valuation procedures. Any additional classes would be
used to distinguish among the rights of different categories of shareholders, as
might be required by future regulations or other unforeseen circumstances. All
consideration received by the Trust for shares of any additional series or
class, and all assets in which such consideration is invested, would belong to
that series or class, subject only to the rights of creditors of the Trust and
would be subject to the liabilities related thereto. Shareholders of any
additional series or class will approve the adoption of any management contract
or distribution plan relating to such series or class and of any changes in the
investment policies related thereto, to the extent required by the 1940 Act.

For information relating to mandatory redemption of Fund shares or their
redemption at the option of the Trust under certain circumstances, see the
Prospectus.

As of October 31, 1998, the following owned of record more than 5% of the
outstanding shares of the Fund: Kingsley & Co./JPM Asset Sweep Fund Omnibus
Account(27.63%).

The address of the owner listed above is c/o Morgan, 522 Fifth Avenue, New
York, New York, 10036. As of the date of this Statement of Additional
Information, the officers and Trustees as a group owned less than 1% of the
shares of the Fund.

SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE

Unlike other mutual funds which directly acquire and manage their own
portfolio of securities, the Fund is an open-end management investment company
which seeks to achieve its investment objective by investing all of its
investable assets in the Master Portfolio, a separate registered investment
company with the same investment objective and policies as the Fund. Generally,
when a Master Portfolio seeks a vote to change a fundamental investment
restriction, its feeder fund(s) will hold a shareholder meeting and cast its
vote proportionately, as instructed by its shareholders. Fund shareholders are
entitled to one vote for each dollar of net asset value (or a proportionate
fractional vote in respect of a fractional dollar amount), on matters on which
shares of the Fund shall be entitled to vote.

In addition to selling a beneficial interest to the Fund, the Portfolio may
sell beneficial interests to other mutual funds or institutional investors. Such
investors will invest in the Portfolio on the same terms and conditions and will
bear a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio may sell shares of their own fund using a
different pricing structure than the Fund. Such different pricing structures may
result in differences in returns experienced by investors in other funds that
invest in the Portfolio. Such differences in returns are not uncommon and are
present in other mutual fund structures. Information concerning other holders of
interests in the Portfolio is available from Morgan at (800) 521-5411.

The Trust may withdraw the investment of the Fund from the Portfolio at any
time if the Board of Trustees of the Trust determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Board of Trustees
would consider what action might be taken, including the investment of all the
assets of the Fund in another pooled investment entity having the same
investment objective and restrictions in accordance with the investment policies
with respect to the Portfolio described above and in the Fund's prospectus.

<PAGE>

Certain changes in the Portfolio's fundamental investment policies or
restrictions, or a failure by the Fund's shareholders to approve such change in
the Portfolio's investment restrictions, may require withdrawal of the Fund's
interest in the Portfolio. Any such withdrawal could result in a distribution in
kind of portfolio securities (as opposed to a cash distribution) from the
Portfolio which may or may not be readily marketable. The distribution in kind
may result in the Fund having a less diversified portfolio of investments or
adversely affect the Fund's liquidity, and the Fund could incur brokerage, tax
or other charges in converting the securities to cash. Notwithstanding the
above, there are other means for meeting shareholder redemption requests, such
as borrowing.

Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns.

Additionally, because the Portfolio would become smaller, it may become
less diversified, resulting in potentially increased portfolio risk (however,
these possibilities also exist for traditionally structured funds which have
large or institutional investors who may withdraw from a fund). Also, funds with
a greater pro rata ownership in the Portfolio could have effective voting
control of the operations of the Portfolio. Whenever the Fund is requested to
vote on matters pertaining to the Portfolio (other than a vote by the Fund to
continue the operation of the Portfolio upon the withdrawal of another investor
in the Portfolio), the Trust will hold a meeting of shareholders of the Fund and
will cast all of its votes proportionately as instructed by the Fund's
shareholders. The Trust will vote the shares held by Fund shareholders who do
not give voting instructions in the same proportion as the shares of Fund
shareholders who do give voting instructions. Shareholders of the Fund who do
not vote will have no affect on the outcome of such matters.

TAXES

The following discussion of tax consequences is based on U.S. federal tax
laws in effect on the date of this Prospectus. These laws and regulations are
subject to change by legislative or administrative action.

The Fund intends to qualify and remain qualified as a regulated investment
company under Subchapter M of the Code. As a regulated investment company, the
Fund must, among other things, (a) derive at least 90% of its gross income from
dividends, interest, payments with respect to loans of stock and securities,
gains from the sale or other disposition of stock, securities or foreign
currency and other income (including but not limited to gains from options,
futures, and forward contracts) derived with respect to its business of
investing in such stock, securities or foreign currency; and (b) diversify its
holdings so that, at the end of each quarter of its taxable year, (i) at least
50% of the value of the Fund's total assets is represented by cash, cash items,
U.S. Government securities, securities of other regulated investment companies,
and other securities limited, in respect of any one issuer, to an amount not
greater than 5% of the Fund's total assets, and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its total
assets is invested in the securities of any one issuer (other than U.S.
Government securities or securities of other regulated investment companies). As
a regulated investment company, the Fund (as opposed to its shareholders) will
not be subject to federal income taxes on the net investment income and capital
gain that it distributes to its shareholders, provided that at least 90% of its
net investment income and

<PAGE>

realized net short-term capital gain in excess of net long-term capital
loss for the taxable year is distributed in accordance with the Code's timing
requirements.

Under the Code, the Fund will be subject to a 4% excise tax on a portion of
its undistributed taxable income and capital gains if it fails to meet certain
distribution requirements by the end of the calendar year. The Fund intends to
make distributions in a timely manner and accordingly does not expect to be
subject to the excise tax.

For federal income tax purposes, dividends that are declared by the Fund in
October, November or December as of a record date in such month and actually
paid in January of the following year will be treated as if they were paid on
December 31 of the year declared. Therefore, such dividends generally will be
taxable to a shareholder in the year declared rather than the year paid.

The Fund intends to qualify to pay exempt-interest dividends to its
shareholders by having, at the close of each quarter of its taxable year, at
least 50% of the value of its total assets consist of tax exempt securities. An
exempt-interest dividend is that part of dividend distributions made by the Fund
which is properly designated as consisting of interest received by the Fund on
tax exempt securities. Shareholders will not incur any federal income tax on the
amount of exempt-interest dividends received by them from the Fund, other than
the alternative minimum tax under certain circumstances. In view of the Fund's
investment policies, it is expected that a substantial portion of all dividends
will be exempt-interest dividends, although the Fund may from time to time
realize and distribute net short-term capital gains and may invest limited
amounts in taxable securities under certain circumstances.

Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital loss (other than exempt interest
dividends) are generally taxable to shareholders of the Fund as ordinary income
whether such distributions are taken in cash or reinvested in additional shares.
Distributions to corporate shareholders of the Fund are not eligible for the
dividends received deduction. Distributions of net long-term capital gains
(i.e., net long-term capital gains in excess of net short-term capital loss) are
taxable to shareholders of the Fund as long-term capital gain, regardless of
whether such distributions are taken in cash or reinvested in additional shares
and regardless of how long a shareholder has held shares in the Fund. In
general, long-term capital gain of an individual shareholder will be subject to
a reduced rate of tax. Investors should consult their tax advisors concerning
the treatment of capital gains and losses. Additionally, any loss realized on a
redemption or exchange of shares of the Fund will be disallowed to the extent
the shares disposed of are replaced by securities that are substantially
identical to shares of the Fund within a period of 61 days beginning 30 days
before such disposition, such as pursuant to reinvestment of a dividend in
shares of the Fund.

To maintain a constant $1.00 per share net asset value, the Trustees of the
Trust may direct that the number of outstanding shares be reduced pro rata. If
this adjustment is made, it will reflect the lower market value of portfolio
securities and not realized losses. The adjustment may result in a shareholder
having more dividend income than net income in his account for a period. When
the number of outstanding shares of the Fund is reduced, the shareholder's basis
in the shares of the Fund may be adjusted to reflect the difference between
taxable income and net dividends actually distributed. This difference may be
realized as a capital loss when the shares are liquidated. Subject to certain
limited exceptions, capital losses cannot be used to offset ordinary income. See
"Net Asset Value."

<PAGE>

Gains or losses on sales of portfolio securities will be treated as
long-term capital gains or losses if the securities have been held for more than
one year except in certain cases where, if applicable, a put is acquired or a
call option is written thereon or straddle rules are otherwise applicable. Other
gains or losses on the sale of securities will be short-term capital gains or
losses. Gains and losses on the sale, lapse or other termination of options on
securities will be treated as gains and losses from the sale of securities. If
an option written by the Portfolio lapses or is terminated through a closing
transaction, such as a repurchase by the Portfolio of the option from its
holder, the Portfolio will realize a short-term capital gain or loss, depending
on whether the premium income is greater or less than the amount paid by the
Portfolio in the closing transaction. If securities are purchased by the
Portfolio pursuant to the exercise of a put option written by it, the Portfolio
will subtract the premium received from its cost basis in the securities
purchased.

Any distribution of net investment income or capital gains will have the
effect of reducing the net asset value of Fund shares held by a shareholder by
the same amount as the distribution. If the net asset value of the shares is
reduced below a shareholder's cost as a result of such a distribution, the
distribution, although constituting a return of capital to the shareholder, will
be taxable as described above.

Any gain or loss realized on the redemption or exchange of Fund shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held for more than one year, and
otherwise as short-term capital gain or loss. However, any loss realized by a
shareholder upon the redemption or exchange of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
long-term capital gain distributions received by the shareholder with respect to
such shares.

If a correct and certified taxpayer identification number is not on file,
the Fund is required, subject to certain exemptions, to withold 31% of certain
payments made or distributions declared to non-corporate shareholders. Foreign
Shareholders. Dividends of net investment income and distributions of realized
net short-term gain in excess of net long-term loss to a shareholder who, as to
the United States, is a nonresident alien individual, fiduciary of a foreign
trust or estate, foreign corporation or foreign partnership (a "foreign
shareholder") will be subject to U.S. withholding tax at the rate of 30% (or
lower treaty rate) unless the dividends are effectively connected with a U.S.
trade or business of the shareholder, in which case the dividends will be
subject to tax on a net income basis at the graduated rates applicable to U.S.
individuals or domestic corporations. Distributions treated as long term capital
gains to foreign shareholders will not be subject to U.S. tax unless the
distributions are effectively connected with the shareholder's trade or business
in the United States or, in the case of a shareholder who is a nonresident alien
individual, the shareholder was present in the United States for more than 182
days during the taxable year and certain other conditions are met.

In the case of a foreign shareholder who is a nonresident alien individual
or foreign entity, the Fund may be required to withhold U.S. federal income tax
as "backup withholding" at the rate of 31% from distributions treated as
long-term capital gains and from the proceeds of redemptions, exchanges or other
dispositions of Fund shares unless IRS Form W-8 is provided. Transfers by gift
of shares of the Fund by a foreign shareholder who is a nonresident alien
individual will not be subject to U.S.

<PAGE>

federal gift tax, but the value of shares of the Fund held by such a
shareholder at his or her death will be includible in his or her gross estate
for U.S. federal estate tax purposes.

State and Local Taxes. The Fund may be subject to state or local taxes in
jurisdictions in which the Fund is deemed to be doing business. In addition, the
treatment of the Fund and its shareholders in those states which have income tax
laws might differ from treatment under the federal income tax laws. Shareholders
should consult their own tax advisors with respect to any state or local taxes.

Other Taxation. The Trust is organized as a Massachusetts business trust
and, under current law, neither the Trust nor the Fund is liable for any income
or franchise tax in The Commonwealth of Massachusetts, provided that the Fund
continues to qualify as a regulated investment company under Subchapter M of the
Code. The Portfolio is organized as a New York trust. The Portfolio is not
subject to any federal income taxation or income or franchise tax in the State
of New York or The Commonwealth of Massachusetts. The investment by the Fund in
the Portfolio does not cause the Fund to be liable for any income or franchise
tax in the State of New York.

ADDITIONAL INFORMATION

As used in this Statement of Additional Information and the Prospectus, the
term "majority of the outstanding voting securities" means the vote of (i) 67%
or more of the Fund's shares or the Portfolio's outstanding voting securities
present at a meeting, if the holders of more than 50% of the Fund's outstanding
shares or the Portfolio's outstanding voting securities are present or
represented by proxy, or (ii) more than 50% of the Fund's outstanding shares or
the Portfolio's outstanding voting securities, whichever is less.

Telephone calls to the Fund, J.P. Morgan or Financial Professionals as
shareholder servicing agent may be tape recorded. With respect to the securities
offered hereby, this Statement of Additional Information and the Prospectus do
not contain all the information included in the Trust's registration statement
filed with the SEC under the 1933 Act and 1940 Act and the Portfolio's
registration statements filed under the 1940 Act. Pursuant to the rules and
regulations of the SEC, certain portions have been omitted. The registration
statements including the exhibits filed therewith may be examined at the office
of the SEC in Washington, D.C.

Statements contained in this Statement of Additional Information and the
Prospectus concerning the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the applicable
Registration Statements. Each such statement is qualified in all respects by
such reference.

No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in the
Prospectus and this Statement of Additional Information, in connection with the
offer contained therein and, if given or made, such other information or
representations must not be relied upon as having been authorized by any of the
Trust, the Fund or the Distributor. The Prospectus and this Statement of
Additional Information do not constitute an offer by the Fund or by the
Distributor to sell or solicit any offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful for the Fund or
the Distributor to make such offer in such jurisdictions.

<PAGE>

The Year 2000 Initiative

With the new millennium rapidly approaching, organizations are examining
their computer systems to ensure they are year 2000 compliant. The issue, in
simple terms, is that many existing computer systems use only two numbers to
identify a year in the date field with the assumption that the first two digits
are always 19. As the century is implied in the date, on January 1, 2000,
computers that are not year 2000 compliant will assume the year is 1900. Systems
that calculate, compare, or sort using the incorrect date will cause erroneous
results, ranging from system malfunctions to incorrect or incomplete transaction
processing. If not remedied, potential risks include business interruption or
shutdown, financial loss, reputation loss, and/or legal liability.

J.P. Morgan has undertaken a firmwide initiative to address the year 2000
issue and has developed a comprehensive plan to prepare, as appropriate, its
computer systems. Each business line has taken responsibility for identifying
and fixing the problem within its own area of operation and for addressing all
interdependencies. A multidisciplinary team of internal and external experts
supports the business teams by providing direction and firmwide coordination.
Working together, the business and multidisciplinary teams have completed a
thorough education and awareness initiative and a global inventory and
assessment of J.P. Morgan's technology and application portfolio to understand
the scope of the year 2000 impact at J.P. Morgan. J.P. Morgan presently is
renovating and testing these technologies and applications in partnership with
external consulting and software development organizations, as well as with year
2000 tool providers. J.P. Morgan is on target with its plan to substantially
complete renovation, testing, and validation of its key systems by year-end 1998
and to participate in industry-wide testing (or streetwide testing) in 1999.
J.P. Morgan is also working with key external parties, including clients,
counterparties, vendors, exchanges, depositories, utilities, suppliers, agents
and regulatory agencies, to stem the potential risks the year 2000 problem poses
to J.P. Morgan and to the global financial community.

Costs associated with efforts to prepare J.P. Morgan's systems for the year
2000 approximated $95 million in 1997. In 1998, J.P. Morgan will continue its
efforts to prepare its systems for the year 2000. The total cost to become
year-2000 compliant is estimated at $250 million, for internal systems
renovation and testing, testing equipment, and both internal and external
resources working on the project. Remaining costs will be incurred primarily in
1998. The costs associated with J.P. Morgan becoming year-2000 compliant will be
borne by J.P. Morgan and not the Fund nor the Portfolio.

FINANCIAL STATEMENTS

The financial statements and the report thereon of PricewaterhouseCoopers
LLP are incorporated herein by reference from the Fund's August 31, 1998 annual
report filing made with the SEC on October 30, 1998 pursuant to Section 30(b) of
the 1940 Act and Rule 30b2-1 thereunder (Accession Number 0001047469-98-038755).
The financial statements are available without charge upon request by calling
J.P. Morgan Funds Services at (800) 521-5411. The Fund's financial statements
include the financial statements of the Portfolio.

<PAGE>

APPENDIX A

Description of Security Ratings

STANDARD & POOR'S

Corporate and Municipal Bonds

AAA - Debt rated AAA have the highest ratings assigned by Standard & Poor's
to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.

AA - Debt rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small degree.

A - Debt rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB - Debt rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.

Commercial Paper, including Tax Exempt

A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designations 1, 2, and 3 to indicate the relative degree of safety.

A-1 - This designation indicates that the degree of safety regarding timely
payment is very strong.

Short-Term Tax-Exempt Notes

SP-1 - The short-term tax-exempt note rating of SP-1 is the highest rating
assigned by Standard & Poor's and has a very strong or strong capacity to pay
principal and interest. Those issues determined to possess overwhelming safety
characteristics are given a "plus" (+) designation.

SP-2 - The short-term tax-exempt note rating of SP-2 has a satisfactory
capacity to pay principal and interest.

MOODY'S

Corporate and Municipal Bonds

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

<PAGE>

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Commercial Paper, including Tax Exempt

Prime-1 - Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:

- Leading market positions in well established industries. - High rates of
return on funds employed. - Conservative capitalization structures with moderate
reliance on debt and ample asset protection. - Broad margins in earnings
coverage of fixed financial charges and high internal cash generation. - Well
established access to a range of financial markets and assured sources of
alternate liquidity.

Short-Term Tax Exempt Notes

MIG-1 - The short-term tax-exempt note rating MIG-1 is the highest rating
assigned by Moody's for notes judged to be the best quality. Notes with this
rating enjoy strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both.

MIG-2 - MIG-2 rated notes are of high quality but with margins of
protection not as large as MIG-1.

-------- 1Mr. Healey is an "interested person" (as defined in the 1940 Act)
of the Trust. Mr. Healey is also an "interested person" (as defined in the 1940
Act) of the advisor due to his son's affiliation with JPMIM.

<PAGE>

PART C

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements

The following financial statements are included in Part A:

Financial Highlights:
J.P. Morgan Tax Exempt Money Market Fund
J.P. Morgan Prime Money Market Fund
J.P. Morgan Federal Money Market Fund

The following financial statements are incorporated by reference into Part B:

J.P. MORGAN TAX EXEMPT MONEY MARKET FUND
Statement of Assets and Liabilities at August 31, 1998
Statement of Operations for the fiscal year ended August 31, 1998
Statement of Changes in Net Assets for the fiscal years ended August 31, 1998
and 1997 Financial Highlights
Notes to Financial Statements August 31, 1998

THE TAX EXEMPT MONEY MARKET PORTFOLIO Schedule of Investments at August 31, 1998
Statement of Assets and Liabilities at August 31, 1998
Statement of Operations for the fiscal year ended August 31, 1998
Statement of Changes in Net Assets for the fiscal years ended August 31, 1998
and 1997 Supplementary Data
Notes to Financial Statements August 31, 1998

(b) Exhibits
Exhibit Number

1. Declaration of Trust, as amended, was filed as Exhibit No. 1 to
Post-Effective Amendment No. 26 to the Registration Statement filed on September
27, 1996 (Accession Number 0000912057-96-021331).

1(a). Amendment No. 5 to Declaration of Trust; Amendment and Fifth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest.*

1(b). Amendment No. 6 to Declaration of Trust; Amendment and Sixth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(b) to Post-Effective Amendment No. 32 to the
Registration Statement February 28, 1997 (Accession Number
0001016964-97-000038).

1(c). Amendment No. 7 to Declaration of Trust; Amendment and Seventh
Amended and Restated Establishment and Designation of Series of Shares of
Beneficial Interest was filed as Exhibit No. 1(c) to Post-Effective Amendment
No. 34 to the Registration Statement filed on April 30, 1997 (Accession Number
0001019694-97-000063).

1(d) Amendment No. 8 to Declaration of Trust; Amendment and Eighth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest was filed as Exhibit No. 1(d) to Post-Effective Amendment No. 41 to the
Registration Statement filed on October 21, 1997 (Accession Number
0001042058-97-000006).

1(e) Amendment No. 9 to Declaration of Trust; Amendment and Ninth Amended
and Restated Establishment and Designation of Series of Shares of Beneficial
Interest. (Accession Number 001041455-97-000013)

2. Restated By-Laws of Registrant.*

6. Distribution Agreement between Registrant and Funds Distributor, Inc.
("FDI").*

8. Custodian Contract between Registrant and State Street Bank and Trust
Company ("State Street").*

9(a). Co-Administration Agreement between Registrant and FDI.*

9(b). Restated Shareholder Servicing Agreement between Registrant and
Morgan Guaranty Trust Company of New York ("Morgan Guaranty") was filed as
Exhibit No. 9(b) to Post-Effective Amendment No. 33 to the Registration
Statement filed on March 6, 1997 (Accession Number 0001019694-97-000048).

9(c). Transfer Agency and Service Agreement between Registrant and State
Street.*

9(d). Restated Administrative Services Agreement between Registrant and
Morgan Guaranty.*

9(e). Fund Services Agreement, as amended, between Registrant and Pierpont
Group, Inc.*

10. Opinion and consent of Sullivan & Cromwell.*

11. Consents of independent accountants. (filed herewith)

13. Purchase agreements with respect to Registrant's initial shares.*

16. Schedule for computation of performance quotations.*

18. Powers of Attorney were filed as Exhibit No. 18 to Post-Effective
Amendment No. 41 to the Registration Statement filed on October 21, 1997
(Accession Number 0001042058-97-000006).

27. Financial Data Schedules. (filed herewith)

- ------------------------

* Incorporated herein by reference to Post-Effective Amendment No. 30 to
the Registration Statement filed on December 27, 1996 (Accession Number
0001016964-96-000066).

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

Not applicable.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

Shares of Beneficial Interest ($0.001 par value).
Title of Class: Number of Record Holders as of October 31, 1998.

J.P. Morgan Prime Money Market Fund: 4,896
J.P. Morgan Tax Exempt Money Market Fund: 1,989
J.P. Morgan Federal Money Market Fund: 711
J.P. Morgan Short Term Bond Fund: 180
J.P. Morgan Bond Fund: 1,002
J.P. Morgan Tax Exempt Bond Fund: 1,225
J.P. Morgan New York Tax Exempt Bond Fund: 324
J.P. Morgan Diversified Fund: 971
J.P. Morgan U.S. Equity Fund: 2,876
J.P. Morgan U.S. Small Company Fund: 2,059
J.P. Morgan Disciplined Equity Fund: 206
J.P. Morgan International Equity Fund: 1,169
J.P. Morgan Emerging Markets Equity Fund: 1,128
J.P. Morgan European Equity Fund: 363
J.P. Morgan International Opportunities Fund: 611
J.P. Morgan Global Strategic Income Fund: 152
J.P. Morgan Emerging Markets Debt Fund: 120
J.P. Morgan U.S. Small Company Opportunities Fund: 1,344

ITEM 27. INDEMNIFICATION.

Reference is made to Section 5.3 of Registrant's Declaration of Trust and
Section 5 of Registrant's Distribution Agreement.

Registrant, its Trustees and officers are insured against certain expenses in
connection with the defense of claims, demands, actions, suits, or proceedings,
and certain liabilities that might be imposed as a result of such actions, suits
or proceedings.

Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "1933 Act"), may be permitted to directors, trustees,
officers and controlling persons of the Registrant and the principal underwriter
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, trustee, officer, or controlling person of the Registrant
and the principal underwriter in connection with the successful defense of any
action, suite or proceeding) is asserted against the Registrant by such
director, trustee, officer or controlling person or principal underwriter in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

Not Applicable.

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) FDI, located at 60 State Street, Suite 1300, Boston, Massachusetts 02109, is
the principal underwriter of the Registrant's shares.

FDI acts as principal underwriter of the following investment companies other
than the Registrant:

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
BJB Investment Funds
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Founders Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Funds
J.P. Morgan Series Trust
J.P. Morgan Series Trust II
LaSalle Partners Funds, Inc.
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

FDI does not act as depositor or investment adviser of any investment companies.

FDI is registered with the Securities and Exchange Commission as a broker-dealer
and is a member of the National Association of Securities Dealers. FDI is an
indirect wholly-owned subsidiary of Boston Institutional Group, Inc., a holding
company all of whose outstanding shares are owned by key employees.

(b) The information required by this Item 29(b) with respect to each director,
officer and partner of FDI is incorporated herein by reference to Schedule A of
Form BD filed by FDI with the Securities and Exchange Commission pursuant to the
Securities Act of 1934 (SEC File No. 8-20518).

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

PIERPONT GROUP, INC.: 461 Fifth Avenue, New York, New York 10017 (records
relating to its assisting the Trustees in carrying out their duties in
supervising the Registrant's affairs).

MORGAN GUARANTY TRUST COMPANY OF NEW YORK: 60 Wall Street, New York, New York
10260-0060, 522 Fifth Avenue, New York, New York 10036 or 9 West 57th Street,
New York, New York 10019 (records relating to its functions as shareholder
servicing agent and administrative services agent).

STATE STREET BANK AND TRUST COMPANY: 1776 Heritage Drive, North Quincy,
Massachusetts 02171 and 40 King Street West, Toronto, Ontario, Canada M5H 3Y8
(records relating to its functions as fund accountant, custodian, transfer agent
and dividend disbursing agent).

FUNDS DISTRIBUTOR, INC.: 60 State Street, Suite 1300, Boston, Massachusetts
02109 (records relating to its functions as distributor and co-administrator).

ITEM 31. MANAGEMENT SERVICES.

Not Applicable.

ITEM 32. UNDERTAKINGS.

(a) If the information called for by Item 5A of Form N-1A is contained in
the latest annual report to shareholders, the Registrant shall
furnish each person to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to shareholders upon request
and without charge.

(b) The Registrant undertakes to comply with Section 16(c) of the 1940
Act as though such provisions of the 1940 Act were applicable to the
Registrant, except that the request referred to in the third full
paragraph thereof may only be made by shareholders who hold in the
aggregate at least 10% of the outstanding shares of the Registrant,
regardless of the net asset value of shares held by such requesting
shareholders.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Boston and Commonwealth of Massachusetts on the 27th day of November,
1998.

J.P. MORGAN FUNDS

By /s/ Michael S. Petrucelli
---------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities
indicated on November 27, 1998.

George A. Rio*
- ---------------------------
George A. Rio
President and Treasurer

Matthew Healey*
- -----------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)

Frederick S. Addy*
- ------------------------------
Frederick S. Addy
Trustee

William G. Burns*
- ------------------------------
William G. Burns
Trustee

Arthur C. Eschenlauer*
- ------------------------------
Arthur C. Eschenlauer
Trustee

Michael P. Mallardi*
- ------------------------------
Michael P. Mallardi
Trustee

*By /s/ Michael S. Petrucelli
---------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney previously filed.

<PAGE>

SIGNATURES

Each Portfolio has duly caused this registration statement on Form N-1A
("Registration Statement") of the J.P. Morgan Funds (the "Trust") (File No.
033-54632) to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston and Commonwealth of Massachusetts, on the 27th
day of November, 1998

THE TAX EXEMPT MONEY MARKET PORTFOLIO

By /s/ Michael S. Petrucelli
---------------------------
Michael S. Petrucelli
Vice President and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, the Trust's
Registration Statement has been signed below by the following persons in the
capacities indicated on November 27, 1998.

George A. Rio*
- ----------------------------
George A. Rio
President and Treasurer
Officer of the Portfolios

Matthew Healey*
- -----------------------------
Matthew Healey
Trustee, Chairman and Chief Executive Officer (Principal Executive Officer)
of the Portfolios

Frederick S. Addy*
- ----------------------------
Frederick S. Addy
Trustee of the Portfolios

William G. Burns*
- ----------------------------
William G. Burns
Trustee of the Portfolios

Arthur C. Eschenlauer*
- ----------------------------
Arthur C. Eschenlauer
Trustee of the Portfolios

Michael P. Mallardi*
- ----------------------------
Michael P. Mallardi
Trustee of the Portfolios

* By /s/ Michael S. Petrucelli
---------------------------
Michael S. Petrucelli
as attorney-in-fact pursuant to a power of attorney previously filed.

INDEX TO EXHIBITS

Exhibit No. Description of Exhibit
- ------------- ----------------------
Ex-11 Consents of Independent Accountants

EX-27.1-27.18 Financial Data Schedules

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 58 to the registration statement on Form N-1A (the "Registration
Statement") of our reports dated October 15, 1998, relating to the financial
statements and financial highlights of J.P. Morgan Tax Exempt Money Market Fund
and the financial statements and supplementary data of The Tax Exempt Money
Market Portfolio appearing in the August 31, 1998 Annual Report, which are also
incorporated by reference into the Registration Statement.

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this registration
statement of our reports dated January 20, 1998, relating to the financial
statements and financial highlights of J.P. Morgan Prime Money Market Fund and
the financial statements and supplementary data of The Prime Money Market
Portfolio appearing in the November 30, 1997 Annual Report, which are also
incorporated by reference into the Registration Statement.

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this registration
statement of the reports dated December 17, 1997, relating to the financial
statements and financial highlights of J.P. Morgan Federal Money Market Fund
(formerly The JPM Pierpont Federal Money Market Fund) and the financial
statements and supplementary data of The Federal Money Market Portfolio
appearing in the October 31, 1997 Annual Report, which are also incorporated by
reference into the Registration Statement.

We also consent to the references to us under the heading "Financial Highlights"
in the Prospectuses and under the headings "Independent Accountants" and
"Financial Statements" in the Statement of Additional Information.

/s/PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
November 25, 1998

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN PRIME MONEY MARKET FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK>0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 012
<NAME> J.P. MORGAN PRIME MONEY MARKET FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 2,565,158
<RECEIVABLES> 0
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,565,166
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,193
<TOTAL-LIABILITIES> 2,193
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,563,558
<SHARES-COMMON-STOCK> 2,563,198
<SHARES-COMMON-PRIOR> 2,318,656
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (63)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,562,973
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 69,121
<OTHER-INCOME> 0
<EXPENSES-NET> 2,366
<NET-INVESTMENT-INCOME> 66,755
<REALIZED-GAINS-CURRENT> (4)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 66,751
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 66,755
<DISTRIBUTIONS-OF-GAINS> (2)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,991,329
<NUMBER-OF-SHARES-REDEEMED> 8,801,738
<SHARES-REINVESTED> 54,951
<NET-CHANGE-IN-ASSETS> 244,536
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,366
<AVERAGE-NET-ASSETS> 2,479,730
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .027
<PER-SHARE-GAIN-APPREC> .000
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .027
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial data extracted from the annual report
dated August 31, 1998 for the J.P. Morgan Tax Exempt Money Market Fund and is
qualified in its entirety by reference to such annual report.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,241,097
<RECEIVABLES> 0
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,241,100
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,194
<TOTAL-LIABILITIES> 1,194
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,240,177
<SHARES-COMMON-STOCK> 1,239,832
<SHARES-COMMON-PRIOR> 1,103,923
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (271)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,239,906
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 40,736
<OTHER-INCOME> 0
<EXPENSES-NET> 2,540
<NET-INVESTMENT-INCOME> 38,196
<REALIZED-GAINS-CURRENT> 42
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 38,238
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 38,196
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,229,719
<NUMBER-OF-SHARES-REDEEMED> 5,123,034
<SHARES-REINVESTED> 29,224
<NET-CHANGE-IN-ASSETS> 135,951
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,540
<AVERAGE-NET-ASSETS> 1,202,674
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .032
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .032
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> .43
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM-SAR DATED APRIL 30, 1998 FOR J.P. MORGAN FEDERAL MONEY MARKET FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 001
<NAME> J.P. MORGAN FEDERAL MONEY MARKET FUND
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 338481
<RECEIVABLES> 0
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 338482
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 677
<TOTAL-LIABILITIES> 677
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 337805
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 337805
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8958
<OTHER-INCOME> 0
<EXPENSES-NET> 653
<NET-INVESTMENT-INCOME> 8305
<REALIZED-GAINS-CURRENT> (1)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 8304
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8304
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1123008
<NUMBER-OF-SHARES-REDEEMED> 1029718
<SHARES-REINVESTED> 5441
<NET-CHANGE-IN-ASSETS> 98731
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 763
<AVERAGE-NET-ASSETS> 323538
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .026
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .026
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .41
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM-SAR DATED APRIL 30, 1998 FOR J.P. MORGAN SHORT TERM BOND FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P MORGAN FUNDS
<SERIES>
<NUMBER> 002
<NAME> J.P MORGAN SHORT TERM BOND FUND
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 22876
<RECEIVABLES> 409
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23286
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66
<TOTAL-LIABILITIES> 66
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23266
<SHARES-COMMON-STOCK> 2357
<SHARES-COMMON-PRIOR> 1474
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 46
<ACCUM-APPREC-OR-DEPREC> 1
<NET-ASSETS> 23220
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 627
<EXPENSES-NET> 25
<NET-INVESTMENT-INCOME> 602
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> (13)
<NET-CHANGE-FROM-OPS> 592
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 603
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1192
<NUMBER-OF-SHARES-REDEEMED> 356
<SHARES-REINVESTED> 47
<NET-CHANGE-IN-ASSETS> 8700
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 49
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62
<AVERAGE-NET-ASSETS> 20537
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .29
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.85
<EXPENSE-RATIO> .50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 00

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM-SAR DATED APRIL 30, 1998 FOR J.P. MORGAN BOND FUND AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 003
<NAME> J.P. MORGAN BOND FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 194,130
<RECEIVABLES> 61
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 194,193
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 169
<TOTAL-LIABILITIES> 169
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 190,321
<SHARES-COMMON-STOCK> 18,561
<SHARES-COMMON-PRIOR> 16,244
<ACCUMULATED-NII-CURRENT> 66
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 624
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,013
<NET-ASSETS> 194024
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 6,129
<EXPENSES-NET> 265
<NET-INVESTMENT-INCOME> 5,864
<REALIZED-GAINS-CURRENT> 639
<APPREC-INCREASE-CURRENT> (131)
<NET-CHANGE-FROM-OPS> 6,371
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,870
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,383
<NUMBER-OF-SHARES-REDEEMED> 3,577
<SHARES-REINVESTED> 511
<NET-CHANGE-IN-ASSETS> 24,790
<ACCUMULATED-NII-PRIOR> 72
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 15
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 265
<AVERAGE-NET-ASSETS> 183,741
<PER-SHARE-NAV-BEGIN> 10.42
<PER-SHARE-NII> 0.33
<PER-SHARE-GAIN-APPREC> 0.03
<PER-SHARE-DIVIDEND> 0.33
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.45
<EXPENSE-RATIO> 0.66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial data extracted from the annual report
dated August 31, 1998 for the J.P. Morgan Tax Exempt Bond Fund and is qualified
in its entirety by reference to such annual report.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 440,204
<RECEIVABLES> 17
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 440,223
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 998
<TOTAL-LIABILITIES> 998
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 409,859
<SHARES-COMMON-STOCK> 36,145
<SHARES-COMMON-PRIOR> 33,828
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (117)
<ACCUMULATED-NET-GAINS> 509
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 28,740
<NET-ASSETS> 439,225
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,622
<OTHER-INCOME> 0
<EXPENSES-NET> 1,111
<NET-INVESTMENT-INCOME> 18,511
<REALIZED-GAINS-CURRENT> 532
<APPREC-INCREASE-CURRENT> 9,584
<NET-CHANGE-FROM-OPS> 28,627
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18,515
<DISTRIBUTIONS-OF-GAINS> 119
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 156,589
<NUMBER-OF-SHARES-REDEEMED> 143,254
<SHARES-REINVESTED> 14,890
<NET-CHANGE-IN-ASSETS> 38,218
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 287
<OVERDISTRIB-NII-PRIOR> (2)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,111
<AVERAGE-NET-ASSETS> 416,756
<PER-SHARE-NAV-BEGIN> 11.85
<PER-SHARE-NII> .54
<PER-SHARE-GAIN-APPREC> .30
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .54
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.15
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM-SAR DATED MARCH 31, 1998 FOR J.P. MORGAN NEW YORK TOTAL RETURN BOND FUND
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 013
<NAME> J.P. MORGAN NEW YORK TOTAL RETURN BOND FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 85253
<RECEIVABLES> 29
<ASSETS-OTHER> 4
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 85286
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 125
<TOTAL-LIABILITIES> 125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 82226
<SHARES-COMMON-STOCK> 8016
<SHARES-COMMON-PRIOR> 5465
<ACCUMULATED-NII-CURRENT> 21
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 144
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2770
<NET-ASSETS> 85161
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3463
<OTHER-INCOME> 0
<EXPENSES-NET> 488
<NET-INVESTMENT-INCOME> 2975
<REALIZED-GAINS-CURRENT> 577
<APPREC-INCREASE-CURRENT> 1726
<NET-CHANGE-FROM-OPS> 5278
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2975
<DISTRIBUTIONS-OF-GAINS> 433
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3864
<NUMBER-OF-SHARES-REDEEMED> 1556
<SHARES-REINVESTED> 244
<NET-CHANGE-IN-ASSETS> 28963
<ACCUMULATED-NII-PRIOR> 21
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 528
<AVERAGE-NET-ASSETS> 101989
<PER-SHARE-NAV-BEGIN> 10.28
<PER-SHARE-NII> .46
<PER-SHARE-GAIN-APPREC> .40
<PER-SHARE-DIVIDEND> .46
<PER-SHARE-DISTRIBUTIONS> .06
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> .71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN U.S. EQUITY FUND AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 010
<NAME> J.P. MORGAN U.S. EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 448,301
<RECEIVABLES> 206
<ASSETS-OTHER> 37
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 448,544
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 400
<TOTAL-LIABILITIES> 400
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 328,959
<SHARES-COMMON-STOCK> 17,467
<SHARES-COMMON-PRIOR> 14,722
<ACCUMULATED-NII-CURRENT> 579
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 48,997
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69,609
<NET-ASSETS> 448,144
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 4,239
<EXPENSES-NET> 1,309
<NET-INVESTMENT-INCOME> 2,930
<REALIZED-GAINS-CURRENT> 99,517
<APPREC-INCREASE-CURRENT> (1,088)
<NET-CHANGE-FROM-OPS> 101,359
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,619
<DISTRIBUTIONS-OF-GAINS> 75,350
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,184
<NUMBER-OF-SHARES-REDEEMED> 3,622
<SHARES-REINVESTED> 3,183
<NET-CHANGE-IN-ASSETS> 85,541
<ACCUMULATED-NII-PRIOR> 1,269
<ACCUMULATED-GAINS-PRIOR> 37,796
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 00
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,309
<AVERAGE-NET-ASSETS> 412,025
<PER-SHARE-NAV-BEGIN> 24.63
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 5.92
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 4.84
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.66
<EXPENSE-RATIO> 0.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN U.S. SMALL COMPANY FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 011
<NAME> J.P. MORGAN U.S. SMALL COMPANY FUND
<MULTIPLIER> 1000

<S> <C>

<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 261693
<RECEIVABLES> 544
<ASSETS-OTHER> 62
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 262299
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 495
<TOTAL-LIABILITIES> 495
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 216250
<SHARES-COMMON-STOCK> 9460
<SHARES-COMMON-PRIOR> 9140
<ACCUMULATED-NII-CURRENT> 78
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22790
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22686
<NET-ASSETS> 261804
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 1766
<EXPENSES-NET> 743
<NET-INVESTMENT-INCOME> 1023
<REALIZED-GAINS-CURRENT> 61222
<APPREC-INCREASE-CURRENT> (8412)
<NET-CHANGE-FROM-OPS> 53833
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1261
<DISTRIBUTIONS-OF-GAINS> 36242
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1988
<NUMBER-OF-SHARES-REDEEMED> 2727
<SHARES-REINVESTED> 1059
<NET-CHANGE-IN-ASSETS> 23819
<ACCUMULATED-NII-PRIOR> 593
<ACCUMULATED-GAINS-PRIOR> 18766
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 908
<AVERAGE-NET-ASSETS> 264954
<PER-SHARE-NAV-BEGIN> 26.04
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 5.58
<PER-SHARE-DIVIDEND> .14
<PER-SHARE-DISTRIBUTIONS> 3.91
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.68
<EXPENSE-RATIO> .97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM N-SAR DATED APRIL 30, 1998 FOR THE J.P. MORGAN INTERNATIONAL EQUITY FUND
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 004
<NAME> J.P. MORGAN INTERNATIONAL EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 113324
<RECEIVABLES> 22
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 113349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 84
<TOTAL-LIABILITIES> 84
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 91108
<SHARES-COMMON-STOCK> 9760
<SHARES-COMMON-PRIOR> 13371
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 356
<ACCUMULATED-NET-GAINS> 1831
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20682
<NET-ASSETS> 113265
<DIVIDEND-INCOME> 912
<INTEREST-INCOME> 126
<OTHER-INCOME> 0
<EXPENSES-NET> 720
<NET-INVESTMENT-INCOME> 318
<REALIZED-GAINS-CURRENT> 1809
<APPREC-INCREASE-CURRENT> 13947
<NET-CHANGE-FROM-OPS> 16074
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4506
<DISTRIBUTIONS-OF-GAINS> 5060
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1079
<NUMBER-OF-SHARES-REDEEMED> 5360
<SHARES-REINVESTED> 670
<NET-CHANGE-IN-ASSETS> (33394)
<ACCUMULATED-NII-PRIOR> 3833
<ACCUMULATED-GAINS-PRIOR> 5082
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 9
<GROSS-EXPENSE> 720
<AVERAGE-NET-ASSETS> 122391
<PER-SHARE-NAV-BEGIN> 10.97
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 1.42
<PER-SHARE-DIVIDEND> .42
<PER-SHARE-DISTRIBUTIONS> .47
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.60
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 497
<AVG-DEBT-PER-SHARE> .04

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM N-SAR DATED APRIL 30, 1998 FOR THE J.P. MORGAN EMERGING MARKETS EQUITY
FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 005
<NAME> J.P. MORGAN EMERGING MARKETS EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 58072
<RECEIVABLES> 38
<ASSETS-OTHER> 12
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 58122
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66
<TOTAL-LIABILITIES> 66
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63141
<SHARES-COMMON-STOCK> 5906
<SHARES-COMMON-PRIOR> 4648
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (52)
<ACCUMULATED-NET-GAINS> (8328)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3295
<NET-ASSETS> 58056
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 322
<EXPENSES-NET> 109
<NET-INVESTMENT-INCOME> 213
<REALIZED-GAINS-CURRENT> (7144)
<APPREC-INCREASE-CURRENT> 8978
<NET-CHANGE-FROM-OPS> 2047
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 315
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3905
<NUMBER-OF-SHARES-REDEEMED> 2677
<SHARES-REINVESTED> 30
<NET-CHANGE-IN-ASSETS> 12612
<ACCUMULATED-NII-PRIOR> 49
<ACCUMULATED-GAINS-PRIOR> (1184)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 121
<AVERAGE-NET-ASSETS> 52802
<PER-SHARE-NAV-BEGIN> 9.78
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.07
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.83
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED JUNE 30, 1998 FOR J.P. MORGAN DIVERSIFIED FUND AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK>0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 008
<NAME> J.P. MORGAN DIVERSIFIED FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 227082
<RECEIVABLES> 118
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 227203
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 139
<TOTAL-LIABILITIES> 139
<SENIOR-EQUITY> 000
<PAID-IN-CAPITAL-COMMON> 196933
<SHARES-COMMON-STOCK> 15077
<SHARES-COMMON-PRIOR> 7330
<ACCUMULATED-NII-CURRENT> 124
<OVERDISTRIBUTION-NII> 000
<ACCUMULATED-NET-GAINS> 3583
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26424
<NET-ASSETS> 227064
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 4412
<EXPENSES-NET> 462
<NET-INVESTMENT-INCOME> 3950
<REALIZED-GAINS-CURRENT> 4691
<APPREC-INCREASE-CURRENT> 16433
<NET-CHANGE-FROM-OPS> 25075
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4766
<DISTRIBUTIONS-OF-GAINS> 3891
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11308
<NUMBER-OF-SHARES-REDEEMED> 1898
<SHARES-REINVESTED> 601
<NET-CHANGE-IN-ASSETS> 156726
<ACCUMULATED-NII-PRIOR> 109
<ACCUMULATED-GAINS-PRIOR> 169
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 518
<AVERAGE-NET-ASSETS> 140822
<PER-SHARE-NAV-BEGIN> 13.89
<PER-SHARE-NII> .33
<PER-SHARE-GAIN-APPREC> 2.03
<PER-SHARE-DIVIDEND> .53
<PER-SHARE-DISTRIBUTIONS> .66
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.06
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED JUNE 30, 1998 FOR J.P. MORGAN EUROPEAN EQUITY FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK>0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 014
<NAME> J.P. MORGAN EUROPEAN EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 17208
<RECEIVABLES> 51
<ASSETS-OTHER> 34
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17293
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31
<TOTAL-LIABILITIES> 31
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16051
<SHARES-COMMON-STOCK> 1045
<SHARES-COMMON-PRIOR> 362
<ACCUMULATED-NII-CURRENT> 116
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 160
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 935
<NET-ASSETS> 17262
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 142
<EXPENSES-NET> 26
<NET-INVESTMENT-INCOME> 116
<REALIZED-GAINS-CURRENT> 727
<APPREC-INCREASE-CURRENT> 806
<NET-CHANGE-FROM-OPS> 1649
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 880
<NUMBER-OF-SHARES-REDEEMED> 197
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12430
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (567)
<OVERDISTRIB-NII-PRIOR> 1
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 48
<AVERAGE-NET-ASSETS> 10620
<PER-SHARE-NAV-BEGIN> 13.35
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 3.06
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.52
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMERY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED JUNE 30, 1998 FOR J.P. MORGAN JAPAN EQUITY FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK>0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 016
<NAME> J.P. MORGAN JAPAN EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1210
<RECEIVABLES> 10
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1220
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17
<TOTAL-LIABILITIES> 17
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1619
<SHARES-COMMON-STOCK> 230
<SHARES-COMMON-PRIOR> 146
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 5
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 532
<ACCUM-APPREC-OR-DEPREC> 121
<NET-ASSETS> 1203
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> (1)
<REALIZED-GAINS-CURRENT> (345)
<APPREC-INCREASE-CURRENT> 319
<NET-CHANGE-FROM-OPS> (26)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 198
<NUMBER-OF-SHARES-REDEEMED> 114
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 412
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 4
<OVERDIST-NET-GAINS-PRIOR> 187
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 26
<AVERAGE-NET-ASSETS> 957
<PER-SHARE-NAV-BEGIN> 5.42
<PER-SHARE-NII> .00
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.24
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN INTERNATIONAL OPPORTUNITIES
FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 017
<NAME> J.P. MORGAN INTERNATIONAL OPPORTUNITIES FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 85299
<RECEIVABLES> 364
<ASSETS-OTHER> 169
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 85832
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 676
<TOTAL-LIABILITIES> 676
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79495
<SHARES-COMMON-STOCK> 7696
<SHARES-COMMON-PRIOR> 6345
<ACCUMULATED-NII-CURRENT> 521
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 953
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4187
<NET-ASSETS> 85156
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 671
<EXPENSES-NET> 155
<NET-INVESTMENT-INCOME> 516
<REALIZED-GAINS-CURRENT> 2061
<APPREC-INCREASE-CURRENT> 6443
<NET-CHANGE-FROM-OPS> 9020
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 441
<DISTRIBUTIONS-OF-GAINS> 14
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3602
<NUMBER-OF-SHARES-REDEEMED> 2292
<SHARES-REINVESTED> 41
<NET-CHANGE-IN-ASSETS> 22217
<ACCUMULATED-NII-PRIOR> 446
<ACCUMULATED-GAINS-PRIOR> (1095)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161
<AVERAGE-NET-ASSETS> 79715
<PER-SHARE-NAV-BEGIN> 9.92
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 1.16
<PER-SHARE-DIVIDEND> .07
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.07
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REPORT
ON FORM N-SAR DATED JUNE 30, 1998 FOR J.P. MORGAN EMERGING MARKETS DEBT FUND AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 018
<NAME> J.P. MORGAN EMERGING MARKETS DEBT FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 12233
<RECEIVABLES> 22
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12268
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55
<TOTAL-LIABILITIES> 55
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11667
<SHARES-COMMON-STOCK> 1332
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 6
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (243)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (549)
<NET-ASSETS> 12213
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 627
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 627
<REALIZED-GAINS-CURRENT> (981)
<APPREC-INCREASE-CURRENT> 86
<NET-CHANGE-FROM-OPS> (268)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 561
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 284
<NUMBER-OF-SHARES-REDEEMED> 234
<SHARES-REINVESTED> 55
<NET-CHANGE-IN-ASSETS> 235
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 57
<AVERAGE-NET-ASSETS> 13009
<PER-SHARE-NAV-BEGIN> 9.76
<PER-SHARE-NII> 0.47
<PER-SHARE-GAIN-APPREC> (0.64)
<PER-SHARE-DIVIDEND> 0.42
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.17
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES
FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 19
<NAME> J.P. MORGAN U.S. SMALL COMPANY OPPORTUNITIES FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 188579
<RECEIVABLES> 1133
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 189712
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 780
<TOTAL-LIABILITIES> 780
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 176896
<SHARES-COMMON-STOCK> 15035
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4517
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7519
<NET-ASSETS> 188932
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> (22)
<EXPENSES-NET> 348
<NET-INVESTMENT-INCOME> (370)
<REALIZED-GAINS-CURRENT> 4884
<APPREC-INCREASE-CURRENT> 7519
<NET-CHANGE-FROM-OPS> 12033
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17556
<NUMBER-OF-SHARES-REDEEMED> 2521
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 188932
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 404
<AVERAGE-NET-ASSETS> 103968
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 2.59
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.57
<EXPENSE-RATIO> 1.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON FORM
N-SAR DATED APRIL 30, 1998 FOR J.P. MORGAN GLOBAL STRATEGIC INCOME FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 20
<NAME> J.P. MORGAN GLOBAL STRATEGIC INCOME FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 11304
<RECEIVABLES> 71
<ASSETS-OTHER> 29
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11404
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 84
<TOTAL-LIABILITIES> 84
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11254
<SHARES-COMMON-STOCK> 1094
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 24
<ACCUM-APPREC-OR-DEPREC> 102
<NET-ASSETS> 11320
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 220
<EXPENSES-NET> 12
<NET-INVESTMENT-INCOME> 208
<REALIZED-GAINS-CURRENT> (24)
<APPREC-INCREASE-CURRENT> 102
<NET-CHANGE-FROM-OPS> 286
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 220
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1116
<NUMBER-OF-SHARES-REDEEMED> 37
<SHARES-REINVESTED> 15
<NET-CHANGE-IN-ASSETS> 11320
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 47
<AVERAGE-NET-ASSETS> 6290
<PER-SHARE-NAV-BEGIN> 10.21
<PER-SHARE-NII> .35
<PER-SHARE-GAIN-APPREC> .15
<PER-SHARE-DIVIDEND> .36
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.35
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE REPORT ON
FORM N-SAR DATED MAY 31, 1998 FOR J.P. MORGAN DISCIPLINED EQUITY FUND AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000894089
<NAME> J.P. MORGAN FUNDS
<SERIES>
<NUMBER> 21
<NAME> J.P. MORGAN DISCIPLINED EQUITY FUND
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 18029
<RECEIVABLES> 70
<ASSETS-OTHER> 9
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18108
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 71
<TOTAL-LIABILITIES> 71
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17603
<SHARES-COMMON-STOCK> 1207
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 14
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 74
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 346
<NET-ASSETS> 18037
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 37
<EXPENSES-NET> 16
<NET-INVESTMENT-INCOME> 21
<REALIZED-GAINS-CURRENT> 74
<APPREC-INCREASE-CURRENT> 346
<NET-CHANGE-FROM-OPS> 441
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1233
<NUMBER-OF-SHARES-REDEEMED> 26
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 18037
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 71
<AVERAGE-NET-ASSETS> 5235
<PER-SHARE-NAV-BEGIN> 12.98
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 1.96
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>