J.P. Morgan Funds
Supplement dated January 8, 1998 as applicable to the following Prospectuses:
JPM Pierpont Prime Money Market Fund, dated 2/28/97
JPM Pierpont Federal Money Market Fund, dated 2/28/97
JPM Pierpont Short Term Bond Fund, dated 2/28/97
JPM Pierpont Bond Fund, dated 2/28/97
JPM Pierpont Global Strategic Income Fund, dated 2/28/97
JPM Pierpont Emerging Markets Debt Fund, dated 9/2/97
JPM Pierpont New York Total Return Bond Fund, dated 7/14/97
JPM Pierpont International Equity Fund, dated 2/28/97
JPM Pierpont International Opportunities Fund, dated 8/4/97
JPM Pierpont Emerging Markets Equity Fund, dated 2/28/97
JPM Pierpont European Equity Fund, dated 4/30/97
JPM Pierpont Japan Equity Fund, dated 4/30/97
(Supersedes all supplements with respect to the above Funds dated prior to
January 8, 1998, except for the supplement dated December 12, 1997)
Fund Name Changes:
1. Effective January 1, 1998, the name of the Trust changed from "The JPM
Pierpont Funds" to "J.P. Morgan Funds" and each Fund's name changed as follows:
<TABLE>
<S> <C>
Old Name New Name
The JPM Pierpont Prime Money Market Fund J.P. Morgan Prime Money Market Fund
The JPM Pierpont Federal Money Market Fund J.P. Morgan Federal Money Market Fund
The JPM Pierpont Short Term Bond Fund J.P. Morgan Short Term Bond Fund
The JPM Pierpont Bond Fund J.P. Morgan Bond Fund
The JPM Pierpont Global Strategic Income Fund J.P. Morgan Global Strategic Income Fund
The JPM Pierpont Emerging Markets Debt Fund J.P. Morgan Emerging Markets Debt Fund
The JPM Pierpont New York Total Return Bond Fund J.P. Morgan New York Total Return Bond Fund
The JPM Pierpont International Equity Fund J.P. Morgan International Equity Fund
The JPM Pierpont International Opportunities Fund J.P. Morgan International Opportunities Fund
The JPM Pierpont Emerging Markets Equity Fund J.P. Morgan Emerging Markets Equity Fund
The JPM Pierpont European Equity Fund J.P. Morgan European Equity Fund
The JPM Pierpont Japan Equity Fund J.P. Morgan Japan Equity Fund
</TABLE>
Investment Policy Revisions - Federal Money Market Fund:
2. The first sentence in the paragraph above the heading "Treasury Securities;
Certain U.S. Government Agency Obligations" under "Investment Objective(s) and
Policies" in the Prospectus for the Federal Money Market Fund is revised as
follows:
The Portfolio seeks to achieve its investment objective by investing in
direct obligations of the U.S. Treasury and in obligations of certain U.S.
Government agencies described below.
3. The third, fourth and fifth sentences under the heading "Treasury Securities;
Certain U.S. Government Agency Obligations" in the Prospectus for the Federal
Money Market Fund are revised as follows:
During ordinary market conditions substantially all of the Portfolio's net
assets will be invested in Treasury Securities and obligations issued by U.S.
Government agencies, that are generally exempt from state and local income
taxes, where the Portfolio must look to the issuing agency for ultimate
repayment, including the Federal Farm Credit System, the Federal Home Loan
Banks, the Tennessee Valley Authority and the Student Loan Marketing Association
("Permitted Agency Securities"). Each such obligation must have a remaining
maturity of 397 days or less at the time of purchase by the Portfolio.
4. The second to last sentence under the heading "Treasury Securities; Certain
U.S. Government Agency Obligations" in the Prospectus for the Federal Money
Market Fund is revised as follows:
The Portfolio also may purchase Treasury Securities and Permitted
Agency Securities on a when-issued or delayed delivery basis and, although it
has no current intention to do so, may engage in repurchase and reverse
repurchase agreement transactions involving such securities.
5. The first sentence under the heading "Repurchase Agreements" in the
Prospectus for the Federal Money Market Fund is revised as follows:
The Portfolio may, although it has no current intention to do so,
engage in repurchase agreements with brokers, dealers or banks that meet the
credit guidelines established by the Portfolio's Trustees.
6. The third sentence under the heading "Repurchase Agreements" in the
Prospectus for the Federal Money Market Fund is revised as follows:
The Portfolio may only enter into repurchase agreements involving
Treasury Securities and Permitted Agency Securities.
7. The second sentence of the seventh paragraph under the heading "Investment
Objective and Policies" in the Prospectus for the International Equity Fund is
replaced with the following:
Through the use of forward foreign currency exchange contracts, the
Advisor will adjust the Portfolio's foreign currency weightings relative to the
EAFE Index. In addition, from time to time, the Advisor may reduce the
Portfolio's foreign currency exposure by entering into forward foreign currency
exchange contracts to sell a foreign currency in exchange for the U.S. dollar.
8. The following is added after the second sentence of the second paragraph
under the heading "Foreign Currency Exchange Transactions" in the Prospectuses
for the International Equity and Emerging Markets Equity Funds:
These contracts are derivative instruments, as their value derives from
the spot exchange rates of the currencies underlying the contracts.
9. The sentence "The Portfolio will not enter into forward contracts for
speculative purposes." in the above paragraph is deleted in the Prospectuses for
the Bond, Short Term, International Equity and Emerging Markets Equity Funds.
10. The third paragraph under the heading "Foreign Currency Exchange
Transactions" in the Prospectus for the International Equity Fund is replaced
with the following:
The Portfolio may enter into forward foreign currency exchange
contracts to adjust its currency exposure relative to its benchmark, the EAFE
Index. The Portfolio may also enter into forward foreign currency exchange
contracts in connection with settlements of securities transactions and other
anticipated payments or receipts. In addition, from time to time, the Advisor
may reduce the Portfolio's foreign currency exposure by entering into forward
foreign currency exchange contracts to sell a foreign currency in exchange for
the U.S. dollar. Forward foreign currency exchange contracts may involve the
purchase or sale of a foreign currency in exchange for U.S.
dollars or may involve two foreign currencies.
11. The third paragraph under the heading "Foreign Currency Exchange
Transactions" in the Prospectus for the Emerging Markets Equity Fund is replaced
with the following:
The Portfolio may enter into forward foreign currency exchange contracts in
connection with settlements of securities transactions and other anticipated
payments or receipts. In addition, from time to time, the Advisor may reduce the
Portfolio's foreign currency exposure by entering into forward foreign currency
exchange contracts to sell a foreign currency in exchange for the U.S. dollar.
The Portfolio may also enter into forward foreign currency exchange contracts to
adjust its currency exposure relative to its benchmark, the MSCI Emerging
Markets Free Index. Forward foreign currency exchange contracts may involve the
purchase or sale of a foreign currency in exchange for U.S.
dollars or may involve two foreign currencies.
Money Market Funds: Cut-Off Times for Purchases and Redemptions:
12. Cut-Off Times for Purchases and Redemptions:
The Prime Money Market and Federal Money Market Funds have extended their
cut-off times for receiving purchase and redemption orders for Fund shares. The
new cut-off times for purchase and redemption orders and for receipt of
immediately available funds are as follows:
<TABLE>
<S> <C> <C>
Deadline for Receipt of
Deadline for Purchase Immediately Available Funds
and Redemption Orders by the Fund
Prime Money Market 5:00 pm 5:00 pm
Federal Money Market 2:00 pm 4:00 pm
</TABLE>
Purchase orders and immediately available funds must be received by the above
times on a Fund business day for the purchase to be effective and dividends to
be earned on the same day. The net asset value for the Prime Money Market Fund
will now be calculated at 5:00 pm.
Money Market Funds: Short-Term Gains:
13. The second paragraph under the caption "Dividends and Distributions" in the
Prospectuses for the Prime Money Market and Federal Money Market Funds is
replaced with the following:
Net short-term capital gains, if any, will be distributed in accordance with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and
may be reflected in the Fund's daily dividends. Substantially all the realized
net long-term capital gains, if any, of the Fund are declared and paid on an
annual basis, except that an additional capital gains distribution may be made
in a given year to the extent necessary to avoid the imposition of federal
excise tax on the Fund.
Other Changes:
14. The following is added after the first sentence of the third paragraph under
the caption "Investment Objective and Policies" in the Prospectuses for the
Prime Money Market and Federal Money Market Funds:
The market value of obligations in which the Portfolio invests is not guaranteed
and may rise and fall in response to changes in interest rates.
15. The fifth sentence under the heading "Advisor" in the Prospectuses for the
Federal Money Market, Prime Money Market, Short Term Bond, Bond, International
Equity and Emerging Markets Equity Funds is revised as follows:
Through offices in New York City and abroad, J.P. Morgan, through the Advisor
and other subsidiaries, offers a wide range of services to governmental,
institutional, corporate and individual customers and acts as investment adviser
to individual and institutional clients with combined assets under management of
over $240 billion.
16. The third sentence of the first paragraph under the heading "Organization"
is restated in the Prospectuses for the Prime Money Market, Federal Money
Market, Bond, Short Term Bond, International Equity and Emerging Markets Equity
Funds as follows:
To date, shares of 19 series have been authorized and are available for sale to
the public.
Global Strategic Income Fund Expense Information:
17. The Expense Table and Example which appear on page 1 of the prospectus
are replaced with the following:
Expense Table
Annual Operating Expenses(2)
Advisory Fees..............................................................0.45%
Rule 12b-1 Fees............................................................None
Other Expenses (after expense reimbursement) ..............................0.55%
Total Operating Expenses (after expense reimbursement) ....................1.00%
(2) These expenses are based on the Fund's estimated expenses and estimated
average net assets for its fiscal year ending October 31, 1998. Morgan, however,
has agreed to limit Total Operating Expenses to 1.00% of average net assets
through February 28, 1999. See Management of the Fund and Portfolio--Expenses.
Without such reimbursement, the estimated Other Expenses and Total Operating
Expenses would be 0.58% and 1.03%, respectively, on an annualized basis.
Example
An investor would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
1 Year...............................................$ 10
3 Years..............................................$ 32
Additionally, the second paragraph under Expenses on page 14 is replaced with
the following:
Morgan has agreed that it will, at least through February 28, 1999, maintain the
Fund's total operating expenses (which include expenses of the Fund and the
Portfolio) at the annual rate of 1.00% of the Fund's average daily net assets.
This expense limitation does not cover extraordinary expenses during the period.
There is no assurance that Morgan will continue this expense limitation beyond
the specified period.
Investment Minimums
18.......The following is applicable to each Fund referenced above:
The required minimum initial investment in the Fund is $2,500. The minimum
subsequent investment is $500. Please refer to "Purchase of Shares" for more
information.
International Opportunities Expense Information:
19.......The following replaces "ANNUAL OPERATING EXPENSES" and the
corresponding footnote on page 1 of the prospectus:
ANNUAL OPERATING EXPENSES(2)
Advisory Fees 0.60%
Rule 12b-1 Fees None
Other Expenses (after expense reimbursement) 0.60%
Total Operating Expenses (after expense reimbursement) 1.20%
=====
- ------------------------
(2) These expenses are expressed as a percentage of average net assets for the
Fund after expense reimbursement for the period indicated in Financial
Highlights below. Morgan has agreed to limit Total Operating Expenses to
1.20% of average net assets through March 31, 1998. See Management of the
Fund and Portfolio--Expenses. Without such reimbursement, Other Expenses and
Total Operating Expenses for the period indicated in Financial Highlights
below would have been 1.03% and 1.63%, respectively, on an annualized basis.
JPMSUPP-981
