<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MOODY'S/S&P
AMOUNT SECURITY DESCRIPTION RATING VALUE
- ----------- ------------------------------------------------- ------------ ------------
<C> <S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS AND ASSET BACKED SECURITIES (36.6%)
FINANCIAL SERVICES (36.6%)
$ 417,842 Aegis Auto Receivables Trust, Series 1996-3,
Class A, Sequential Payer, Callable, (144A),
8.80% due 03/20/02............................. NR/NR $ 418,626
517,542 CIT River Owners Trust, Series 1995-A, Class A,
Sequential Payer, Callable, 6.25% due
01/15/11....................................... Aaa/AAA 514,049
700,000 First Plus Home Loan Trust, Series 1996-3, Class
A2, Sequential Payer, Callable, 6.85% due
06/20/07....................................... Aaa/AAA 698,999
473,543 Fleetwood Credit Corp. Grantor Trust, Series
1994-A, Class A, Sequential Payer, Callable,
4.70% due 07/15/09............................. Aaa/AAA 458,897
1,500,000 Ford Credit Auto Owner Trust, Series 1996-4,
Sequential Payer, Callable, 6.50% due
11/15/99....................................... Aaa/AAA 1,507,005
1,450,000 Green Tree Financial Corp., Series 1996-3, Class
A2, Sequential Payer, Callable, 6.45% due
05/15/27....................................... Aaa/AAA 1,446,984
1,500,000 Green Tree Home Improvement Loan Trust, Series
1996-D, Class HIA2, Sequential Payer, Callable,
6.80% due 09/15/27............................. NR/AAA 1,494,840
331,582 Merrill Lynch Mortgage Investors, Inc., Remic
Series 1994-C1, Class A, Callable, 8.61% due
11/25/20(c).................................... NR/AAA 333,550
299,576 Merrill Lynch Mortgage Investors, Inc., Series
95-C2, Class E, 7.98% due 06/15/21(c).......... Ba3/NR 295,410
1,500,000 Metropolitan Asset Funding Inc., Callable, 6.85%
due 08/20/05................................... Aaa/NR 1,487,812
390,303 Newcourt Receivables Asset Trust, Series 1996-1,
Class A, Sequential Payer, Callable, 6.79% due
08/20/03....................................... NR/AAA 391,318
602,690 Newcourt Receivables Asset Trust, Series 1996-3,
Class A, Sequential Payer, Callable, 6.24% due
12/20/04....................................... NR/AAA 599,959
596,897 Prudential Home Mortgage Securities, Remic:
Sequential Payer, Series 1992-44, Class A1,
Callable, 6.00% due 01/25/98................... Aaa/NR 594,199
1,000,000 Salomon Brothers Mortgage Securities VII Inc.,
Series 97-HUD1, Class A1, Seqential Payer,
Callable, 6.97% due 12/25/30................... Aaa/NR 996,875
447,490 Summit Acceptance Auto Receivables, Series
1996-A, Class A-1, (144A), 7.01% due
07/15/02....................................... Aaa/AAA 450,497
500,000 World Omni Automobile Lease Securitization Trust,
Series 1996-B, Class A1, 5.95% due 11/15/02.... Aaa/AAA 500,570
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS AND
ASSET BACKED SECURITIES (COST
$12,253,676)............................... 12,189,590
------------
CORPORATE OBLIGATIONS (24.2%)
ELECTRIC (3.1%)
1,000,000 Hydro Quebec, 9.75% due 09/29/98................. NR/A+ 1,040,000
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
17
<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MOODY'S/S&P
AMOUNT SECURITY DESCRIPTION RATING VALUE
- ----------- ------------------------------------------------- ------------ ------------
<C> <S> <C> <C>
FINANCIAL SERVICES (5.7%)
$ 300,000 Cheung Kong Finance Cayman, 5.50% due 09/30/98... NR/NR $ 293,625
1,500,000 Toyota Motor Credit Corp., 9.75% due
03/09/98(c).................................... Aaa/AAA 1,591,875
------------
1,885,500
------------
OIL-SERVICES (7.4%)
1,500,000 Columbia Gas System Inc., 6.39% due 11/28/00..... Baa1/BBB+ 1,476,090
1,000,000 Occidental Petroleum Corp., 5.76% due 06/15/98... Baa2/BBB 992,840
------------
2,468,930
------------
TELECOMMUNICATIONS (0.5%)
200,000 MFS Communications, 9.375% due 01/15/04(d)....... Ba3/BBB- 180,500
------------
TELEPHONE (3.0%)
1,000,000 Southwestern Bell Cap, 7.30% due 07/15/99........ A2/AA- 1,013,940
------------
UTILITIES (4.5%)
1,500,000 Boston Edison Co., 5.95% due 03/15/98............ Baa2/BBB 1,493,790
------------
TOTAL CORPORATE OBLIGATIONS (COST
$8,089,750)................................ 8,082,660
------------
FOREIGN CORPORATE OBLIGATIONS (1.3%)
CANADA (0.6%)
Forest Products & Paper
200,000 Canadian Pacific Forest Products Ltd., 9.25%
due 06/15/02.................................. Ba1/NR 206,582
------------
MEXICO (0.7%)
Gas Exploration
250,000 Petroleos Mexicanos, 7.60% due 06/15/00........ Ba2/NR 245,605
------------
TOTAL FOREIGN CORPORATE OBLIGATIONS (COST
$449,212).................................. 452,187
------------
SOVEREIGN BONDS (1.5%)
MEXICO (1.5%)
485,000 United Mexican States, (144A), 7.625% due
08/06/01(c) (cost $491,305).................... Baa3/BBB- 491,063
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
18
<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (16.6%)
FEDERAL HOME LOAN MORTGAGE CORP.
$ 220,320 PC, 9.00% due 05/01/97........................... $ 220,320
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
54,657 8.00% due 12/01/07............................... 55,828
600,568 8.00% due 12/01/09............................... 613,852
271,455 8.00% due 12/01/09............................... 277,406
496,005 8.00% due 05/01/10............................... 506,932
------------
1,454,018
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
482,674 7.00% due 03/15/09............................... 510,074
469,452 7.00% due 07/15/09............................... 467,137
517,906 9.00% due 12/15/16............................... 515,050
714,563 9.00% due 12/15/26............................... 761,410
1,500,000 GNMA TBA 9%...................................... 1,597,230
------------
3,850,901
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $5,572,071)........................... 5,525,239
------------
U.S. TREASURY OBLIGATIONS (12.1%)
U.S. TREASURY NOTES
1,700,000 5.875% due 11/15/99(a)(b)........................ 1,679,719
650,000 6.625% due 06/30/01(a)........................... 651,963
1,670,000 7.875% due 04/15/98(a)(b)........................ 1,699,659
------------
4,031,341
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST
$4,042,425)................................. 4,031,341
------------
SHORT-TERM INVESTMENTS (13.0%)
OTHER INVESTMENT COMPANIES (0.0%)*
340 Seven Seas Money Market Fund..................... 340
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
19
<PAGE>
THE SHORT TERM BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SECURITY DESCRIPTION VALUE
- ----------- ------------------------------------------------- ------------
<C> <S> <C>
REPURCHASE AGREEMENT (13.0%)
$ 4,338,000 Goldman Sachs Repurchase Agreement, dated 4/30/97
due 5/01/97, proceeds $4,338,645,
(collateralized by $3,010,000 U.S. Treasury
Note, 6.96% due 11/15/09, valued at $1,258,854;
$809,000 U.S. Treasury Note, 6.53% due
11/15/01, valued at $601,917; $853,000 U.S.
Treasury Note, 5.25% due 8/15/97, valued at
$839,746; $530,000 U.S. Treasury Note, 6.17%
due 11/15/98, valued at $482,254; $5,262,000
U.S. Treasury Note, 7.15% due 8/15/17, valued
at $1,242,153)................................. $ 4,338,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST
$4,338,340)................................. 4,338,340
------------
TOTAL INVESTMENTS (COST $35,236,779) (105.3%).... 35,110,420
LIABILITIES IN EXCESS OF OTHER ASSETS (-5.3%).... (1,772,361)
------------
NET ASSETS (100.0%).............................. $ 33,338,059
------------
------------
</TABLE>
- ------------------------------
Note: Based on the cost of investments of $35,236,779 for federal income tax
purposes at April 30, 1997, the aggregate gross unrealized appreciation and
depreciation was $50,937 and $(177,296), respectively, resulting in net
unrealized appreciation of $(126,359).
* Less than 0.1%.
TBA -- Security purchased on a forward commitment basis with an appropriate
amount and no definitive date. The actual principal anount and maturity date
will be determined upon settlement date.
144A -- Securities restricted for resale to Qualified Institutional Buyers.
(a) Total of $1,700,000 par segregated as collateral for initial margin on
futures contracts.
(b) $2,200,000 par segregated as collateral on TBA.
(c) Floating rate note.
(d) Step bond.
The Accompanying Notes are an Integral Part of the Financial Statements.
20
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $35,236,779 ) $35,110,420
Interest Receivable 343,652
Receivable for Expense Reimbursement 7,888
Deferred Organization Expenses 1,622
-----------
Total Assets 35,463,582
-----------
LIABILITIES
Payable for Investments Purchased 2,092,220
Advisory Fee Payable 6,448
Payable to Custodian 5,099
Custody Fee Payable 1,387
Administrative Services Fee Payable 802
Administration Fee Payable 156
Fund Services Fee Payable 19
Accrued Trustees' Fees and Expenses 32
Accrued Expenses 19,360
-----------
Total Liabilities 2,125,523
-----------
NET ASSETS
Applicable to Investors' Beneficial Interests $33,338,059
-----------
-----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
21
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest Income $1,144,081
EXPENSES
Advisory Fee $ 44,934
Custodian Fees and Expenses 17,290
Professional Fees and Expenses 16,287
Administrative Services Fee 5,660
Printing Expenses 3,893
Amortization of Organization Expense 678
Fund Services Fee 641
Administration Fee 454
Registration Fees 255
Trustees' Fees and Expenses 119
Miscellaneous 312
--------
Total Expenses 90,523
Less: Reimbursement of Expenses (45,587)
--------
NET EXPENSES 44,936
----------
NET INVESTMENT INCOME 1,099,145
NET REALIZED GAIN ON INVESTMENTS 44,118
NET CHANGE IN UNREALIZED DEPRECIATION OF
INVESTMENTS (including $560 net unrealized
losses from futures contracts) (312,095)
----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 831,168
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
22
<PAGE>
THE SHORT TERM BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE FISCAL
1997 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1996
------------ ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 1,099,145 $ 1,136,925
Net Realized Gain on Investments 44,118 146,407
Net Change in Unrealized Appreciation
(Depreciation) of Investments (312,095) 5,083
------------ ----------------
Net Increase in Net Assets Resulting from
Operations 831,168 1,288,415
------------ ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 19,338,867 54,341,812
Withdrawals (12,864,087) (58,904,692)
------------ ----------------
Net Increase (Decrease) from Investors'
Transactions 6,474,780 (4,562,880)
------------ ----------------
Total Increase (Decrease) in Net Assets 7,305,948 (3,274,465)
NET ASSETS
Beginning of Period 26,032,111 29,306,576
------------ ----------------
End of Period $ 33,338,059 $ 26,032,111
------------ ----------------
------------ ----------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FISCAL FOR THE PERIOD
FOR THE YEAR JULY 8, 1993
SIX MONTHS ENDED ENDED OCTOBER 31, (COMMENCEMENT OF
APRIL 30, 1997 ------------------ OPERATIONS) TO
(UNAUDITED) 1996 1995 1994 OCTOBER 31, 1993
---------------- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 0.25% 0.38% 0.42% 0.36% 0.37%(a)
Net Investment Income 6.11% 5.65% 6.11% 5.01% 3.99%(a)
Decrease Reflected in Expense Ratio due to
Expense Reimbursement 0.25% 0.23% 0.04% 0.05% 1.00%(a)
Portfolio Turnover 131% 191% 177% 230% 116%
</TABLE>
- ------------------------
(a) Annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
23
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Short Term Bond Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a no-load, open-end
management investment company which was organized as a trust under the laws of
the State of New York. The Portfolio commenced operations on July 8, 1993. The
Portfolio's investment objective is to provide a high total return while
attempting to limit the likelihood of negative quarterly returns. The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio.
Investments in emerging markets may involve certain considerations and risks not
typically associated with investments in the United States. Future economic and
political developments in emerging market countries could adversely affect the
liquidity or value, or both, of such securities in which the Portfolio is
invested. The ability of the issuers of debt securities held by the Portfolio to
meet their obligations may be affected by economic and political developments in
a specific industry or region.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual amounts could differ from
those estimates. The following is a summary of the significant accounting
policies of the Portfolio:
a)The Portfolio values mortgage and asset-backed securities and other debt
securities with a maturity of 60 days or more, including securities that
are listed on an exchange or traded over the counter, using prices
supplied daily by an independent pricing service or services that (i) are
based on the last sale price on a national securities exchange, or in the
absence of recorded sales, at the readily available bid price on such
exchange or at the quoted bid price in the over-the-counter market, if
such exchange or market constitutes the broadest and most representative
market for the security and (ii) in other cases, take into account various
factors affecting market value, including yields and prices of comparable
securities, indications as to value from dealers and general market
conditions. If such prices are not supplied by the Portfolio's independent
pricing services, such securities are priced in accordance with procedures
adopted by the Trustees. All short term portfolio securities with a
remaining maturity of less than 60 days are valued by the amortized cost
method. The ability of issuers of mortgage and asset-backed securities,
held by the Portfolio, to meet their obligations may be affected by
economic developments in a specific industry or region. The value of
mortgage and asset-backed securities can be significantly affected by
changes in interest rates or rapid principal repayments including
pre-payments.
The Portfolio's custodian or designated subcustodians, as the case may be,
under triparty repurchase agreements takes possession of the collateral
pledged for investments in repurchase agreements on behalf of the
Portfolio. It is the policy of the Portfolio to value the underlying
collateral daily on a mark-to-market basis to determine that the value,
including accrued interest, is at least equal to the repurchase price plus
accrued interest. In the event of default of the obligation to repurchase,
the Portfolio has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances,
in the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
24
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
b)Securities transactions are recorded on a trade date basis. Interest
income, which includes the amortization of premiums and discounts, if any,
is recorded on an accrual basis. For financial and tax reporting purposes,
realized gains and losses are determined on the basis of specific lot
identification.
c)Futures: A futures contract is an agreement to purchase/sell a specified
quantity of an underlying instrument at a specified future date or to
make/receive a cash payment based on the value of a securities index. The
price at which the purchase and sale will take place will be fixed when
the Portfolio enters in the contract. Upon entering into such a contract
the Portfolio is required to pledge to the broker an amount of cash and/or
liquid securities equal to the minimum "initial margin" requirements of
the exchange. Pursuant to the contract, the Portfolio agrees to receive
from, or pay to, the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as "variation margin" and are recorded by the Portfolio as unrealized
gains or losses. When the contract is closed, the Portfolio records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time when it was
closed. The Portfolio invests in futures contracts for the purpose of
hedging its existing portfolio securities, or securities the Portfolio
intends to purchase, against fluctuations in value caused by changes in
prevailing market interest rates or securities movements. The use of
futures transactions involves the risk of imperfect correlation of
movements in the price of futures contracts, interest rates and the
underlying hedged assets, and the possible inability of counterparties to
meet the terms of their contracts. Futures transactions during the six
months ended April 30, 1997 are summarized as follows:
SUMMARY OF OPEN FUTURES CONTRACTS
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NUMBER OF CONTRACTS OF CONTRACTS
------------------- ----------------
<S> <C> <C>
Contracts opened................................. 8 $ 1,643,940
------------------- ----------------
Contracts open at end of period.................. 8 $ 1,643,940
------------------- ----------------
------------------- ----------------
</TABLE>
SUMMARY OF OPEN CONTRACTS AT APRIL 30, 1997
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION/
CONTRACTS LONG (DEPRECIATION)
-------------- --------------
<S> <C> <C>
Two-Year U.S. Treasury, expiring June 1997....... 8 $ (560)
-------------- --------------
Totals........................................... 8 $ (560)
-------------- --------------
-------------- --------------
</TABLE>
d)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be subject to
taxation on its share of the Portfolio's ordinary income and capital
gains. It is intended that the Portfolio's assets will be managed in such
a way that an investor in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code.
e)The Portfolio incurred organization expenses in the amount of $5,380.
These costs were deferred and are being amortized on a straight-line basis
over a five-year period from the commencement of operations.
25
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an Investment Advisory Agreement with Morgan Guaranty
Trust Company of New York ("Morgan"). Under the terms of the agreement,
the Portfolio pays Morgan at an annual rate of 0.25% of the Portfolio's
average daily net assets. For the six months ended April 30, 1997, this
fee amounted to $44,934.
b)The Portfolio has retained Funds Distributor, Inc. ("FDI"), a registered
broker-dealer, to serve as the co-administrator and exclusive placement
agent. Under a Co-Administration Agreement between FDI and the Portfolio,
FDI provides administrative services necessary for the operations of the
Portfolio, furnishes office space and facilities required for conducting
the business of the Portfolio and pays the compensation of the officers
affiliated with FDI. The Portfolio has 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 amount allocable to the Portfolio is based on
the ratio of the Portfolio's net assets to the aggregate net assets of The
JPM Pierpont Funds, The JPM Institutional Funds, The JPM Advisor Funds,
the Portfolio and the other portfolios (the "Master Portfolios") in which
The JPM Pierpont Funds and The JPM Institutional Funds invest, JPM Series
Trust and JPM Series Trust II. For the six months ended April 30, 1997,
the fee for theses services amounted to $454.
On November 15, 1996, The JPM Advisor Funds terminated operations and were
liquidated. Subsequent to that date, the net assets of The JPM Advisor
Funds were no longer included in the calculation of the allocation of
FDI's fees.
c)The Portfolio has an Administrative Services Agreement (the "Services
Agreement") with Morgan under which Morgan is responsible for overseeing
certain aspects of the administration and operation of the Portfolio.
Under the Services Agreement, the Portfolio has agreed to pay Morgan a fee
equal to its allocable share of an annual complex-wide charge. This charge
is calculated daily based on the aggregate net assets of the Master
Portfolios and JPM Series Trust in accordance with the following annual
schedule: 0.09% on 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 Portfolio is determined by the proportionate
share that the net assets bear to the net assets of the Master Portfolios,
investors in the Master Portfolios for which Morgan provides similar
services, The JPM Pierpont Funds, The JPM Institutional Funds and JPM
Series Trust. For the six months ended April 30, 1997, the fee for these
services amounted to $5,660.
In addition, Morgan has agreed to reimburse the Portfolio to the extent
necessary to maintain the total operating expenses of the Portfolio at no
more than 0.25% of the average daily net assets of the Portfolio through
February 28, 1998. For the six months ended April 30, 1997, Morgan has
agreed to reimburse the Portfolio $45,587 for expenses under this
agreement.
d)The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall supervisory
responsibilities for the Portfolio's affairs. The Trustees of the
Portfolio represent all the existing shareholders of Group. The
Portfolio's allocated portion of Group's costs in performing its services
amounted to $641 for the six months ended April 30, 1997.
26
<PAGE>
THE SHORT TERM BOND PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1997
- --------------------------------------------------------------------------------
e)An aggregate annual fee of $75,000 is paid to each Trustee for serving as
a Trustee of The JPM Pierpont Funds, The JPM Institutional Funds, the
Master Portfolios and JPM Series Trust. The Trustees' Fees and Expenses
shown in the financial statements represents the Portfolio's allocated
portion of the total fees and expenses. Prior to April 1, 1997, the
aggregate annual Trustee Fee was $65,000. The Portfolio's Chairman and
Chief Executive Officer also serves as Chairman of Group and receives
compensation and employee benefits from Group in his role as Group's
Chairman. The allocated portion of such compensation and benefits included
in the Fund Services Fee shown in the financial statements was $130.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the period were
as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- -----------
<S> <C> <C>
U.S. Government and Agency Obligations........... $31,837,558 $32,080,606
Corporate and Collateralized Mortgage
Obligations..................................... 20,122,080 12,902,190
----------- -----------
$51,959,638 $44,982,796
----------- -----------
----------- -----------
</TABLE>
27
