JPM SERIES TRUST II, 497, 1997-01-15

JPM SERIES TRUST II
497, 1997-01-15

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Rule 497(c)
Reg. No. 33-72834

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PROSPECTUS
JPM Series Trust II
JPM Treasury Money Market Portfolio
60 State Street
Boston, Massachusetts 02109
1-800-221-7930

JPM Treasury Money Market Portfolio (the "Portfolio") is a separate diversified
portfolio of JPM Series Trust II, an open-end management investment company
organized as a Delaware Business Trust (the "Trust"). The Portfolio seeks to
provide current income, maintain a high level of liquidity and preserve capital.

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

Shares of the Portfolio presently are offered only to variable annuity and
variable life insurance separate accounts established by insurance companies to
fund variable annuity contracts and variable life insurance policies and
qualified pension and retirement plans outside the separate account context. For
offers to separate accounts, this Prospectus should be read in conjunction with
the prospectus of the separate accounts of the specific insurance product which
should precede or accompany this Prospectus.

This Prospectus sets forth concisely information about the Trust and the
Portfolio that a prospective investor should know before investing. This
Prospectus should be retained for future reference. A Statement of Additional
Information for the Trust, dated January 1, 1997 (as supplemented from time to
time), has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request from the Trust's Distributor,
Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts
02109, Attention: JPM Series Trust II, or by calling 1-800-221-7930. Inquiries
about the Trust should be directed to the Trust at the same address or telephone
number.

AN INVESTMENT IN THE PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE UNITED
STATES GOVERNMENT. INVESTMENTS IN THE PORTFOLIO ARE NOT BANK DEPOSITS AND ARE
NOT INSURED BY, GUARANTEED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE
FDIC OR ANY BANK. AN INVESTMENT IN THE PORTFOLIO 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.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<CAPTION>
PAGE
<S> <C>
Repurchase Agreements........................... 4
Loans of Portfolio Securities................... 5
Reverse Repurchase Agreements................... 5
Illiquid Investments, Privately Placed and Other
Unregistered Securities........................ 5
Investment Restrictions........................... 5
Management of the Trust and Portfolio............. 6
Capital Shares.................................... 8
Taxes and Dividends............................... 8
Offering and Redemption of Shares................. 9
Other Information................................. 10
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH SUCH OFFERING
MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THE PROSPECTUS.
<PAGE>
ANNUAL OPERATING EXPENSES
(as a percentage of average daily net assets)

<TABLE>
<S> <C>
Management Fees...................................................................... .20%
Other Expenses....................................................................... .40%
---------
Total Portfolio Operating Expenses................................................... .60%
</TABLE>

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................................................................ $ 6
3 Years............................................................... $19
5 Years............................................................... $33
10 Years.............................................................. $75

THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF
PAST OR FUTURE EXPENSES OF THE PORTFOLIO AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE PORTFOLIO'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by the Portfolio, the payment of which will reduce
investors' annual return. The information in the foregoing table has been
restated to reflect an agreement by Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), an affiliate of Morgan, to reimburse the Trust to the
extent certain expenses exceed in any fiscal year .60% of the Portfolio's
average daily net assets. The information in the foregoing table does not
reflect deduction of account fees and charges to separate accounts or related
insurance policies that may be imposed by participating insurance companies. For
a further description of the various costs and expenses incurred in the
operation of the Portfolio, as well as expense reimbursement or waiver
arrangements, see "Management of the Trust and Portfolio."

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FINANCIAL HIGHLIGHTS

The following table includes selected data for a share of capital stock
outstanding for the Portfolio throughout the period from January 3, 1995
(commencement of operations) to December 31, 1995 (audited) and the six month
period ended June 30, 1996 (unaudited).(1) The related financial statements and
report of Ernst & Young LLP, independent auditors, for the period ended December
31, 1995 are incorporated by reference into the Statement of Additional
Information and are available upon request and without charge by calling
1-800-221-7930.

<TABLE>
<CAPTION>
Six Month
January 3, 1995 Period Ended
through December June 30, 1996
31, 1995 (Unaudited)
----------------- -------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 10.00 $ 10.06
----------------- -------------
Income From Investment Operations
Net investment income..................................... 0.45 0.22
Net realized and unrealized gains (losses) on securities &
foreign currency......................................... 0.06 0.01
----------------- -------------
Total from investment operations........................ 0.51 0.23
----------------- -------------
Less Distributions to Shareholders
Dividends from net investment income...................... (0.45)
----------------- -------------
Total distributions......................................... (0.45) 0.00
----------------- -------------
Net asset value, end of period.............................. $ 10.06 $ 10.29
----------------- -------------
----------------- -------------
Total Return(2)............................................. 5.09% 2.25%
----------------- -------------
----------------- -------------
Ratios to average net assets:
(Annualized)
Expenses(3)............................................... 0.60% 0.60%
Net investment income..................................... 4.95% 4.56%
Portfolio turnover rate..................................... N/A N/A
Average commission rate paid................................ N/A N/A
Net assets, at end of period................................ $1,272,932 $1,283,398
</TABLE>

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(1) From January 3, 1995 (commencement of operations) to December 31, 1996,
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a
wholly-owned subsidiary of Chubb Life Insurance Company of America ("Chubb
Life"), served as the Portfolio's investment manager, and Morgan Guaranty served
as the Portfolio's sub-investment adviser. Effective January 1, 1997, Morgan
began serving as the Portfolio's investment adviser. See "OTHER INFORMATION".
(2) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges to separate accounts or
related insurance policies, which, if reflected, would reduce the Portfolio's
total return for the period indicated. Investment returns and principal values
will fluctuate and shares, when redeemed, may be worth more or less than their
original cost. Total returns for periods of less than one year have not been
annualized.
(3) All related party fees have been waived and all other expenses of the
Portfolio have been assumed in part for 1996 and 1995 by Chubb Life and Morgan
Guaranty. Had the fees not been waived and expenses not been assumed, the ratios
of the Portfolio's expenses to average net assets would have been 2.28% in 1996
and 2.77% in 1995.

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YIELD INFORMATION

From time to time the Trust may advertise the Portfolio's yield, which
represents the Portfolio's investment income, less expenses, expressed as a
percentage of assets on an annualized basis for a seven-day period. The yield is
expressed as both a simple annualized yield and a compounded effective yield.
These figures are based on historical earnings and are not intended to indicate
future performance. Portfolio shares presently are offered only to variable
annuity and variable life insurance separate accounts established by affiliated
and unaffiliated life insurance companies ("Participating Insurance Companies")
to fund variable annuity contracts ("VA contracts") and variable life insurance
policies ("VLI policies" and, together with VA contracts, "Policies") and
qualified pension and retirement plans outside the separate account context.
None of these performance figures reflect fees and charges imposed by
Participating Insurance Companies, which fees and charges will reduce the yield
and total return to Policy owners; therefore, these performance figures may be
of limited use for comparative purposes. Policy owners should consult the
prospectus for such Policy.

THE PORTFOLIO

The Portfolio is offered as a funding vehicle for Policies to be offered by the
Participating Insurance Companies. The Policies are described in the separate
prospectuses and statements of additional information issued by the
Participating Insurance Companies over which the Trust assumes no
responsibility. Portfolio shares also are offered to qualified pension and
retirement plans outside of the separate account context (including, without
limitation, those trusts, plans, accounts, contracts or annuities described in
Sections 401(a), 403(a), 403(b), 408(a), 408(b), 408(k), 414(d), 457(b),
501(c)(18) of the Internal Revenue Code of 1986, as amended (the "Code"), and
any other trust, plan, account, contract or annuity that is determined to be
within the scope of Treasury Regulation Section1.817.5(f)(3)(iii)) ("Eligible
Plans" or "Plans"). Differences in tax treatment or other considerations may
cause the interests of Policy owners and Eligible Plan participants to conflict,
although the Trust currently does not foresee any disadvantages to Policy owners
or Eligible Plan participants arising therefrom. Nevertheless, the Trust's Board
of Trustees (the "Board") intends to monitor events in order to identify any
material conflicts which may arise and to determine what action, if any, should
be taken in response thereto.

The Trust currently consists of five portfolios: JPM Treasury Money Market
Portfolio, JPM Bond Portfolio, JPM Equity Portfolio, JPM Small Company Portfolio
and JPM International Equity Portfolio. In the future, the Trust may add or
delete portfolios. By this Prospectus, shares of JPM Treasury Money Market
Portfolio are being offered.

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE: The Portfolio's investment objective is to provide current
income, maintain a high level of liquidity, and preserve capital. The
Portfolio's investment objective, and certain investment restrictions discussed
in the Statement of Additional Information, may be changed only with the
approval of the Portfolio's shareholders. The investment policies of the
Portfolio, used in furtherance of the Portfolio's objective, may be changed by
the Board without the approval of the Portfolio's shareholders.

The Portfolio seeks to achieve its investment objective by investing in direct
obligations of the United States (U.S.) Treasury and engaging in repurchase
agreement transactions with respect to those obligations.

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The Portfolio maintains a dollar-weighted average portfolio maturity of not more
than 90 days and invests in Treasury Securities (as defined below) which have
effective maturities of not more than thirteen months.

INVESTMENT POLICIES: Treasury Securities. The Portfolio will invest in 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 of America ("Treasury
Securities"). Each such obligation must have a remaining maturity of 397 days or
less at the time of purchase by the Portfolio. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial maturities of one to
ten years; and Treasury Bonds generally have initial maturities of greater than
ten years. The Portfolio will not invest in obligations of U.S. Government
Agencies ("U.S. Government Agency Obligations").

The Portfolio also may purchase Treasury Securities on a when-issued or delayed
delivery basis, loan its portfolio securities and may engage in repurchase and
reverse repurchase agreement transactions involving Treasury Securities. For a
discussion of these transactions, see "ADDITIONAL INVESTMENT INFORMATION."

RISK FACTORS: Obligations of the U.S. Treasury are guaranteed by the U.S.
Government as to the timely payment of principal and interest, but the market
value of such obligations is not guaranteed and may rise and fall in response to
changes in interest rates. Neither the shares of the Trust nor the interests in
the Portfolio are guaranteed or insured by the U.S. Government.

ADDITIONAL INVESTMENT INFORMATION

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase
securities on a when-issued or delayed delivery basis. Delivery of and payment
for these securities may take as long as a month or more after the date of the
purchase commitment. The value of these securities is subject to market
fluctuation during this period and no interest or income accrues to the
Portfolio until settlement. At the time of settlement a when-issued security may
be valued at less than its purchase price. The Portfolio maintains with the
custodian of the Trust (the "Custodian") a separate account with a segregated
portfolio of securities in an amount at least equal to these commitments. For
more information concerning the Custodian for the Trust, see "INVESTMENT
ADVISORY AND OTHER SERVICES" in the Statement of Additional Information. When
entering into a when-issued or delayed delivery transaction, the Portfolio will
rely on the other party to consummate the transaction; if the other party fails
to do so, the Portfolio may be disadvantaged. It is the current policy of the
Portfolio not to enter into when-issued commitments exceeding in the aggregate
15% of the market value of the Portfolio's total assets less liabilities other
than the obligations created by these commitments.

REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Board. The Portfolio will only enter into repurchase
agreements involving U.S. Treasury securities. In a repurchase agreement, the
Portfolio buys a security from a seller that has agreed to repurchase it at a
mutually agreed upon date and price, reflecting the interest rate effective for
the term of the agreement. The term of these agreements is usually from
overnight to one week. A repurchase agreement may be viewed as a fully
collateralized loan of money by the Portfolio to the seller. The Portfolio
always receives securities as collateral with a market value at least equal to
the purchase price plus accrued interest and this value is maintained during the
term of the agreement. If the seller defaults and the collateral value declines,
the Portfolio might incur a loss. If

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bankruptcy proceedings are commenced with respect to the seller, the Portfolio's
realization upon the disposition of collateral may be delayed or limited.
Investments in certain repurchase agreements and certain other investments which
may be considered illiquid are limited. See "Illiquid Investments; Privately
Placed and Other Unregistered Securities" below.

LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities. The Portfolio 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 Portfolio 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 Portfolio
any income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally five 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 is for the
account of the Portfolio and its respective shareholders. The Portfolio may pay
reasonable finders' and custodial fees in connection with a loan. In addition,
the Portfolio will consider all facts and circumstances including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee, or affiliate of the
Trust, the Adviser or Distributor, unless otherwise permitted by applicable law.

REVERSE REPURCHASE AGREEMENTS. The Portfolio is permitted to enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Portfolio sells a
security and agrees to repurchase it at a mutually agreed upon date and price,
reflecting the interest rate effective for the term of the agreement. It also
may be viewed as the borrowing of money by the Portfolio and, therefore, is a
form of leverage. Leverage may cause any gains or losses of the Portfolio to be
magnified.

ILLIQUID INVESTMENTS, PRIVATELY PLACED AND OTHER UNREGISTERED
SECURITIES. Subject to the limitations described below, the Portfolio may
acquire investments that are illiquid or have limited liquidity, such as
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 U.S. 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.

Acquisitions of illiquid investments by the Portfolio is subject to the
following non-fundamental policy. The Portfolio may not acquire any illiquid
securities if, as a result thereof, more than 10% of the market value of the
Portfolio's total assets would be in illiquid investments. The Portfolio also
may purchase Rule 144A securities sold to institutional investors without
registration under the 1933 Act. These securities may be determined to be liquid
in accordance with guidelines established by the Adviser and approved by the
Trustees. The Trustees will monitor the Adviser's implementation of these
guidelines on a periodic basis.

INVESTMENT RESTRICTIONS

Investments of the Portfolio are further restricted by certain policies that may
not be changed without the approval of the holders of the Portfolio's
outstanding shares. See "INVESTMENT RESTRICTIONS" in the Statement of Additional
Information.

5
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MANAGEMENT OF THE TRUST AND PORTFOLIO

The Board is responsible for the administration of the affairs of the Trust.
Pursuant to the Declaration of Trust for the Trust, the Trustees of the Trust
decide upon matters of general policy and review the actions of the Adviser and
other service providers.

The Trust's investment adviser is Morgan, a registered investment adviser which
maintains its principal office at 522 Fifth Avenue, New York, New York 10036.
Morgan is a wholly-owned subsidiary of J.P. Morgan & Co. Incorporated ("J.P.
Morgan"), a bank holding company organized under the laws of Delaware. Through
offices in New York City and abroad, J.P. Morgan, through Morgan and its 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. As of September 30, 1996, J.P. Morgan and its
subsidiaries had total combined assets under management of approximately $197
billion, of which Morgan advises over $167 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 adviser to national governments. The firm,
through its predecessor firms, has been in business for over a century and has
been managing investments since 1913.

Morgan supervises and assists in the overall management of the Trust's affairs
under an Investment Advisory Agreement with the Trust. Subject to the
supervision of the Trustees, Morgan makes the Portfolio's day-to-day investment
decisions, arranges for the execution of portfolio transactions and generally
manages the Portfolio's investments.

As compensation for Morgan's services under the Investment Advisory Agreement,
the Trust has agreed to pay Morgan a monthly fee at the annual rate of .20% of
the value of the Portfolio's average daily net assets.

Under the terms of an Administrative Services Agreement, Morgan Guaranty
provides or arranges for the provision of certain financial and administrative
services and oversees fund accounting for the Trust, including services related
to taxes, financial statements, calculation of Portfolio performance data,
oversight of service providers, certain regulatory and Board matters, and
shareholder services. Morgan Guaranty, a wholly-owned subsidiary of J.P. Morgan,
is a New York trust company which conducts a general banking and trust business
and maintains its principal office at 60 Wall Street, New York, New York 10260.

In addition, Morgan Guaranty is responsible for reimbursing the Trust for
certain usual and customary expenses incurred by the Trust including, without
limitation, transfer, registrar and dividend disbursing costs, custody fees,
legal and accounting expenses, fees of the Trust's co-administrator, insurance
premiums, compensation and expenses of the Trust's Trustees, expenses of
printing and mailing reports, notices and proxies to shareholders, and
registration fees under federal or state securities laws. The Trust will pay
these expenses directly and such amounts will be deducted from the fees payable
to Morgan Guaranty under the

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Administrative Services Agreement as set forth below. If such amounts are more
than the amount of Morgan Guaranty's fees under the Administrative Services
Agreement, Morgan Guaranty will reimburse the Trust for such excess amounts.

The Trust pays all extraordinary expenses not incurred in the ordinary course of
the Trust's business including, but not limited to, litigation and
indemnification expenses; interest charges; material increases in Trust expenses
due to occurrences such as significant increases in the fee schedules of the
custodian or the transfer agent or a significant decrease in the Trust's asset
level due to changes in tax or other laws or regulations; or other such
extraordinary occurrences outside of the ordinary course of the Trust's
business.

As compensation for Morgan Guaranty's services under the Administrative Services
Agreement, the Trust has agreed to pay Morgan Guaranty a monthly fee at the
annual rate of .40% of the value of the Portfolio's average daily net assets.

Under the terms of the Administrative Services Agreement, Morgan Guaranty may
delegate one or more of its responsibilities to other entities at Morgan
Guaranty's expense.

Morgan Guaranty or its affiliates may pay from its own assets Participating
Insurance Companies for providing certain administrative and account-related
services to owners of Policies for which Portfolio shares are the investment
vehicle.

From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb
Investment Advisory served as the Portfolio's investment manager and Morgan
Guaranty served as sub-investment adviser. The compensation to Morgan Guaranty,
as sub-investment adviser, was paid directly from the investment management fees
paid by the Trust to Chubb Investment Advisory. For the period January 3, 1995
(commencement of operations) through December 31, 1995, all investment
management fees payable by the Portfolio to Chubb Investment Advisory totaled
.40% of the Portfolio's average daily net assets. For the period January 3, 1995
through December 31, 1995, sub-investment advisory fees payable by Chubb
Investment Advisory to Morgan Guaranty totaled .20% of the Portfolio's average
daily net assets. Because a portion of the Portfolio's fees and expenses were
reimbursed, the ratio of the Portfolio's operating expenses to average net
assets for such period was .60%. Had a portion of the Portfolio's fees and
expenses not been reimbursed, the ratio of the Portfolio's operating expenses to
average net assets for such period would have been 2.77%.

The Trust's distributor and co-administrator is Funds Distributor, Inc. ("FDI"),
located at 60 State Street, Suite 1300, Boston, Massachusetts 02109. Under a
Co-Administration Agreement with the Trust, FDI is responsible for: (i)
providing office space, equipment and clerical personnel for maintaining the
organization and books and records of the Trust; (ii) providing officers for the
Trust; (iii) preparing and filing documents required in connection with the
Trust's state securities law registrations; (iv) reviewing and filing Trust
marketing and sales literature; (v) filing regulatory documents and mailing
communications to Trustees and investors; and (vi) maintaining related books and
records.

FDI is a wholly-owned indirect subsidiary of Boston Institutional Group, Inc.
FDI currently provides administration and distribution services for a number of
other registered investment companies.

State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02101, acts as the Trust's custodian and transfer agent and dividend paying
agent and keeps the books of account for the Trust.

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For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.

CAPITAL SHARES

Each Portfolio share is entitled to one vote on all matters submitted to a vote
of all shareholders of the Trust, and fractional shares are entitled to a
corresponding fractional vote. Portfolio shares will be voted separately from
shares of the Trust's other portfolios on matters affecting only the Portfolio,
including approval of the Investment Advisory Agreement, and changes in
fundamental investment policies of the Portfolio. The assets of the Portfolio
are charged with the liabilities of the Portfolio and a proportionate share of
the general liabilities of the Trust. All shares may be redeemed at any time.

As a Delaware Business Trust, the Trust is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust is, however, required to hold shareholder meetings for such
purposes as, for example: (i) approving certain agreements as required by the
Investment Company Act of 1940, as amended (the "1940 Act"); (ii) changing
fundamental investment objectives and restrictions of the Portfolio; and (iii)
filling vacancies on the Board in the event that less than a majority of the
Trustees were elected by shareholders. The Trust expects that there will be no
meetings of shareholders for the purpose of electing trustees unless and until
such time as less than a majority of the trustees holding office have been
elected by shareholders. At such time, the trustees then in office will call a
shareholder meeting for the election of trustees. In addition, holders of record
of not less than two-thirds of the outstanding shares of the Trust may remove a
Trustee from office by a vote cast in person or by proxy at a shareholder
meeting called for that purpose at the request of holders of 10% or more of the
outstanding shares of the Trust. The Trust has the obligation to assist in any
such shareholder communications. Except as set forth above, Trustees will
continue in office and may appoint successor Trustees.

In accordance with current law, the Trust anticipates that Portfolio shares held
in a separate account which are attributable to Policies will be voted by the
Participating Insurance Company in accordance with instructions received from
the owners of Policies. The Trust also anticipates that the shares held by the
Participating Insurance Company, including shares for which no voting
instructions have been received, shares held in the separate account
representing charges imposed by the Participating Insurance Company against the
separate account and shares held by the Participating Insurance Company that are
not otherwise attributable to Policies, also will be voted by the Participating
Insurance Company in proportion to instructions received from the owners of
Policies. For further information on voting rights, Policy owners should consult
the applicable prospectus of the separate account of the Participating Insurance
Company. Under current law, Eligible Plans are not required to provide Plan
participants with the right to give voting instructions. For information on
voting rights, Plan participants should consult their Plan's administrator or
trustee.

TAXES AND DIVIDENDS

The Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Code. It is the Trust's policy to comply with the provisions
of the Code regarding distribution of investment income. Under those provisions,
the Portfolio will not be subject to federal income tax on that portion of its
ordinary income and net capital gains distributed to shareholders.

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The Trust expects that the Portfolio will declare and distribute by the end of
each calendar year all or substantially all ordinary income and net capital
gains, if any, from the sale of investments. Failure to distribute substantially
all ordinary and net capital gains, as described, may subject the Trust to an
excise tax.

Dividends from ordinary income will be declared and distributed at least once
each year. Ordinary income of the Portfolio is the investment company taxable
income as defined in Section 852(b) of the Code determined partly (1) by
excluding the amount of net capital gain, if any, and (2) with allowance of the
deduction for dividends paid. All dividends and distributions will be
automatically reinvested in additional Portfolio shares with respect to which
dividends have been declared, at net asset value, as of the ex-dividend date of
such dividends.

Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying Policies in order for the Policies
to be treated as life insurance. These requirements, which are in addition to
diversification requirements applicable to the Portfolio under Subchapter M and
the 1940 Act, may affect the composition of the Portfolio's investments. Since
the shares of the Trust are currently sold to segregated asset accounts
underlying such Policies, the Trust intends to comply with the diversification
requirements as set forth in the regulations.

The Secretary of the Treasury may in the future issue additional regulations or
revenue rulings that will prescribe the circumstances in which a policy owner's
control of the investments of a separate account may cause the policy owner,
rather than the insurance company, to be treated as the owner of assets of the
separate account. Failure to comply with Section 817(h) of the Code or any
regulation thereunder, or with any regulations or revenue rulings on policy
owner control, if promulgated, would cause earnings regarding a policy owner's
interest in the separate account to be includable in the policy owner's gross
income in the year earned.

Dividends paid by the Trust to Eligible Plans ordinarily will not be subject to
taxation until the proceeds are distributed from the Plan. The Trust will not
report dividends paid to Plans to the Internal Revenue Service ("IRS").
Generally, distributions from Eligible Plans, except those representing returns
of non-deductible contributions thereto, will be taxable as ordinary income and,
if made prior to the time the participant reaches age 59-1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion of the
distribution. If the distribution from an Eligible Plan (other than certain
governmental or church plans) for any taxable year following the year in which
the participant reaches age 70-1/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or custodian of
such a Plan will be responsible for reporting distributions from the Plan to the
IRS. Participants in Eligible Plans will receive a disclosure statement
describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to an Eligible Plan in excess of
the amounts permitted by law may be subject to an excise tax.

OFFERING AND REDEMPTION OF SHARES

9
<PAGE>
Policy owners should consult the applicable prospectus of the separate account
of the Participating Insurance Company and Plan participants should consult the
Plan's administrator or trustee for more information on the purchase or
redemption of Portfolio shares.

Should any conflict between VA contract holders, VLI policy holders and/or Plan
participants arise which would require that a substantial amount of the
Portfolio's net assets be withdrawn, orderly portfolio management could be
disrupted to the potential detriment of such contract and policy holders and/or
Plan participants.

Distributions from Eligible Plans, except distributions representing returns of
non-deductible contributions to the Plan, generally are taxable income to the
participant. Distributions from a Plan to a participant prior to the time the
participant reaches age 59-1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS. Participants
should consult their tax advisers concerning the timing and consequences of
distributions from an Eligible Plan.

OTHER INFORMATION

At a Special Meeting of Shareholders of the Trust held on December 12, 1996, the
resignation of Chubb Investment Advisory as the Portfolio's investment manager
was accepted and Morgan was engaged to serve, effective January 1, 1997, as the
Portfolio's investment adviser pursuant to the Investment Advisory Agreement.
The Trust was organized on October 28, 1993. Prior to January 1, 1997, the
Trust's name was The Chubb Series Trust and the Portfolio's name was The
Resolute Treasury Money Market Portfolio.

10
<PAGE>

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

JPM Series Trust II
JPM Treasury
Money Market
Portfolio

NO DEALER, SALESMAN OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFER CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY
THE TRUST OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER BY THE TRUST OR BY THE
DISTRIBUTOR TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY
ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL FOR
THE TRUST OR THE DISTRIBUTOR TO
MAKE SUCH OFFER IN SUCH PROSPECTUS
JURISDICTION. JANUARY 1, 1997
<PAGE>
- --------------------------------------------------------------------------------

PROSPECTUS
JPM Series Trust II
JPM Bond Portfolio
60 State Street
Boston, Massachusetts 02109
1-800-221-7930

JPM Bond Portfolio (the "Portfolio") is a separate diversified portfolio of JPM
Series Trust, an open-end management investment company organized as a Delaware
Business Trust (the "Trust"). The Portfolio seeks to provide a high total return
consistent with moderate risk of capital and maintenance of liquidity.

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

INVESTMENTS IN THE PORTFOLIO ARE NOT BANK DEPOSITS AND ARE NOT INSURED BY,
GUARANTEED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE FDIC OR ANY BANK.
AN INVESTMENT IN THE PORTFOLIO 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.

THE DATE OF THIS PROSPECTUS IS JANUARY 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Annual Operating Expenses......................... 1
Financial Highlights.............................. 2
Performance and Yield Information................. 3
The Portfolio..................................... 4
Investment Objective and Policies................. 4
Investment Objective............................ 4
Investment Policies............................. 5
Risk Factors.................................... 7
Additional Investment Information................. 8
Convertible Securities.......................... 8
When-Issued and Delayed Delivery
Securities..................................... 8
Repurchase Agreements........................... 8
Loans of Portfolio Securities................... 8
Reverse Repurchase Agreements................... 9
Mortgage Dollar Roll Transactions............... 9

<CAPTION>
PAGE
<S> <C>
Foreign Investment Information.................. 9
Foreign Currency Exchange Transactions.......... 10
Illiquid Investments, Privately Placed and
Other Unregistered Securities.................. 11
Futures and Options Transactions................ 11
Money Market Instruments........................ 11
Portfolio Turnover................................ 11
Investment Restrictions........................... 12
Management of the Trust and Portfolio............. 12
Capital Shares.................................... 14
Taxes and Dividends............................... 15
Offering and Redemption of Shares................. 16
Other Information................................. 16
Appendix.......................................... A-1
</TABLE>

<TABLE>
<S> <C>
Management Fees...................................................................... .30%
Other Expenses....................................................................... .45%
---------
Total Portfolio Operating Expenses................................................... .75%
</TABLE>

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................................................................ $ 8
3 Years............................................................... $24
5 Years............................................................... $42
10 Years.............................................................. $93

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by the Portfolio, the payment of which will reduce
investors' annual return. The information in the foregoing table has been
restated to reflect an agreement by Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), an affiliate of Morgan, to reimburse the Trust to the
extent certain expenses exceed in any fiscal year .75% of the Portfolio's
average daily net assets. The information in the foregoing table does not
reflect deduction of account fees and charges to separate accounts or related
insurance policies that may be imposed by participating insurance companies. For
a further description of the various costs and expenses incurred in the
operation of the Portfolio, as well as expense reimbursement or waiver
arrangements, see "Management of the Trust and Portfolio."

1
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Six Month
January 3, 1995 Period Ended
through June 30, 1996
December 31, 1995 (Unaudited)
----------------- -------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 10.00 $ 10.91
----------------- -------------
Income From Investment Operations
Net investment income..................................... 0.58 0.31
Net realized and unrealized gains (losses) on securities &
foreign currency......................................... 1.11 (0.58)
----------------- -------------
Total from investment operations........................ 1.69 (0.27)
----------------- -------------
Less Distributions to Shareholders
Dividends from net investment income...................... (0.58)
Distributions from net capital gains...................... (0.20) (0.01)
----------------- -------------
Total distributions......................................... (0.78) (0.01)
----------------- -------------
Net asset value, end of period.............................. $ 10.91 $ 10.63
----------------- -------------
----------------- -------------
Total Return(2)............................................. 16.85% (2.37%)
----------------- -------------
----------------- -------------
Ratios to average net assets:
(Annualized)
Expenses(3)............................................... 0.75% 0.75%
Net investment income..................................... 6.00% 5.87%
Portfolio turnover rate..................................... 238.96% 127.90%
Average commission rate paid................................ N/A N/A
Net assets, at end of period................................ $1,416,694 $1,544,150
</TABLE>

- ---------
(1) From January 3, 1995 (commencement of operations) to December 31, 1996,
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a
wholly-owned subsidiary of Chubb Life Insurance Company of America ("Chubb
Life"), served as the Portfolio's investment manager, and Morgan Guaranty served
as the Portfolio's sub-investment adviser. Effective January 1, 1997, Morgan
began serving as the Portfolio's investment adviser. See "OTHER INFORMATION."
(2) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges to separate accounts or
related insurance policies, which, if reflected, would reduce the Portfolio's
total return for the period indicated. Investment returns and principal values
will fluctuate and shares, when redeemed, may be worth more or less than their
original cost. Total returns for periods of less than one year have not been
annualized.
(3) All related party fees have been waived and all other expenses of the
Portfolio have been assumed in part for 1996 and 1995 by Chubb Life and Morgan
Guaranty. Had the fees not been waived and expenses not been assumed, the ratios
of the Portfolio's expenses to average net assets would have been 2.45% in 1996
and 2.90% in 1995.

2
<PAGE>
PERFORMANCE AND YIELD INFORMATION

From time to time the Trust may advertise the yield and/or the average annual
total return of the Portfolio. These figures are based on historical earnings
and are not intended to indicate future performance. Portfolio shares presently
are offered only to variable annuity and variable life insurance separate
accounts established by affiliated and unaffiliated life insurance companies
("Participating Insurance Companies") to fund variable annuity contracts ("VA
contracts") and variable life insurance policies ("VLI policies" and, together
with VA contracts, "Policies") and qualified pension and retirement plans
outside the separate account context. None of these performance figures reflect
fees and charges imposed by Participating Insurance Companies, which fees and
charges will reduce the yield and total return to Policy owners; therefore,
these performance figures may be of limited use for comparative purposes. Policy
owners should consult the prospectus for such Policy.

The Portfolio's yield is calculated by dividing the Portfolio's net investment
income per share during a recent 30-day period by maximum offering price per
share (which is its net asset value) on the last day of the period.

The Portfolio's average annual total return is determined by computing the
average annual percentage change in value of a $10,000 investment, made at the
maximum public offering price (which is net asset value) for certain specified
periods. This computation assumes reinvestment of all dividends and
distributions.

Set forth below is historical performance information for the Portfolio and for
an appropriate securities index with respect to the Portfolio. In addition, set
forth below is hypothetical performance information derived from historical
composite performance of all Private Accounts managed by Morgan which have
investment objectives, policies and strategies substantially similar to those of
the Portfolio and, thus, is deemed relevant to Portfolio investors. THE
HYPOTHETICAL PERFORMANCE INFORMATION OF THE PRIVATE ACCOUNTS OF THE ACTIVE FIXED
INCOME COMPOSITE DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE PORTFOLIO
AND SHOULD NOT BE INTERPRETED AS INDICATIVE OF THE FUTURE PERFORMANCE OF THE
PORTFOLIO. Moreover, the Private Accounts are not registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and, therefore, are
not subject to certain investment restrictions, diversification requirements and
other restrictions that are imposed by the 1940 Act and the Internal Revenue
Service, which, if imposed, might have adversely affected the performance of the
Private Accounts. In addition, the Private Accounts may include a higher
allocation of investments in private placements of corporate and
mortgage-related securities than the Portfolio.

The hypothetical performance results of the Private Accounts set forth below
represent the audited actual performance results of the composite, adjusted to
reflect the deduction of the Portfolio's fees and expenses. These results have
been calculated in accordance with Performance Presentation Standards of the
Association for Investment Management and Research. The term "average annual
total return" signifies that cumulative total returns for a stated time period
have been annualized over such period. These

3
<PAGE>
returns are time-weighted rates of return which include all accrued income and
realized and unrealized gains or losses, but do not reflect the deduction of
investment advisory fees actually charged to the Private Accounts.

<TABLE>
<CAPTION>
Average Annual Total Return
------------------------------------------
5 Years or 10 Years or
1 Year Since Inception Since Inception
------ --------------- ---------------
<S> <C> <C> <C>
JPM Bond Portfolio
Period ended June 30, 1996................................ 3.68% 9.24%* N/A
Period ended December 31, 1995............................ 16.85%* 16.85%* N/A
Active Fixed Income Composite
Period ended December 31, 1995............................ 18.38% 9.46% 9.75%
Salomon Brothers Broad Investment Grade Bond Index**
Period ended December 31, 1995............................ 18.55% 9.57% 9.69%
</TABLE>

- ---------
* Commenced operations January 3, 1995.
** The Salomon Brothers Broad Investment Grade Bond Index is a market
capitalization-weighted index that includes U.S. Treasury, Government-sponsored,
mortgage and investment grade fixed rate corporate fixed income securities with
a maturity of one year or longer and a minimum of $50 million amount outstanding
at the time of inclusion in the Index.

THE PORTFOLIO

Portfolio shares are both offered and redeemed at their net asset value without
the addition of any sales load or redemption charge. See "OFFERING AND
REDEMPTION OF SHARES."

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE: The Portfolio's investment objective is to provide a high
total return consistent with moderate risk of capital and maintenance of
liquidity. Total return will consist of realized and

4
<PAGE>
unrealized capital gains and losses plus income less expenses. Although the net
asset value of the Portfolio will fluctuate, the Portfolio attempts to preserve
the value of its investments to the extent consistent with its objective.

The Portfolio is designed for investors who seek a total return over time that
is higher than that generally available from a portfolio of short-term
obligations while acknowledging greater price fluctuation of longer-term
instruments.

The Portfolio's investment objective, and certain investment restrictions
discussed in the Statement of Additional Information, may be changed only with
the approval of the Portfolio's shareholders. The investment policies of the
Portfolio, used in furtherance of the Portfolio's objective, may be changed by
the Board without the approval of the Portfolio's shareholders.

Because investment involves both opportunities for gain and risks of loss, no
assurance can be given that the Portfolio will achieve its objective.
Prospective purchasers of Policies and Plan participants should carefully review
the objective and policies of the Portfolio and consider their ability to assume
the risks involved before allocating amounts for investment therein.

INVESTMENT POLICIES: The Adviser actively manages the Portfolio's duration, the
allocation of securities across market sectors, and the selection of specific
securities within sectors. Based on fundamental, economic and capital markets
research, the Adviser adjusts the duration of the Portfolio in light of market
conditions and the Adviser's interest rate outlook. For example, if interest
rates are expected to fall, the duration may be lengthened to take advantage of
the expected associated increase in bond prices. The Adviser also actively
allocates the Portfolio's assets among the broad sectors of the fixed income
market including, but not limited to, U.S. Government Agency Obligations,
corporate securities, private placements, asset-backed and mortgage-related
securities. Specific securities which the Adviser believes to be undervalued are
selected for purchase within the sectors using advanced quantitative tools,
analysis of credit risk, the expertise of a dedicated trading desk, and the
judgment of fixed income portfolio managers and analysts. Under normal market
conditions, the Adviser intends to keep the Portfolio essentially fully invested
with at least 65% of the Portfolio's assets invested in bonds, debentures and
other debt instruments. The Portfolio may invest up to 20% of its assets in
securities denominated in foreign currencies, and may invest without limitation
in U.S. dollar-denominated securities of foreign issuers.

Duration is a measure of the weighted average maturity of the bonds held in the
Portfolio and can be used as a measure of the sensitivity of the Portfolio's
market value to changes in interest rates. Under normal market conditions, the
Portfolio's duration will range between one year shorter and one year longer
than the duration of the U.S. investment grade fixed income universe, as
represented by Salomon Brothers Broad Investment Grade Bond Index. Currently,
such Index's duration is approximately 4.5 years. However, the maturities of the
individual securities in the Portfolio may vary widely.

The Adviser intends to manage the Portfolio actively in pursuit of its
investment objective. Portfolio transactions are undertaken principally to
accomplish the Portfolio's objective in relation to expected movements in the
general level of interest rates, but the Portfolio also may engage in short-term
trading consistent with its objective. To the extent the Portfolio engages in
short-term trading, it may incur increased transaction costs.

CORPORATE BONDS, ETC. The Portfolio may invest in a broad range of debt
securities of domestic and foreign issuers. These include debt securities of
various types and maturities, e.g., debentures, notes, mortgage-related
securities, equipment trust certificates and other collateralized securities and
zero coupon securities.

5
<PAGE>
Collateralized securities are backed by a pool of assets such as loans or
receivables which generate cash flow to cover the payments due on the
securities. Collateralized securities are subject to certain risks, including a
decline in the value of the collateral backing the security, failure of the
collateral to generate the anticipated cash flow or in certain cases more rapid
prepayment because of events affecting the collateral, such as accelerated
prepayment of mortgages or other loans backing these securities or destruction
of equipment subject to equipment trust certificates. In the event of any such
prepayment the Portfolio will be required to reinvest the proceeds of
prepayments at interest rates prevailing at the time of reinvestment, which may
be lower than at the time of purchase. In addition, the value of zero coupon
securities which do not pay interest is more volatile than that of interest
bearing debt securities with the same maturity. The Portfolio does not intend to
invest in common stock but may invest to a limited extent in convertible debt or
preferred stock. See "ADDITIONAL INVESTMENT INFORMATION" for further information
on foreign investment and convertible securities.

GOVERNMENT OBLIGATIONS, ETC. The Portfolio may invest in obligations issued or
guaranteed by the U.S. Government and backed by the full faith and credit of the
U.S. Government. These securities include Treasury Securities, obligations of
the Government National Mortgage Association ("GNMA"), the Farmers Home
Administration and the Export Import Bank. GNMA Certificates are mortgage-backed
securities which evidence an undivided interest in mortgage pools. These
securities are subject to more rapid repayment than their stated maturity would
indicate because prepayments of principal on mortgages in the pool are passed
through to the holder of the securities. During periods of declining interest
rates, prepayments of mortgages in the pool can be expected to increase. The
pass-through of these prepayments would have the effect of reducing the
Portfolio's positions in these securities and requiring the Portfolio to
reinvest the prepayments at interest rates prevailing at the time of
reinvestment. The Portfolio also may invest in obligations issued or guaranteed
by U.S. Government agencies or instrumentalities where the Portfolio must look
principally to the issuing or guaranteeing agency for ultimate repayment; some
examples of agencies or instrumentalities issuing these obligations are the
Federal Farm Credit System, the Federal Home Loan Banks and the Federal National
Mortgage Association. Although these governmental issuers are responsible for
payments on their obligations, they do not guarantee their market value. The
Portfolio also may invest in municipal obligations which may be general
obligations of the issuer or payable only from specific revenue sources.
However, the Portfolio will invest only in municipal obligations that have been
issued on a taxable basis or have an attractive yield excluding tax
considerations. In addition, the Portfolio may invest in debt securities of
foreign governments and governmental entities. See "ADDITIONAL INVESTMENT
INFORMATION" for further information on foreign investments.

MONEY MARKET INSTRUMENTS. The Portfolio may invest in various types of money
market instruments subject to the quality requirements of the Portfolio. See
"Quality Information" below and "MONEY MARKET INSTRUMENTS" in the Statement of
Additional Information. Under normal circumstances, the Portfolio will purchase
these securities to invest temporary cash balances or to maintain liquidity to
meet redemptions. However, the Portfolio also may invest in money market
instruments as a temporary defensive measure taken during, or in anticipation
of, adverse market conditions.

UNITED STATES GOVERNMENT OBLIGATIONS. See "Government Obligations, etc." above.

BANK OBLIGATIONS. The Portfolio may invest in high quality 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 U.S. federal or state law, (ii) foreign
branches of these banks or of foreign banks of equivalent size (Euros) and (iii)
U.S. branches of foreign banks of

6
<PAGE>
equivalent size (Yankees). The Portfolio also may invest in obligations of
international banking institutions designated or supported by national
governments to promote economic reconstruction, development or trade between
nations (e.g., the European Investment Bank, the Inter-American Development
Bank, or the World Bank). These obligations may be supported by appropriated but
unpaid commitments of their member countries, and there is no assurance these
commitments will be undertaken or met in the future.

COMMERCIAL PAPER; BONDS. The Portfolio may invest in high quality commercial
paper and corporate bonds issued by U.S. corporations. The Portfolio also may
invest in bonds and commercial paper of foreign issuers if the obligation is not
subject to foreign withholding tax.

ASSET-BACKED SECURITIES. The Portfolio also may invest in securities generally
referred to as asset-backed securities, which directly or indirectly represent a
participation interest in, or are secured by and payable from, a stream of
payments generated by particular assets such as motor vehicle or credit card
receivables. Asset-backed securities provide periodic payments that generally
consist of both interest and principal payments. Consequently, the life of an
asset-backed security varies with the prepayment experience of the underlying
debt instruments.

QUALITY INFORMATION. The Portfolio's current policy is that, under normal
circumstances, at least 65% of its total assets will consist of securities that
are rated at least A by Moody's Investors Service, Inc. ("Moody's") or Standard
& Poor's Ratings Group ("Standard & Poor's") or that are unrated and in the
Adviser's opinion are of comparable quality. The remainder of the Portfolio's
assets may be invested in debt securities that are rated Baa by Moody's and BBB
by Standard & Poor's or, with respect to no more than 10% of its assets, rated
Ba or B by Moody's and BB or B by Standard & Poor's or are unrated and in the
Adviser's opinion are of comparable quality. Securities rated Baa by Moody's or
BBB by Standard & Poor's are considered investment grade, but have some
speculative characteristics. Securities rated Ba or B by Moody's and BB or B by
Standard & Poor's are below investment grade (commonly known as "junk bonds")
and ordinarily provide higher yields but involve greater risk because of their
speculative characteristics. See "Risk Factors" below. These standards must be
satisfied at the time an investment is made. If the quality of the investment
later declines below the quality required for purchase, the Portfolio may
continue to hold the investment. See also "APPENDIX A" in the Statement of
Additional Information for more detailed information on these ratings, and "High
Yield/High Risk Bonds" in the Statement of Additional Information for a
discussion of risks associated with investing in junk bonds.

The Portfolio also may purchase obligations on a when-issued or delayed delivery
basis, enter into repurchase and reverse repurchase agreements, loan its
portfolio securities, purchase certain privately placed securities and use
options on securities and securities indices, futures contracts and options on
futures contracts for hedging and risk management purposes. For a discussion of
these investments and investment techniques, see "ADDITIONAL INVESTMENT
INFORMATION."

RISK FACTORS: If the Portfolio disposes of an obligation prior to maturity, it
may realize a loss or a gain. An increase in interest rates will generally
reduce the value of portfolio investments, and a decline in interest rates will
generally increase the value of portfolio investments. As a result, the level of
income under such circumstances may vary. In addition, portfolio investments
(other than Treasury Securities) are dependent upon the ability of the issuer to
make scheduled payments of principal and interest. Certain securities purchased
by the Portfolio, such as those rated Baa or as low as B by Moody's and BBB or
as low as B by S&P, may be subject to such risk with respect to the issuing
entity and to greater market fluctuations than certain lower yielding, higher
rated fixed-income securities. The retail secondary market

7
<PAGE>
for these securities may be less liquid than that of higher rated securities;
adverse conditions could make it difficult at times for the Portfolio to sell
certain lower rated securities or could result in lower prices than those used
in calculating the Portfolio's net asset value.

ADDITIONAL INVESTMENT INFORMATION

CONVERTIBLE SECURITIES. The Portfolio may invest in convertible securities of
domestic and, subject to the Portfolio's restrictions, foreign issuers. The
convertible securities in which the Portfolio may invest include any debt
securities or preferred stock which may be converted into common stock or which
carry the right to purchase common stock. Convertible securities entitle the
holder to exchange the securities for a specified number of shares of common
stock, usually of the same company, at specified prices within a certain period
of time.

REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Board. In a repurchase agreement, the Portfolio buys a
security from a seller that has agreed to repurchase it at a mutually agreed
upon date and price, reflecting the interest rate effective for the term of the
agreement. The term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money by
the Portfolio to the seller. The Portfolio always receives securities as
collateral with a market value at least equal to the purchase price plus accrued
interest and this value is maintained during the term of the agreement. If the
seller defaults and the collateral value declines, the Portfolio might incur a
loss. If bankruptcy proceedings are commenced with respect to the seller, the
Portfolio's realization upon the disposition of collateral may be delayed or
limited. Investments in certain repurchase agreements and certain other
investments which may be considered illiquid are limited. See "Illiquid
Investments, Privately Placed and Other Unregistered Securities" below.

8
<PAGE>
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 is for the account of the Portfolio and
its shareholders. The Portfolio may pay reasonable finders' and custodial fees
in connection with a loan. In addition, the Portfolio will consider all facts
and circumstances including the creditworthiness of the borrowing financial
institution, and the Portfolio will not make any loans in excess of one year.
The Portfolio will not lend its securities to any officer, Trustee, Director,
employee, or affiliate of the Trust, the Adviser or Distributor, unless
otherwise permitted by applicable law.

MORTGAGE DOLLAR ROLL TRANSACTIONS. The Portfolio may engage in mortgage dollar
roll transactions with respect to mortgage-related securities issued by certain
federal government agencies. In a mortgage dollar roll transaction, the
Portfolio sells a mortgage-related security and simultaneously agrees to
purchase a substantially similar security on a specified date at an agreed upon
price. Compensation is derived from the difference of the sales price and the
lower price for the future repurchase as well as by the interest earned on the
reinvestment of the sales proceeds, and in some cases by a commitment fee.

FOREIGN INVESTMENT INFORMATION. The Portfolio may invest in certain securities
of foreign issuers. Investment in securities of foreign issuers and in
obligations of foreign branches of domestic banks involves somewhat different
investment risks from those affecting securities of U.S. domestic issuers. There
may be limited publicly available information with respect to foreign issuers,
and foreign issuers are not generally subject to uniform accounting, auditing
and financial standards and requirements comparable to those applicable to
domestic companies. Dividends and interest paid by foreign issuers may be
subject to withholding and other foreign taxes which may decrease the net return
on foreign investments as compared to dividends and interest paid to the
Portfolio by domestic companies.

Investors should realize that the value of the Portfolio's investments in
foreign securities may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation,
nationalization, limitation on the removal of funds or assets, or imposition of
(or change in) exchange control or tax regulations in those foreign countries.
In addition, changes in government administrations or economic or monetary
policies in the U.S. or abroad could result in appreciation or depreciation of
portfolio securities and could favorably or unfavorably affect the Portfolio's
operations. Furthermore, the economies of individual foreign nations may differ
from the U.S. economy, whether favorably or unfavorably, in areas such as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position; it also may be more difficult
to obtain and enforce a judgment against a foreign issuer. Any foreign
investments made by the Portfolio must be made in compliance with the U.S. and
foreign currency restrictions and tax laws restricting the amounts and types of
foreign investments.

9
<PAGE>
investments in securities of U.S. companies. Moreover, the settlement periods
for foreign securities, which are often longer than those for securities of U.S.
issuers, may affect portfolio liquidity. In buying and selling securities on
foreign exchanges, purchasers normally pay fixed commissions that are generally
higher than the negotiated commissions charged in the U.S. In addition, there is
generally less government supervision and regulation of securities exchanges,
brokers and issuers located in foreign countries than in the U.S.

The Portfolio may invest in securities of foreign issuers directly or in the
form of ADRs, European Depositary Receipts ("EDRs") or other similar securities
of foreign issuers. These securities may not necessarily be denominated in the
same currency as the securities they represent. ADRs are receipts typically
issued by a U.S. bank or trust company evidencing ownership of the underlying
foreign securities. Certain such institutions issuing ADRs may not be sponsored
by the issuer of the underlying foreign securities. A non-sponsored depositary
may not provide the same shareholder information that a sponsored depositary is
required to provide under its contractual arrangements with the issuer of the
underlying foreign securities. EDRs are receipts issued by a European financial
institution evidencing a similar arrangement. Generally, ADRs, in registered
form, are designed for use in the U.S. securities markets, and EDRs, in bearer
form, are designed for use in European securities markets.

Since investments in foreign securities involve foreign currencies, the value of
the Portfolio's assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
including currency blockage. See "Foreign Currency Exchange Transactions" below.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the Portfolio buys and sells
securities denominated in currencies other than the U.S. dollar, and receives
interest, dividends and sale proceeds in currencies other than the U.S. dollar,
the Portfolio will, from time to time, enter into foreign currency exchange
transactions. The Portfolio either enters into these transactions on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or uses forward contracts to purchase or sell foreign currencies. The
cost of the Portfolio's currency exchange transactions will generally be the
difference between the bid and offer spot rate of the currency being purchased
or sold.

A forward foreign currency exchange contract is an obligation by the Portfolio
to purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract. Forward foreign currency exchange
contracts establish an exchange rate at a future date. These contracts are
entered into in the interbank market directly between currency traders (usually
large commercial banks) and their customers. A forward foreign currency exchange
contract generally has no deposit requirement, and is traded at a net price
without commission. Neither spot transactions nor forward foreign currency
exchange contracts eliminate fluctuations in the prices of the Portfolio's
securities, or prevent loss if the prices of these securities should decline.

The Portfolio may enter into foreign currency exchange transactions for a
variety of purposes, including: to fix in U.S. dollars, between trade and
settlement date, the value of a security the Portfolio has agreed to buy or
sell; to hedge the U.S. dollar value of securities the Portfolio already owns,
particularly if it expects a decrease in the value of the currency in which the
foreign security is denominated; or to gain or reduce exposure to the foreign
currency in an attempt to enhance return.

10
<PAGE>
As a hedging strategy, although these transactions are intended to minimize the
risk of loss due to a decline in the value of the hedged currency, at the same
time they tend to limit any potential gain that might be realized should the
value of the hedged currency increase. In addition, forward contracts that
convert a foreign currency into another foreign currency will cause the
Portfolio to assume the risk of fluctuations in the value of the currency
purchased vis-a-vis the hedged currency and the U.S. dollar. The precise
matching of the forward contract amounts and the value of the securities
involved will not generally be possible because the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of such securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging or
investment strategy is highly uncertain.

Acquisitions of illiquid investments by the Portfolio is subject to the
following non-fundamental policy. The Portfolio may not invest in illiquid
securities if, as a result more than 15% of the market value of its total assets
would be invested in illiquid securities. The Portfolio also may purchase Rule
144A securities sold to institutional investors without registration under the
1933 Act. These securities may be determined to be liquid in accordance with
guidelines established by the Adviser and approved by the Trustees. The Trustees
will monitor the Adviser's implementation of these guidelines on a periodic
basis.

FUTURES AND OPTIONS TRANSACTIONS. The Portfolio is permitted to enter into the
futures and options transactions described in the "APPENDIX" to this Prospectus
for both hedging and risk management purposes, although not for speculation. For
more detailed information about these transactions, see the "APPENDIX" to this
Prospectus and "OPTIONS AND FUTURES TRANSACTIONS" in the Statement of Additional
Information.

MONEY MARKET INSTRUMENTS. The Portfolio is permitted to invest in money market
instruments, although it intends to stay invested in long-term fixed income
securities to the extent practical in light of its investment objective and
long-term investment perspective. The Portfolio may make money market
investments pending other investment or settlement, for liquidity or in adverse
market conditions. The money market investments permitted for the Portfolio
include obligations of the U.S. Government and its agencies and
instrumentalities, other debt securities, commercial paper, bank obligations and
repurchase agreements. For more detailed information about these money market
instruments, see "INVESTMENT OBJECTIVES AND POLICIES" in the Statement of
Additional Information.

PORTFOLIO TURNOVER

Portfolio turnover for the Portfolio may vary from year to year or within a year
depending upon economic and business conditions. The annual portfolio turnover
rate for the Portfolio in 1995 was approximately

11
<PAGE>
239%. A portfolio having a turnover rate more than 100% may realize larger
amounts of gains or losses than it would with a lower portfolio turnover rate. A
portfolio turnover rate of greater than 100% may result in a portfolio paying
more brokerage commissions or other transaction related costs.

INVESTMENT RESTRICTIONS

MANAGEMENT OF THE TRUST AND PORTFOLIO

Morgan uses a sophisticated, disciplined, collaborative process for managing all
asset classes. The following persons are primarily responsible for the
day-to-day management and implementation of Morgan's process for the Portfolio
(the inception date of each person's responsibility for the Portfolio and their
business experience for the past five years are indicated parenthetically):
William G. Tenile, Vice President (since January, 1995, employed by Morgan since
March, 1992, previously Managing Director, Manufacturers Hanover Trust Company)
and Connie J. Plaehn, Managing Director (since January, 1995, employed by Morgan
since prior to 1989).

As compensation for Morgan's services under the Investment Advisory Agreement,
the Trust has agreed to pay Morgan a monthly fee at the annual rate of .30% of
the Portfolio's average daily net assets.

12
<PAGE>
of service providers, certain regulatory and Board matters, and shareholder
services. Morgan Guaranty, a wholly-owned subsidiary of J.P. Morgan, is a New
York trust company which conducts a general banking and trust business and
maintains its principal office at 60 Wall Street, New York, New York 10260.

As compensation for Morgan Guaranty's services under the Administrative Services
Agreement, the Trust has agreed to pay Morgan Guaranty a monthly fee at the
annual rate of .45% of the Portfolio's average daily net assets.

Under the terms of the Administrative Services Agreement, Morgan Guaranty may
delegate one or more of its responsibilities to other entities at Morgan
Guaranty's expense.

From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb
Investment Advisory served as the Portfolio's investment manager and Morgan
Guaranty served as sub-investment adviser. The compensation to Morgan Guaranty,
as sub-investment adviser, was paid directly from the investment management fees
paid by the Trust to Chubb Investment Advisory. For the period January 3, 1995
(commencement of operations) through December 31, 1995, all investment
management fees payable by the Portfolio to Chubb Investment Advisory totaled
.50% of the Portfolio's average daily net assets. For the period January 3, 1995
through December 31, 1995, sub-investment advisory fees payable by Chubb
Investment Advisory to Morgan Guaranty totaled .30% of the Portfolio's average
daily net assets. Because a portion of the Portfolio's fees and expenses were
reimbursed, the ratio of the Portfolio's operating expenses to average net
assets for such period was .75%. Had a portion of the Portfolio's fees and
expenses not been reimbursed, the ratio of the Portfolio's operating expenses to
average net assets for such period would have been 2.90%.

13
<PAGE>
organization and books and records of the Trust; (ii) providing officers for the
Trust; (iii) preparing and filing documents required in connection with the
Trust's state securities law registrations; (iv) reviewing and filing Trust
marketing and sales literature; (v) filing regulatory documents and mailing
communications to Trustees and investors; and (vi) maintaining related books and
records.

FDI is a wholly-owned indirect subsidiary of Boston Institutional Group, Inc.
FDI currently provides administration and distribution services for a number of
other registered investment companies.

For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.

CAPITAL SHARES

As a Delaware Business Trust, the Trust is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust is, however, required to hold shareholder meetings for such
purposes as, for example: (i) approving certain agreements as required by the
1940 Act; (ii) changing fundamental investment objectives and restrictions of
the Portfolio; and (iii) filling vacancies on the Board in the event that less
than a majority of the Trustees were elected by shareholders. The Trust expects
that there will be no meetings of shareholders for the purpose of electing
trustees unless and until such time as less than a majority of the trustees
holding office have been elected by shareholders. At such time, the trustees
then in office will call a shareholder meeting for the election of trustees. In
addition, holders of record of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee from office by a vote cast in person or
by proxy at a shareholder meeting called for that purpose at the request of
holders of 10% or more of the outstanding shares of the Trust. The Trust has the
obligation to assist in any such shareholder communications. Except as set forth
above, Trustees will continue in office and may appoint successor Trustees.

14
<PAGE>
Under current law, Eligible Plans are not required to provide Plan participants
with the right to give voting instructions. For information on voting rights,
Plan participants should consult their Plan's administrator or trustee.

TAXES AND DIVIDENDS

The Trust expects that the Portfolio will declare and distribute by the end of
each calendar year all or substantially all ordinary income and net capital
gains, if any, from the sale of investments. Failure to distribute substantially
all ordinary and net capital gains, as described, may subject the Trust to an
excise tax.

Dividends from ordinary income will be declared and distributed at least once
each year. Ordinary income is the investment company taxable income as defined
in Section 852(b) of the Code determined partly (1) by excluding the amount of
net capital gain, if any, and (2) with allowance of the deduction for dividends
paid. All dividends and distributions will be automatically reinvested in
additional Portfolio shares with respect to which dividends have been declared,
at net asset value, as of the ex-dividend date of such dividends.

Dividends paid by the Trust to Eligible Plans ordinarily will not be subject to
taxation until the proceeds are distributed from the Plan. The Trust will not
report dividends paid to Plans to the Internal Revenue Service ("IRS").
Generally, distributions from Eligible Plans, except those representing returns
of non-deductible contributions thereto, will be taxable as ordinary income and,
if made prior to the time the participant reaches age 59 1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion of the
distribution. If the distribution from an Eligible Plan (other than certain
governmental or church plans) for any taxable year following the year in which
the participant reaches age 70 1/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or custodian of
such a Plan will be responsible for

15
<PAGE>
reporting distributions from the Plan to the IRS. Participants in Eligible Plans
will receive a disclosure statement describing the consequences of a
distribution from the Plan from the administrator, trustee or custodian of the
Plan prior to receiving the distribution. Moreover, certain contributions to an
Eligible Plan in excess of the amounts permitted by law may be subject to an
excise tax.

OFFERING AND REDEMPTION OF SHARES

Portfolio shares are currently offered only to separate accounts of
Participating Insurance Companies to which premiums have been allocated by
Policy owners and Eligible Plans. Shares are sold and redeemed at their net
asset value as next determined following receipt of an order or request by the
Trust or its agent. Policy owners should consult the applicable prospectus of
the separate account of the Participating Insurance Company and Plan
participants should consult the Plan's administrator or trustee for more
information on the purchase or redemption of Portfolio shares.

Distributions from Eligible Plans, except distributions representing returns of
non-deductible contributions to the Plan, generally are taxable income to the
participant. Distributions from a Plan to a participant prior to the time the
participant reaches age 59 1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS. Participants
should consult their tax advisers concerning the timing and consequences of
distributions from an Eligible Plan.

Net asset value is normally determined as of 4:15 p.m. (Eastern Standard Time)
on each day during which the New York Stock Exchange is open for trading. Net
asset value per share is computed by dividing the value of the Portfolio's net
assets (i.e., the value of its assets less liabilities) by the total number of
shares outstanding. Equity securities typically are valued based on market
value, or where market quotations are not readily available, based on fair value
as determined in good faith by the Board. Debt securities having remaining
maturities of 60 days or less are valued on an amortized cost basis unless the
Board determines that such method does not represent fair value. Other debt
securities are valued using available market quotations or at fair value which
may be determined by one or more pricing services. For further information
regarding the methods employed in valuing the Portfolio's investments, see
"Determination of Net Asset Value" in the Statement of Additional Information.

OTHER INFORMATION

16
<PAGE>
APPENDIX

The Portfolio may (a) purchase and sell exchange traded and over the counter
("OTC") put and call options on fixed income securities or indices of fixed
income securities, (b) purchase and sell futures contracts on fixed income
securities and indices of fixed income securities, and (c) purchase and sell put
and call options on futures contracts on fixed income securities and indices of
fixed income securities.

The Portfolio may use futures contracts and options for hedging and risk
management purposes. See "RISK MANAGEMENT" in the Statement of Additional
Information. The Portfolio may not use futures and options for speculation.

The Portfolio may utilize options and futures contracts to manage its exposure
to changing interest rates and/or security prices. Some options and futures
strategies, including selling futures contracts and buying puts, tend to hedge
the Portfolio's investments against price fluctuations. Other strategies,
including buying futures contracts, writing puts and calls, and buying calls,
tend to increase market exposure. Options and futures contracts may be combined
with each other or with forward contracts in order to adjust the risk and return
characteristics of the Portfolio's overall strategy in a manner deemed
appropriate to the Adviser and consistent with the Portfolio's objective and
policies. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and close
out.

The use of options and futures is a highly specialized activity which involves
investment strategies and risks different from those associated with ordinary
portfolio securities transactions, and there can be no guarantee that their use
will increase the Portfolio's return. While the use of these instruments by the
Portfolio may reduce certain risks associated with owning its portfolio
securities, these techniques themselves entail certain other risks. If the
Adviser applies a strategy at an inappropriate time or judges market conditions
or trends incorrectly, options and futures strategies may lower the Portfolio's
return. Certain strategies limit the Portfolio's possibilities to realize gains
as well as limit its exposure to losses. The Portfolio also could experience
losses if the prices of its options and futures positions were poorly correlated
with its other investments, or if it could not close out its positions because
of an illiquid secondary market. In addition, the Portfolio will incur
transaction costs, including trading commissions and option premiums, in
connection with its futures and options transactions and these transactions
could significantly increase the Portfolio's turnover rate.

The Portfolio will not purchase or sell (write) futures contracts, options, or
futures contracts or commodity options for risk management purposes if, as a
result, the aggregate initial margin and options premiums required to establish
these positions exceed 5% of the Portfolio's net asset value.

OPTIONS

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio
obtains the right (but not the obligation) to sell the instrument underlying the
option at a fixed strike price. In return for this right, the Portfolio pays the
current market price for the option (known as the option premium). Options have
various types of underlying instruments, including specific securities, indexes
of securities, indexes of securities prices, and futures contracts. The
Portfolio may terminate its position in a put option it has purchased by
allowing it to expire or by exercising the option. The Portfolio also may close
out a put option position by entering into an offsetting transaction, if a
liquid market exists. If the option is allowed to expire, the Portfolio will
lose the entire premium it paid. If the Portfolio exercises a put option on a
security, it will sell the instrument underlying the option at the strike price.
If the Portfolio exercises an

A-1
<PAGE>
option on an index, settlement is in cash and does not involve the actual sale
or securities. If an option is American Style, it may be exercised on any day up
to its expiration date. A European style option may be exercised only on its
expiration date.

The buyer of a typical put option can expect to realize a gain if the price of
the underlying instrument falls substantially. However, if the price of the
instrument underlying the option does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss (limited to the
amount of the premium paid, plus related transaction costs).

The features of call options are essentially the same as those of put options,
except that the purchaser of a call option obtains the right to purchase, rather
than sell, the instrument underlying the option at the option's strike price. A
call buyer typically attempts to participate in potential price increases of the
instrument underlying the option with risk limited to the cost of the option if
security prices fall. At the same time, the buyer can expect to suffer a loss if
security prices do not rise sufficiently to offset the cost of the option.

SELLING (WRITING) PUT AND CALL OPTIONS. When the Portfolio writes a put option,
it takes the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the Portfolio assumes the obligation to pay
the strike price for the instrument underlying the option if the other party to
the option chooses to exercise it. The Portfolio may seek to terminate its
position in a put option it writes before exercise by purchasing an offsetting
option in the market at its current price. However, if the market is not liquid
for a put option the Portfolio has written, the Portfolio must continue to be
prepared to pay the strike price while the option is outstanding, regardless of
price changes, and must continue to post margin as discussed below.

If the price of the underlying instrument rises, a put writer would generally
expect to profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it is likely
that the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would expect to
suffer a loss. However, this loss should be less than the loss from purchasing
and holding the underlying instrument directly, because the premium received for
writing the option should offset a portion of the decline.

Writing a call option obligates the Portfolio to sell or deliver the option's
underlying instrument in return for the strike price upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium a call writer offsets part of the effect of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

The writer of an exchange traded put or call option on a security, an index of
securities or a futures contract is required to deposit cash or securities or a
letter of credit as margin and to make mark to market payments of variation
margin as the position becomes unprofitable.

OPTIONS ON INDICES. The Portfolio is permitted to enter into options
transactions may purchase and sell (write) put and call options on any
securities index based on securities in which the Portfolio may invest. Options
on securities indices are similar to options on securities, except that the
exercise of securities index

A-2
<PAGE>
options are settled by cash payment and does not involve the actual purchase or
sale of securities. In addition, these options are designed to reflect price
fluctuations in a group of securities or segment of the securities market rather
than price fluctuations in a single security. The Portfolio, in purchasing or
selling index options, is subject to the risk that the value of its portfolio
securities may not change as much as an index because the Portfolio's
investments generally will not match the composition of an index.

For a number of reasons, a liquid market may not exist and thus the Portfolio
may not be able to close out an option position that it has previously entered
into. When the Portfolio purchases an OTC option, it will be relying on its
counterparty to perform its obligations, and the Portfolio may incur additional
losses if the counterparty is unable to perform.

FUTURES CONTRACTS

When the Portfolio purchases a futures contract, it agrees to purchase a
specified quantity of an underlying instrument at a specified future date or to
make a cash payment based on the value of a securities index. When the Portfolio
sells a futures contract, it agrees to sell a specified quantity of the
underlying instrument at a specified future date or to receive a cash payment
based on the value of a securities index. The price at which the purchase and
sale will take place is fixed when the Portfolio enters into the contract.
Futures can be held until their delivery dates or the position can be (and
normally is) closed out before then. There is no assurance, however, that a
liquid market will exist when the Portfolio wishes to close out a particular
position.

When the Portfolio purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase the Portfolio's exposure to positive and negative price fluctuations in
the underlying instrument, much as if it had purchased the underlying instrument
directly. When the Portfolio sells a futures contract, by contrast, the value of
its futures position will tend to move in a direction contrary to the value of
the underlying instrument. Selling futures contracts, therefore, will tend to
offset both positive and negative market price changes, much as if the
underlying instrument has been sold.

The purchaser or seller of a futures contract is not required to deliver or pay
for the underlying instrument unless the contract is held until the delivery
date. However, when the Portfolio buys or sells a futures contract it will be
required to deposit "initial margin" with its custodian in a segregated account
in the name of its futures broker, known as a futures commission merchant
("FCM"). Initial margin deposits are typically equal to a small percentage of
the contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments equal to
the change in value on a daily basis. The party that has a gain may be entitled
to receive all or a portion of this amount. The Portfolio may be obligated to
make payments of variation margin at a time when it is disadvantageous to do so.
Furthermore, it may not always be possible for the Portfolio to close out its
futures positions. Until it closes out a futures position, the Portfolio will be
obligated to continue to pay variation margin. Initial and variation margin
payments do not constitute purchasing on margin for purposes of the Portfolio's
investment restrictions. In the event of the bankruptcy of an FCM that holds
margin on behalf of the Portfolio, the Portfolio may be entitled to return of
margin owed to it only in proportion to the amount received by FCM's other
customers, potentially resulting in losses to the Portfolio.

The Portfolio will segregate liquid assets in connection with its use of options
and futures contracts to the extent required by the staff of the Securities and
Exchange Commission. Securities held in a segregated

A-3
<PAGE>
account cannot be sold while the futures contract or option is outstanding,
unless they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Portfolio's assets
could impede portfolio management or the Portfolio's ability to meet redemption
requests or other current obligations.

For further information about the Portfolio's use of futures and options and a
more detailed discussion of associated risks, see "INVESTMENT OBJECTIVES AND
POLICIES" in the Statement of Additional Information.

A-4
<PAGE>

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

JPM Series Trust II
JPM Bond Portfolio

PROSPECTUS

JPM Series Trust II
JPM Equity Portfolio
60 State Street
Boston, Massachusetts 02109
1-800-221-7930

JPM Equity Portfolio (the "Portfolio") is a separate diversified portfolio of
JPM Series Trust II, an open-end management investment company organized as a
Delaware Business Trust (the "Trust"). The Portfolio seeks to provide a high
total return from a portfolio comprised of selected equity securities.

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

The Portfolio permits investments in any nation, which involve special
considerations and risks.

THE DATE OF THIS PROSPECTUS IS JANUARY 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Annual Operating Expenses......................... 1
Financial Highlights.............................. 2
Performance and Yield Information................. 3
The Portfolio..................................... 4
Investment Objective and Policies................. 4
Investment Objective............................ 4
Investment Policies............................. 5
Risk Factors.................................... 6
Additional Investment Information................. 6
Convertible Securities.......................... 6
When-Issued and Delayed Delivery Securities..... 6
Repurchase Agreements........................... 6
Loans of Portfolio Securities................... 7
Reverse Repurchase Agreements................... 7

Foreign Investment Information.................. 7
Foreign Currency Exchange Transactions.......... 8
Illiquid Investments, Privately Placed and Other
Unregistered Securities........................ 9
Futures and Options Transactions................ 9
Money Market Instruments........................ 9
Portfolio Turnover................................ 10
Investment Restrictions........................... 10
Management of the Trust and Portfolio............. 10
Capital Shares.................................... 12
Taxes and Dividends............................... 13
Offering and Redemption of Shares................. 14
Other Information................................. 14
Appendix.......................................... A-1
</TABLE>

<TABLE>
<S> <C>
Management Fees................................................................. .40%
Other Expenses.................................................................. .50%
----
Total Portfolio Operating Expenses.............................................. .90%
</TABLE>

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:

<TABLE>
<S> <C>
1 Year.......................................................................... $ 9
3 Years......................................................................... $ 29
5 Years......................................................................... $ 50
10 Years........................................................................ $111
</TABLE>

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by the Portfolio, the payment of which will reduce
investors' annual return. The information in the foregoing table has been
restated to reflect an agreement by Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), an affiliate of Morgan, to reimburse the Trust to the
extent certain expenses exceed in any fiscal year .90% of the Portfolio's
average daily net assets. The information in the foregoing table does not
reflect deduction of account fees and charges to separate accounts or related
insurance policies that may be imposed by participating insurance companies. For
a further description of the various costs and expenses incurred in the
operation of the Portfolio, as well as expense reimbursement or waiver
arrangements, see "Management of the Trust and Portfolio."

1
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Six Month
January 3, 1995 Period Ended
through June 30, 1996
December 31, 1995 (Unaudited)
----------------- -------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 10.00 $ 12.63
----------------- -------------
Income From Investment Operations
Net investment income..................................... 0.12 0.13
Net realized and unrealized gains (losses) on securities &
foreign currency......................................... 3.26 1.03
----------------- -------------
Total from investment operations........................ 3.38 1.16
----------------- -------------
Less Distributions to Shareholders
Dividends from net investment income...................... (0.12)
Distributions from net capital gains...................... (0.63) (0.20)
----------------- -------------
Total distributions......................................... (0.75) (0.20)
----------------- -------------
Net asset value, end of period.............................. $ 12.63 $ 13.59
----------------- -------------
----------------- -------------
Total Return(2)............................................. 33.91% 9.15%
----------------- -------------
----------------- -------------
Ratios to average net assets:
(Annualized)
Expenses(3)............................................... 0.90% 0.90%
Net investment income..................................... 1.48% 2.05%
Portfolio turnover rate..................................... 65.60% 42.11%
Average commission rate paid................................ N/A $ 0.0553
Net assets, at end of period................................ $4,144,458 $5,096,578
</TABLE>

- ---------
(1) From January 3, 1995 (commencement of operations) to December 31, 1996,
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a
wholly-owned subsidiary of Chubb Life Insurance Company of America ("Chubb
Life"), served as the Portfolio's investment manager, and Morgan Guaranty served
as the Portfolio's sub-investment adviser. Effective January 1, 1997, Morgan
began serving as the Portfolio's investment adviser. See "OTHER INFORMATION."
(2) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges to separate accounts or
related insurance policies, which, if reflected, would reduce the Portfolio's
total return for the period indicated. Investment returns and principal values
will fluctuate and shares, when redeemed, may be worth more or less than their
original cost. Total returns for periods of less than one year have not been
annualized.
(3) All related party fees have been waived and all other expenses of the
Portfolio have been assumed in part for 1996 and 1995 by Chubb Life and Morgan
Guaranty. Had the fees not been waived and expenses not been assumed, the ratios
of the Portfolio's expenses to average net assets would have been 2.34% in 1996
and 2.70% in 1995.

2
<PAGE>
PERFORMANCE AND YIELD INFORMATION

Set forth below is historical performance information for the Portfolio and for
an appropriate securities index with respect to the Portfolio. In addition, set
forth below is hypothetical performance information derived from historical
composite performance of all Private Accounts managed by Morgan which have
investment objectives, policies and strategies substantially similar to those of
the Portfolio and, thus, is deemed relevant to Portfolio investors. THE
HYPOTHETICAL PERFORMANCE INFORMATION OF THE PRIVATE ACCOUNTS OF THE ACTIVE
EQUITY COMPOSITE DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE PORTFOLIO
AND SHOULD NOT BE INTERPRETED AS INDICATIVE OF THE FUTURE PERFORMANCE OF THE
PORTFOLIO. Moreover, the Private Accounts are not registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and, therefore, are
not subject to certain investment restrictions, diversification requirements and
other restrictions that are imposed by the 1940 Act and the Internal Revenue
Service, which, if imposed, might have adversely affected the performance of the
Private Accounts.

3
<PAGE>
total returns for a stated time period have been annualized over such period.
These returns are time-weighted rates of return which include all accrued income
and realized and unrealized gains or losses, but do not reflect the deduction of
investment advisory fees actually charged to the Private Accounts.

<TABLE>
<CAPTION>
Average Annual Total Return
------------------------------------------
5 Years or 10 Years or
1 Year Since Inception Since Inception
------ --------------- ---------------
<S> <C> <C> <C>
JPM Equity Portfolio
Period ended June 30, 1996................................ 22.43% 29.00%* N/A
Period ended December 31, 1995............................ 33.91%* 33.91%* N/A
Active Equity Composite
Period ended December 31, 1995............................ 32.47% 17.64% 15.45%
Standard & Poor's 500 Index**
Period ended December 31, 1995............................ 37.58% 16.59% 14.88%
</TABLE>

- ---------
* Commenced operations January 3, 1995.
** The Standard & Poor's 500-Registered Trademark- Index is a market
capitalization-weighted index of 500 common stocks, designed to measure
performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries.

THE PORTFOLIO

Portfolio shares are both offered and redeemed at their net asset value without
the addition of any sales load or redemption charge. See "OFFERING AND
REDEMPTION OF SHARES."

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE: The Portfolio's investment objective is to provide a high
total return from a portfolio comprised of selected equity securities. Total
return will consist of realized and unrealized capital gains and losses plus
income less expenses. The Portfolio invests primarily in the common stock of
U.S. corporations with market capitalizations above $1.5 billion.

4
<PAGE>
The Portfolio is designed for investors who want an actively managed portfolio
of selected equity securities that seeks to outperform the S&P 500 Index.

INVESTMENT POLICIES: The Adviser seeks to enhance the Portfolio's total return
relative to that of the universe of large- and medium-sized U.S. corporations,
typically represented by the S&P 500 Index, through fundamental analysis,
systematic stock valuation and disciplined portfolio construction. Based on
internal fundamental research, the Adviser uses a systematic stock selection
process to rank companies within economic sectors according to their relative
value. From the universe of securities this model shows as undervalued, the
Adviser selects stocks for the Portfolio based on a variety of criteria
including the company's managerial strength, prospects for growth and
competitive position. The Adviser may under- or over-weight selected economic
sectors against the S&P 500 Index's sector weightings to seek to enhance the
Portfolio's total return or reduce the fluctuation in its market value relative
to the Index.

The Portfolio intends to manage its portfolio actively in pursuit of its
investment objective. The Portfolio does not intend to respond to short-term
market fluctuations or to acquire securities for the purpose of short-term
trading; however, it may take advantage of short-term trading opportunities that
are consistent with its objective. To the extent the Portfolio engages in short
term trading it may incur increased transaction costs.

EQUITY INVESTMENTS. During normal market conditions, the Adviser intends to keep
the Portfolio essentially fully invested with at least 65% of the Portfolio's
assets invested in equity securities, consisting of common stocks and other
securities with equity characteristics such as preferred stocks, warrants,
rights and convertible securities. The Portfolio's primary equity investments
are the common stocks of large- and medium-sized U.S. corporations and similar
securities of foreign corporations. The common stock in which the Portfolio may
invest includes the common stock of any class or series or any similar equity
interest, such as trust or limited partnership interests. These equity
investments may or may not pay dividends and may or may not carry voting rights.
The Portfolio invests in securities listed on a securities exchange or traded in
an over-the-counter market, and may invest in certain restricted or unlisted
securities.

FOREIGN INVESTMENTS. The Portfolio may invest in equity securities of foreign
corporations which may include American Depositary Receipts ("ADRs"). However,
the Portfolio does not expect to invest more than 30% of its assets at the time
of purchase in securities of foreign issuers, nor does it expect more than 10%
of its assets to be invested in securities of foreign issuers not listed on a
national securities exchange or not denominated or principally traded in U.S.
dollars. For further information on foreign investments and foreign currency
exchange transactions, see "ADDITIONAL INVESTMENT INFORMATION."

5
<PAGE>
The Portfolio also may invest in securities on a when-issued or delayed delivery
basis, enter into repurchase and reverse repurchase agreements, loan its
portfolio securities, purchase certain privately placed securities and money
market instruments (see "Money Market Instruments" for more information
concerning the types of money market instruments in which the Portfolio may
invest), and use options on securities and securities indices, futures contracts
and options on futures contracts for hedging and risk management purposes. For a
discussion of these investments and investment techniques, see "ADDITIONAL
INVESTMENT INFORMATION."

RISK FACTORS: The foreign securities and ADRs in which the Portfolio may invest
involve special considerations and risks. See "ADDITIONAL INVESTMENT
INFORMATION" below. The prices of the types of securities usually purchased by
the Portfolio will tend to fluctuate. As a result, the net asset value of the
Portfolio may experience greater short-term and long-term variations than funds
that invest primarily in fixed income securities.

ADDITIONAL INVESTMENT INFORMATION

REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Board. In a repurchase agreement, the Portfolio buys a
security from a seller that has agreed to repurchase it at a mutually agreed
upon date and price, reflecting the interest rate effective for the term of the
agreement. The term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money by
the Portfolio to the seller. The Portfolio always receives securities as
collateral with a market value at least equal to the purchase price plus accrued
interest and this value is maintained during the term of the agreement. If the
seller defaults and the collateral value declines, the Portfolio might incur a
loss. If bankruptcy proceedings are commenced with respect to the seller, the
Portfolio's realization upon the

6
<PAGE>
disposition of collateral may be delayed or limited. Investments in certain
repurchase agreements and certain other investments which may be considered
illiquid are limited. See "Illiquid Investments, Privately Placed and Other
Unregistered Securities" below.

LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities. The Portfolio 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 Portfolio 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 Portfolio
any income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally five 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 is for the
account of the Portfolio and its shareholders. The Portfolio may pay reasonable
finders' and custodial fees in connection with a loan. In addition, the
Portfolio will consider all facts and circumstances including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee, or affiliate of the
Trust, the Adviser or Distributor, unless otherwise permitted by applicable law.

7
<PAGE>
In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of domestic security exchanges. Accordingly, the Portfolio's foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. Moreover, the settlement
periods for foreign securities, which are often longer than those for securities
of U.S. issuers, may affect portfolio liquidity. In buying and selling
securities on foreign exchanges, purchasers normally pay fixed commissions that
are generally higher than the negotiated commissions charged in the U.S. In
addition, there is generally less government supervision and regulation of
securities exchanges, brokers and issuers located in foreign countries than in
the U.S.

8
<PAGE>
buy or sell; to hedge the U.S. dollar value of securities the Portfolio already
owns, particularly if it expects a decrease in the value of the currency in
which the foreign security is denominated; or to gain or reduce exposure to the
foreign currency in an attempt to enhance return.

As a hedging strategy, although these transactions are intended to minimize the
risk of loss due to a decline in the value of the hedged currency, at the same
time they tend to limit any potential gain that might be realized should the
value of the hedged currency increase. In addition, forward contracts that
convert a foreign currency into another foreign currency will cause the
Portfolio to assume the risk of fluctuations in the value of the currency
purchased vis-a-vis the hedged currency and the U.S. dollar. The precise
matching of the forward contract amounts and the value of the securities
involved will not generally be possible because the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of such securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging or
investment strategy is highly uncertain.

MONEY MARKET INSTRUMENTS. The Portfolio is permitted to invest in money market
instruments, although it intends to stay invested in equity securities to the
extent practical in light of its investment objective and long-term investment
perspective. The Portfolio may make money market investments pending other
investment or settlement, for liquidity or in adverse market conditions. The
money market investments permitted for the Portfolio include obligations of the
U.S. Government and its agencies and instrumentalities, other debt securities,
commercial paper, bank obligations and repurchase agreements. For more detailed
information about these money market instruments, see "INVESTMENT OBJECTIVES AND
POLICIES" in the Statement of Additional Information.

9
<PAGE>
PORTFOLIO TURNOVER

Portfolio turnover for the Portfolio may vary from year to year or within a year
depending upon economic and business conditions. Under normal market conditions,
the Portfolio's annual portfolio turnover rate is not expected to exceed 100%.
The annual portfolio turnover rate for the Portfolio in 1995 was approximately
66%.

INVESTMENT RESTRICTIONS

MANAGEMENT OF THE TRUST AND PORTFOLIO

Morgan uses a sophisticated, disciplined, collaborative process for managing all
asset classes. The following persons are primarily responsible for the
day-to-day management and implementation of Morgan's process for the Portfolio
(the inception date of each person's responsibility for the Portfolio and their
business experience for the past five years are indicated parenthetically):
William B. Petersen, Managing Director (since January, 1995, employed by Morgan
since prior to 1988) and William M. Riegel, Jr., Managing Director (since
January, 1995, employed by Morgan since prior to 1988).

As compensation for Morgan's services under the Investment Advisory Agreement,
the Trust has agreed to pay Morgan a monthly fee at the annual rate of .40% of
the Portfolio's average daily net assets.

10
<PAGE>
including services related to taxes, financial statements, calculation of
Portfolio performance data, oversight of service providers, certain regulatory
and Board matters, and shareholder services. Morgan Guaranty, a wholly-owned
subsidiary of J.P. Morgan, is a New York trust company which conducts a general
banking and trust business and maintains its principal office at 60 Wall Street,
New York, New York 10260.

As compensation for Morgan Guaranty's services under the Administrative Services
Agreement, the Trust has agreed to pay Morgan Guaranty a monthly fee at the
annual rate of .50% of the Portfolio's average daily net assets.

Under the terms of the Administrative Services Agreement, Morgan Guaranty may
delegate one or more of its responsibilities to other entities at Morgan
Guaranty's expense.

From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb
Investment Advisory served as the Portfolio's investment manager and Morgan
Guaranty served as sub-investment adviser. The compensation to Morgan Guaranty,
as sub-investment adviser, was paid directly from the investment management fees
paid by the Trust to Chubb Investment Advisory. For the period January 3, 1995
(commencement of operations) through December 31, 1995, all investment
management fees payable by the Portfolio to Chubb Investment Advisory totaled
.60% of the Portfolio's average daily net assets. For the period January 3, 1995
through December 31, 1995, sub-investment advisory fees payable by Chubb
Investment Advisory to Morgan Guaranty totaled .40% of the Portfolio's average
daily net assets. Because a portion of the Portfolio's fees and expenses were
reimbursed, the ratio of the Portfolio's operating expenses to average net
assets for such period was .90%. Had a portion of the Portfolio's fees and
expenses not been reimbursed, the ratio of the Portfolio's operating expenses to
average net assets for such period would have been 2.70%.

11
<PAGE>
responsible for: (i) providing office space, equipment and clerical personnel
for maintaining the organization and books and records of the Trust; (ii)
providing officers for the Trust; (iii) preparing and filing documents required
in connection with the Trust's state securities law registrations; (iv)
reviewing and filing Trust marketing and sales literature; (v) filing regulatory
documents and mailing communications to Trustees and investors; and (vi)
maintaining related books and records.

FDI is a wholly-owned indirect subsidiary of Boston Institutional Group, Inc.
FDI currently provides administration and distribution services for a number of
other registered investment companies.

For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.

CAPITAL SHARES

As a Delaware Business Trust, the Trust is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust is, however, required to hold shareholder meetings for such
purposes as, for example: (i) approving certain agreements as required by the
1940 Act; (ii) changing fundamental investment objectives and restrictions of
the Portfolio; and (iii) filling vacancies on the Board in the event that less
than a majority of the Trustees were elected by shareholders. The Trust expects
that there will be no meetings of shareholders for the purpose of electing
trustees unless and until such time as less than a majority of the trustees
holding office have been elected by shareholders. At such time, the trustees
then in office will call a shareholder meeting for the election of trustees. In
addition, holders of record of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee from office by a vote cast in person or
by proxy at a shareholder meeting called for that purpose at the request of
holders of 10% or more of the outstanding shares of the Trust. The Trust has the
obligation to assist in any such shareholder communications. Except as set forth
above, Trustees will continue in office and may appoint successor Trustees.

12
<PAGE>
Under current law, Eligible Plans are not required to provide Plan participants
with the right to give voting instructions. For information on voting rights,
Plan participants should consult their Plan's administrator or trustee.

TAXES AND DIVIDENDS

Dividends paid by the Trust to Eligible Plans ordinarily will not be subject to
taxation until the proceeds are distributed from the Plan. The Trust will not
report dividends paid to Plans to the Internal Revenue Service ("IRS").
Generally, distributions from Eligible Plans, except those representing returns
of non-deductible contributions thereto, will be taxable as ordinary income and,
if made prior to the time the participant reaches age 59 1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion of the
distribution. If the distribution from an Eligible Plan (other than certain
governmental or church plans) for any taxable year following the year in which
the participant reaches age 70 1/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or custodian of
such a Plan will be responsible for

13
<PAGE>
reporting distributions from the Plan to the IRS. Participants in Eligible Plans
will receive a disclosure statement describing the consequences of a
distribution from the Plan from the administrator, trustee or custodian of the
Plan prior to receiving the distribution. Moreover, certain contributions to an
Eligible Plan in excess of the amounts permitted by law may be subject to an
excise tax.

OFFERING AND REDEMPTION OF SHARES

Distributions from Eligible Plans, except distributions representing returns of
non-deductible contributions to the Plan, generally are taxable income to the
participant. Distributions from a Plan to a participant prior to the time the
participant reaches age 59 1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS. Participants
should consult their tax advisers concerning the timing and consequences of
distributions from an Eligible Plan.

OTHER INFORMATION

14
<PAGE>
APPENDIX

The Portfolio may (a) purchase and sell exchange traded and over the counter
("OTC") put and call options on equity securities or indices of equity
securities, (b) purchase and sell futures contracts on indices of equity
securities, and (c) purchase and sell put and call options on futures contracts
on indices of equity securities.

OPTIONS

A-1
<PAGE>
security, it will sell the instrument underlying the option at the strike price.
If the Portfolio exercises an option on an index, settlement is in cash and does
not involve the actual sale or securities. If an option is American Style, it
may be exercised on any day up to its expiration date. A European style option
may be exercised only on its expiration date.

A-2
<PAGE>
Options on securities indices are similar to options on securities, except that
the exercise of securities index options are settled by cash payment and does
not involve the actual purchase or sale of securities. In addition, these
options are designed to reflect price fluctuations in a group of securities or
segment of the securities market rather than price fluctuations in a single
security. The Portfolio, in purchasing or selling index options, is subject to
the risk that the value of its portfolio securities may not change as much as an
index because the Portfolio's investments generally will not match the
composition of an index.

FUTURES CONTRACTS

A-3
<PAGE>
The Portfolio will segregate liquid assets in connection with its use of options
and futures contracts to the extent required by the staff of the Securities and
Exchange Commission. Securities held in a segregated account cannot be sold
while the futures contract or option is outstanding, unless they are replaced
with other suitable assets. As a result, there is a possibility that segregation
of a large percentage of the Portfolio's assets could impede portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.

A-4
<PAGE>

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

JPM Series Trust II
JPM Equity Portfolio

PROSPECTUS
JPM Series Trust II
JPM Small Company Portfolio
60 State Street
Boston, Massachusetts 02109
1-800-221-7930

JPM Small Company Portfolio (the "Portfolio") is a separate diversified
portfolio of JPM Series Trust II, an open-end management investment company
organized as a Delaware Business Trust (the "Trust"). The Portfolio seeks to
provide a high total return from a portfolio of equity securities of small
companies.

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

The Portfolio permits investments in any nation, which involve special
considerations and risks.

THE DATE OF THIS PROSPECTUS IS JANUARY 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Annual Operating Expenses......................... 1
Financial Highlights.............................. 2
Performance and Yield Information................. 3
The Portfolio..................................... 4
Investment Objective and Policies................. 4
Investment Objective............................ 4
Investment Policies............................. 5
Risk Factors.................................... 6
Additional Investment Information................. 6
Convertible Securities.......................... 6
When-Issued and Delayed Delivery Securities..... 6
Repurchase Agreements........................... 6
Loans of Portfolio Securities................... 7
Reverse Repurchase Agreements................... 7

Foreign Investment Information.................. 7
Foreign Currency Exchange Transactions.......... 8
Illiquid Investments, Privately Placed and
Other Unregistered Securities.................. 9
Futures and Options Transactions................ 9
Money Market Instruments........................ 9
Portfolio Turnover................................ 10
Investment Restrictions........................... 10
Management of the Trust and Portfolio............. 10
Capital Shares.................................... 12
Taxes and Dividends............................... 13
Offering and Redemption of Shares................. 14
Other Information................................. 14
Appendix.......................................... A-1
</TABLE>

<TABLE>
<S> <C>
Management Fees.......................................................... .60%
Other Expenses........................................................... .55%
-----
Total Portfolio Operating Expenses....................................... 1.15%
</TABLE>

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................................................................ $ 12
3 Years............................................................... $ 37
5 Years............................................................... $ 63
10 Years.............................................................. $140

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by the Portfolio, the payment of which will reduce
investors' annual return. The information in the foregoing table has been
restated to reflect an agreement by Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), an affiliate of Morgan, to reimburse the Trust to the
extent certain expenses exceed in any fiscal year 1.15% of the Portfolio's
average daily net assets. The information in the foregoing table does not
reflect deduction of account fees and charges to separate accounts or related
insurance policies that may be imposed by participating insurance companies. For
a further description of the various costs and expenses incurred in the
operation of the Portfolio, as well as expense reimbursement or waiver
arrangements, see "Management of the Trust and Portfolio."

1
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Six Month
January 3, 1995 Period Ended
through June 30, 1996
December 31, 1995 (unaudited)
------------------ -------------
<S> <C> <C>
Net asset value, beginning of period........................................... $ 10.00 $ 11.83
---------- -------------
Income From Investment Operations
Net investment income........................................................ 0.11 0.04
Net realized and unrealized gains (losses) on securities & foreign
currency.................................................................... 3.18 1.27
---------- -------------
Total from investment operations........................................... 3.29 1.31
---------- -------------
Less Distributions to Shareholders
Dividends from net investment income......................................... (0.11)
Distributions from net capital gains......................................... (1.35) (0.46)
---------- -------------
Total distributions............................................................ (1.46) (0.46)
---------- -------------
Net asset value, end of period................................................. $ 11.83 $ 12.68
---------- -------------
---------- -------------
Total Return(2)................................................................ 32.91% 11.20%
---------- -------------
---------- -------------
Ratios to average net assets:
(Annualized)
Expenses(3).................................................................. 1.15% 1.15%
Net investment income........................................................ .99% .62%
Portfolio turnover rate........................................................ 100.43% 54.99%
Average commission rate paid................................................... N/A $0.0507
Net assets, at end of period................................................... $ 2,536,258 $ 3,434,837
</TABLE>

- ---------
(1) From January 3, 1995 (commencement of operations) to December 31, 1996,
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a
wholly-owned subsidiary of Chubb Life Insurance Company of America ("Chubb
Life"), served as the Portfolio's investment manager, and Morgan Guaranty served
as the Portfolio's sub-investment adviser. Effective January 1, 1997, Morgan
began serving as the Portfolio's investment adviser. See "OTHER INFORMATION."
(2) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges to separate accounts or
related insurance policies, which, if reflected, would reduce the Portfolio's
total return for the period indicated. Investment returns and principal values
will fluctuate and shares, when redeemed, may be worth more or less than their
original cost. Total returns for periods of less than one year have not been
annualized.
(3) All related party fees have been waived and all other expenses of the
Portfolio have been assumed in part for 1996 and 1995 by Chubb Life and Morgan
Guaranty. Had the fees not been waived and expenses not been assumed, the ratios
of the Portfolio's expenses to average net assets would have been 2.85% in 1996
and 3.22% in 1995.

2
<PAGE>
PERFORMANCE AND YIELD INFORMATION

Set forth below is historical performance information for the Portfolio and for
an appropriate securities index with respect to the Portfolio. In addition, set
forth below is hypothetical performance information derived from historical
composite performance of all Private Accounts managed by Morgan which have
investment objectives, policies and strategies substantially similar to those of
the Portfolio and, thus, is deemed relevant to Portfolio investors. THE
HYPOTHETICAL PERFORMANCE INFORMATION OF THE PRIVATE ACCOUNTS OF THE SMALL
COMPANY COMPOSITE DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF THE PORTFOLIO
AND SHOULD NOT BE INTERPRETED AS INDICATIVE OF THE FUTURE PERFORMANCE OF THE
PORTFOLIO. Moreover, the Private Accounts are not registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and, therefore, are
not subject to certain investment restrictions, diversification requirements and
other restrictions that are imposed by the 1940 Act and the Internal Revenue
Service, which, if imposed, might have adversely affected the performance of the
Private Accounts.

3
<PAGE>
are time-weighted rates of return which include all accrued income and realized
and unrealized gains or losses, but do not reflect the deduction of investment
advisory fees actually charged to the Private Accounts.

<TABLE>
<CAPTION>
Average Annual Total Return
------------------------------------------
<S> <C> <C> <C>
5 Years or 10 Years or
Since Since
1 Year Inception Inception
---------- -------------- --------------
JPM Small Company Portfolio
Period ended June 30, 1996............................................ 25.70% 29.97%* N/A
Period ended December 31, 1995........................................ 32.91%* 32.91%* N/A
Small Company Composite
Period ended December 31, 1995........................................ 35.05% 20.51% 11.78%
Russell 2000-Registered Trademark- Index**
Period ended December 31, 1995........................................ 28.44% 20.99% 11.32%
</TABLE>

- ---------
* Commenced operations January 3, 1995.
** The Russell 2000-Registered Trademark- Index is composed of 2,000 common
stocks of U.S. companies with market capitalizations ranging between $23 million
and $2.23 billion as of September 30, 1996.

THE PORTFOLIO

Portfolio shares are both offered and redeemed at their net asset value without
the addition of any sales load or redemption charge. See "OFFERING AND
REDEMPTION OF SHARES."

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE: The Portfolio's investment objective is to provide a high
total return from a portfolio of equity securities of small companies. Total
return will consist of realized and unrealized capital gains and losses plus
income less expenses. The Portfolio invests at least 65% of the value of its
total assets in the common stock of small U.S. companies primarily with market
capitalizations less than $1 billion.

4
<PAGE>
The Portfolio is designed for investors who are willing to assume the somewhat
higher risk of investing in small companies in order to seek a higher return
over time than might be expected from a portfolio of stocks of large companies.

INVESTMENT POLICIES: The Adviser seeks to enhance the Portfolio's total return
relative to that of the U.S. small company universe. To do so, the Adviser uses
fundamental research, systematic stock valuation and a disciplined portfolio
construction process. The Adviser continually screens the universe of small
capitalization companies to identify for further analysis those companies which
exhibit favorable characteristics such as significant and predictable cash flow
and high quality management. Based on this investment process, as well as
fundamental research, the Adviser ranks these companies within economic sectors
according to their relative value. The Adviser then selects for purchase the
most attractive companies within each economic sector.

The Adviser uses a disciplined portfolio construction process to seek to enhance
returns and reduce volatility in the market value of the Portfolio relative to
that of the U.S. small company universe, typically represented by the Russell
2000-Registered Trademark- Index. The disciplined portfolio construction process
involves continuously screening the small company universe and consists of three
basic steps: first, calculating each company's internal rate of return ("IRR")
based on projected cash flow; second, sorting those companies within twenty
economic sectors by IRR quintile rank; third, concentrating purchases in the top
three quintiles of each sector and selling fourth and fifth quintiles. Variance
in industry weights from the Russell 2000-Registered Trademark- are minimized to
ensure that stock selection is the principal source of excess return.

The Adviser believes that under normal market conditions the Portfolio will have
sector weightings comparable to that of the U.S. small company universe,
although it may under- or over-weight selected economic sectors. In addition, as
a company moves out of the market capitalization range of the small company
universe, it generally becomes a candidate for sale by the Portfolio.

The Portfolio intends to manage its investments actively to accomplish its
investment objective. Since the Portfolio has a long-term investment
perspective, it does not intend to respond to short-term market fluctuations or
to acquire securities for the purpose of short-term trading; however, it may
take advantage of short-term trading opportunities that are consistent with its
objective. To the extent the Portfolio engages in short-term trading it may
incur increased transaction costs.

EQUITY INVESTMENTS. During normal market conditions, the Adviser intends to
keep the Portfolio essentially fully invested with at least 65% of the
Portfolio's assets invested in equity securities, consisting of common stocks
and other securities with equity characteristics such as preferred stocks,
warrants, rights and convertible securities. The Portfolio's primary equity
investments are the common stocks of large- and medium-sized U.S. corporations
and similar securities of foreign corporations. The common stock in which the
Portfolio may invest includes the common stock of any class or series or any
similar equity interest, such as trust or limited partnership interests. These
equity investments may or may not pay dividends and may or may not carry voting
rights. The Portfolio invests in securities listed on a securities exchange or
traded in an over-the-counter market, and may invest in certain restricted or
unlisted securities.

5
<PAGE>
10% of its assets to be invested in securities of foreign issuers not listed on
a national securities exchange or not denominated or principally traded in U.S.
dollars. For further information on foreign investments and foreign currency
exchange transactions, see "ADDITIONAL INVESTMENT INFORMATION."

The Portfolio also may invest in securities on a when-issued or delayed delivery
basis, enter into repurchase and reverse repurchase agreements, loan its
portfolio securities, purchase certain privately placed securities and money
market instruments (see "Money Market Instruments" for more information
concerning the types of money market instruments in which the Portfolio may
invest), and use options on securities and securities indices, futures contracts
and options on futures contracts for hedging and risk management purposes. For a
discussion of these investments and investment techniques, see "ADDITIONAL
INVESTMENT INFORMATION."

ADDITIONAL INVESTMENT INFORMATION

6
<PAGE>
of the agreement. If the seller defaults and the collateral value declines, the
Portfolio might incur a loss. If bankruptcy proceedings are commenced with
respect to the seller, the Portfolio's realization upon the disposition of
collateral may be delayed or limited. Investments in certain repurchase
agreements and certain other investments which may be considered illiquid are
limited. See "Illiquid Investments, Privately Placed and Other Unregistered
Securities" below.

LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities. The Portfolio 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 Portfolio 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 Portfolio
any income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally five 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 is for the
account of the Portfolio and its shareholders. The Portfolio may pay reasonable
finders' and custodial fees in connection with a loan. In addition, the
Portfolio will consider all facts and circumstances including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee, or affiliate of the
Trust, the Adviser or Distributor, unless otherwise permitted by applicable law.

9
<PAGE>
PORTFOLIO TURNOVER

INVESTMENT RESTRICTIONS

MANAGEMENT OF THE TRUST AND PORTFOLIO

Morgan uses a sophisticated, disciplined, collaborative process for managing all
asset classes. The following persons are primarily responsible for the
day-to-day management and implementation of Morgan's process for the Portfolio
(the inception date of each person's responsibility for the Portfolio and their
business experience for the past five years are indicated parenthetically):
James B. Otness, Managing Director (since January, 1995, employed by Morgan
since prior to 1988) and Candice Eggerss, Vice President (since May, 1996,
employed by Weiss, Peck & Greer from June, 1993 to May, 1996 and Equitable
Capital Management prior to June, 1993).

As compensation for Morgan's services under the Investment Advisory Agreement,
the Trust has agreed to pay Morgan a monthly fee at the annual rate of .60% of
the Portfolio's average daily net assets.

10
<PAGE>
Under the terms of an Administrative Services Agreement, Morgan Guaranty
provides or arranges for the provision of certain financial and administrative
services and oversees fund accounting for the Trust, including services related
to taxes, financial statements, calculation of Portfolio performance data,
oversight of service providers, certain regulatory and Board matters, and
shareholder services. Morgan Guaranty, a wholly-owned subsidiary of J.P. Morgan,
is a New York trust company which conducts a general banking and trust business
and maintains its principal office at 60 Wall Street, New York, New York 10260.

As compensation for Morgan Guaranty's services under the Administrative Services
Agreement, the Trust has agreed to pay Morgan Guaranty a monthly fee at the
annual rate of .55% of the Portfolio's average daily net assets.

Under the terms of the Administrative Services Agreement, Morgan Guaranty may
delegate one or more of its responsibilities to other entities at Morgan
Guaranty's expense.

From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb
Investment Advisory served as the Portfolio's investment manager and Morgan
Guaranty served as sub-investment adviser. The compensation to Morgan Guaranty,
as sub-investment adviser, was paid directly from the investment management fees
paid by the Trust to Chubb Investment Advisory. For the period January 3, 1995
(commencement of operations) through December 31, 1995, all investment
management fees payable by the Portfolio to Chubb Investment Advisory totaled
.80% of the Portfolio's average daily net assets. For the period January 3, 1995
through December 31, 1995, sub-investment advisory fees payable by Chubb
Investment Advisory to Morgan Guaranty totaled .60% of the Portfolio's average
daily net assets. Because a portion of the Portfolio's fees and expenses were
reimbursed, the ratio of the Portfolio's operating expenses to average net
assets for such period was 1.15%. Had a portion of the Portfolio's fees and
expenses not been reimbursed, the ratio of the Portfolio's operating expenses to
average net assets for such period would have been 3.22%.

11
<PAGE>
The Trust's distributor and co-administrator is Funds Distributor, Inc. ("FDI"),
located at 60 State Street, Suite 1300, Boston, Massachusetts 02109. Under a
Co-Administration Agreement with the Trust, FDI is responsible for: (i)
providing office space, equipment and clerical personnel for maintaining the
organization and books and records of the Trust; (ii) providing officers for the
Trust; (iii) preparing and filing documents required in connection with the
Trust's state securities law registrations; (iv) reviewing and filing Trust
marketing and sales literature; (v) filing regulatory documents and mailing
communications to Trustees and investors; and (vi) maintaining related books and
records.

FDI is a wholly-owned indirect subsidiary of Boston Institutional Group, Inc.
FDI currently provides administration and distribution services for a number of
other registered investment companies.

For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.

CAPITAL SHARES

As a Delaware Business Trust, the Trust is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust is, however, required to hold shareholder meetings for such
purposes as, for example: (i) approving certain agreements as required by the
1940 Act; (ii) changing fundamental investment objectives and restrictions of
the Portfolio; and (iii) filling vacancies on the Board in the event that less
than a majority of the Trustees were elected by shareholders. The Trust expects
that there will be no meetings of shareholders for the purpose of electing
trustees unless and until such time as less than a majority of the trustees
holding office have been elected by shareholders. At such time, the trustees
then in office will call a shareholder meeting for the election of trustees. In
addition, holders of record of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee from office by a vote cast in person or
by proxy at a shareholder meeting called for that purpose at the request of
holders of 10% or more of the outstanding shares of the Trust. The Trust has the
obligation to assist in any such shareholder communications. Except as set forth
above, Trustees will continue in office and may appoint successor Trustees.

12
<PAGE>
instructions received from the owners of Policies. For further information on
voting rights, Policy owners should consult the applicable prospectus of the
separate account of the Participating Insurance Company. Under current law,
Eligible Plans are not required to provide Plan participants with the right to
give voting instructions. For information on voting rights, Plan participants
should consult their Plan's administrator or trustee.

TAXES AND DIVIDENDS

13
<PAGE>
the "minimum required distribution" for that taxable year, an excise tax equal
to 50% of the deficiency may be imposed by the IRS. The administrator, trustee
or custodian of such a Plan will be responsible for reporting distributions from
the Plan to the IRS. Participants in Eligible Plans will receive a disclosure
statement describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to an Eligible Plan in excess of
the amounts permitted by law may be subject to an excise tax.

OFFERING AND REDEMPTION OF SHARES

Distributions from Eligible Plans, except distributions representing returns of
non-deductible contributions to the Plan, generally are taxable income to the
participant. Distributions from a Plan to a participant prior to the time the
participant reaches age 59 1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS. Participants
should consult their tax advisers concerning the timing and consequences of
distributions from an Eligible Plan.

OTHER INFORMATION

14
<PAGE>
APPENDIX

OPTIONS

FUTURES CONTRACTS

A-4
<PAGE>

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

JPM Series Trust II
JPM Small Company
Portfolio

PROSPECTUS
JPM Series Trust II
JPM International Equity Portfolio
60 State Street
Boston, Massachusetts 02109
1-800-221-7930

JPM International Equity Portfolio (the "Portfolio") is a separate diversified
portfolio of JPM Series Trust II, an open-end management investment company
organized as a Delaware Business Trust (the "Trust"). The Portfolio seeks to
provide a high total return from a portfolio of equity securities of foreign
corporations.

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

The Portfolio permits investments in any nation, which involve special
considerations and risks.

THE DATE OF THIS PROSPECTUS IS JANUARY 1, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Annual Operating Expenses......................... 1
Financial Highlights.............................. 2
Performance and Yield Information................. 3
The Portfolio..................................... 4
Investment Objective and Policies................. 5
Investment Objective............................ 5
Investment Policies............................. 5
Risk Factors.................................... 6
Additional Investment Information................. 6
Convertible Securities.......................... 6
When-Issued and Delayed Delivery Securities..... 6
Repurchase Agreements........................... 6
Loans of Portfolio Securities................... 7
Reverse Repurchase Agreements................... 7

<CAPTION>
PAGE
<S> <C>
Foreign Investment Information.................. 7
Foreign Currency Exchange Transactions.......... 8
Illiquid Investments, Privately Placed and Other
Unregistered Securities........................ 9
Futures and Options Transactions................ 10
Money Market Instruments........................ 10
Portfolio Turnover................................ 10
Investment Restrictions........................... 10
Management of the Trust and Portfolio............. 10
Capital Shares.................................... 12
Taxes and Dividends............................... 13
Offering and Redemption of Shares................. 14
Other Information................................. 15
Appendix.......................................... A-1
</TABLE>

<TABLE>
<S> <C>
Management Fees..................................................................... .60%
Other Expenses...................................................................... .60%
---------
Total Portfolio Operating Expenses.................................................. 1.20%
</TABLE>

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................................................................ $ 12
3 Years............................................................... $ 38
5 Years............................................................... $ 66
10 Years.............................................................. $145

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by the Portfolio, the payment of which will reduce
investors' annual return. The information in the foregoing table has been
restated to reflect an agreement by Morgan Guaranty Trust Company of New York
("Morgan Guaranty"), an affiliate of Morgan, to reimburse the Trust to the
extent certain expenses exceed in any fiscal year 1.20% of the Portfolio's
average daily net assets. The information in the foregoing table does not
reflect deduction of account fees and charges to separate accounts or related
insurance policies that may be imposed by participating insurance companies. For
a further description of the various costs and expenses incurred in the
operation of the Portfolio, as well as expense reimbursement or waiver
arrangements, see "Management of the Trust and Portfolio."

1
<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Six Month
January 3, 1995 Period Ended
through June 30, 1996
December 31, 1995 (Unaudited)
----------------- -------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 10.00 $ 10.86
----------------- -------------
Income From Investment Operations
Net investment income..................................... 0.15 0.01
Net realized and unrealized gains (losses) on securities &
foreign currency......................................... 1.08 0.73
----------------- -------------
Total from investment operations........................ 1.23 0.74
----------------- -------------
Less Distributions to Shareholders
Dividends from net investment income...................... (0.09)
Dividends in excess of net investment income.............. (0.10)
Distributions from net capital gains...................... (0.18)
----------------- -------------
Total distributions......................................... (0.37) (0.00)
----------------- -------------
Net asset value, end of period.............................. $ 10.86 $ 11.60
----------------- -------------
----------------- -------------
Total Return(2)............................................. 12.38% 6.77%
----------------- -------------
----------------- -------------
Ratios to average net assets:
(Annualized)
Expenses(3)............................................... 1.20% 1.20%
Net investment income..................................... 1.06% 1.90%
Portfolio turnover rate..................................... 68.00% 47.55%
Average commission rate paid................................ N/A $ 0.0012
Net assets, at end of period................................ $3,992,275 $4,770,701
</TABLE>

- ---------
(1) From January 3, 1995 (commencement of operations) to December 31, 1996,
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a
wholly-owned subsidiary of Chubb Life Insurance Company of America ("Chubb
Life"), served as the Portfolio's investment manager, and Morgan Guaranty served
as the Portfolio's sub-investment adviser. Effective January 1, 1997, Morgan
began serving as the Portfolio's investment adviser. See "OTHER INFORMATION."
(2) Total return assumes reinvestment of all dividends during the period and
does not reflect deduction of account fees and charges to separate accounts or
related insurance policies, which, if reflected, would reduce the Portfolio's
total return for the period indicated. Investment returns and principal values
will fluctuate and shares, when redeemed, may be worth more or less than their
original cost. Total returns for periods of less than one year have not been
annualized.
(3) All related party fees have been waived and all other expenses of the
Portfolio have been assumed in part for 1996 and 1995 by Chubb Life and Morgan
Guaranty. Had the fees not been waived and expenses not been assumed, the ratios
of the Portfolio's expenses to average net assets would have been 3.21% in 1996
and 3.16% in 1995.

2
<PAGE>
PERFORMANCE AND YIELD INFORMATION

Set forth below is historical performance information for the Portfolio and for
an appropriate securities index with respect to the Portfolio. In addition, set
forth below is hypothetical performance information derived from historical
composite performance of all Private Accounts managed by Morgan which have
investment objectives, policies and strategies substantially similar to those of
the Portfolio and, thus, is deemed relevant to Portfolio investors. THE
HYPOTHETICAL PERFORMANCE INFORMATION OF THE PRIVATE ACCOUNTS OF THE
INTERNATIONAL EQUITY COMPOSITE DOES NOT REPRESENT THE HISTORICAL PERFORMANCE OF
THE PORTFOLIO AND SHOULD NOT BE INTERPRETED AS INDICATIVE OF THE FUTURE
PERFORMANCE OF THE PORTFOLIO. Moreover, the Private Accounts are not registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), and,
therefore, are not subject to certain investment restrictions, diversification
requirements and other restrictions that are imposed by the 1940 Act and the
Internal Revenue Service, which, if imposed, might have adversely affected the
performance of the Private Accounts. In addition, unlike the Portfolio, the
Private Accounts do not limit their country allocations to no more than 25% of
their assets and typically do not invest in emerging markets securities.

<TABLE>
<CAPTION>
Average Annual Total Return
------------------------------------------
5 Years or 10 Years or
1 Year Since Inception Since Inception
------ --------------- ---------------
<S> <C> <C> <C>
JPM International Equity Portfolio
Period ended June 30, 1996................................ 17.30% 13.01%* N/A
Period ended December 31, 1995............................ 12.38%* 12.38%* N/A
International Equity Composite
Period ended December 31, 1995............................ 9.61% 9.43% 14.26%
Morgan Stanley Capital International Europe, Australia, Far
East (Free) Index**
Period ended December 31, 1995............................ 11.21% 9.37% 13.62%
</TABLE>

- ---------
* Commenced operations January 3, 1995.
** The Morgan Stanley Capital International Europe, Australia, Far East (Free)
Index is a broadly diversified international index composed of the equity
securities of approximately 1,000 companies located outside the United States.

THE PORTFOLIO

Portfolio shares are both offered and redeemed at their net asset value without
the addition of any sales load or redemption charge. See "OFFERING AND
REDEMPTION OF SHARES."

4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE: The Portfolio's investment objective is to provide a high
total return from a portfolio of equity securities of foreign corporations.
Total return will consist of realized and unrealized capital gains and losses
plus income less expenses.

The Portfolio is designed for investors with a long-term investment horizon who
want to diversify their investments by adding international equities and take
advantage of investment opportunities outside the U.S.

INVESTMENT POLICIES: The Portfolio seeks to achieve its investment objective
through country allocation and stock valuation and selection. Based on
fundamental research, quantitative valuation techniques, and experienced
judgment, the Adviser uses a structured decision-making process to allocate the
Portfolio's investments across the countries of the world outside the United
States.

Under normal market conditions, the Portfolio will invest in a minimum of three
different foreign countries. However, when the Adviser determines that adverse
market conditions exist, the Portfolio may adopt a temporary defensive position
and invest in less than three different foreign countries.

Using a systematic stock selection process and analysts' industry expertise,
securities within each country are ranked within economic sectors according to
their relative value. Based on this valuation, the Adviser selects the
securities which appear the most attractive for the Portfolio. The Adviser
believes that, under normal market conditions, economic sector weightings
generally will be similar to those of one or more relevant equity indices.

Finally, the Adviser actively manages currency exposure, in conjunction with
country and stock allocation, in an attempt to protect and possibly enhance the
Portfolio's market value. Through the use of forward foreign currency exchange
contracts, the Adviser will adjust the Portfolio's foreign currency weightings
to reduce its exposure to currencies deemed unattractive and, in certain
circumstances, increase exposure to currencies deemed attractive, as market
conditions warrant, based on fundamental research, technical factors, and the
judgment of a team of experienced currency managers. For further information on
foreign currency exchange transactions, see "ADDITIONAL INVESTMENT INFORMATION."

The Portfolio intends to manage its portfolio actively in pursuit of its
investment objective. The Portfolio does not expect to trade in securities for
short-term profits; however, when circumstances warrant, securities may be sold
without regard to the length of time held. To the extent the Portfolio engages
in short-term trading it may incur increased transaction costs.

EQUITY INVESTMENTS. Under normal market conditions, the Adviser intends to keep
the Portfolio essentially fully invested with at least 65% of the value of its
total assets in equity securities of foreign issuers, consisting of common
stocks and other securities with equity characteristics such as preferred stock,
warrants, rights and convertible securities which may be held through American
Depositary Receipts ("ADRs"). The Portfolio's primary equity investments are the
common stock of companies based in developed countries outside the U.S. and in
developing countries. The common stock in which the Portfolio may invest
includes the common stock of any class or series or any similar equity interest
such as

5
<PAGE>
trust or limited partnership interests. See "ADDITIONAL INVESTMENT INFORMATION."
The Portfolio invests in securities listed on the foreign or domestic securities
exchanges and securities traded in foreign or domestic over-the-counter markets,
and may invest in certain restricted or unlisted securities.

The Portfolio also may invest in dollar and non-dollar denominated money market
instruments (see "Money Market Instruments" for more information concerning the
types of money market instruments in which the Portfolio may invest) and
securities on a when-issued or delayed delivery basis, enter into repurchase and
reverse repurchase agreements, loan its portfolio securities, purchase certain
privately placed securities and enter into certain hedging transactions,
including options on equity securities, options on foreign stock indices and
forward foreign currency exchange contracts. For a discussion of these
investments and investment techniques, see "ADDITIONAL INVESTMENT INFORMATION."

RISK FACTORS: All or a significant portion of the Portfolio may be invested in
foreign securities and ADRs, and investors should understand the special
considerations and risks related to such an investment emphasis, including
foreign currency risks. See "ADDITIONAL INVESTMENT INFORMATION." The prices of
the types of securities usually purchased by the Portfolio will tend to
fluctuate. As a result, the net asset value of the Portfolio may experience
greater short-term and long-term variations than funds that invest primarily in
fixed income securities.

ADDITIONAL INVESTMENT INFORMATION

6
<PAGE>
money by the Portfolio to the seller. The Portfolio always receives securities
as collateral with a market value at least equal to the purchase price plus
accrued interest and this value is maintained during the term of the agreement.
If the seller defaults and the collateral value declines, the Portfolio might
incur a loss. If bankruptcy proceedings are commenced with respect to the
seller, the Portfolio's realization upon the disposition of collateral may be
delayed or limited. Investments in certain repurchase agreements and certain
other investments which may be considered illiquid are limited. See "Illiquid
Investments, Privately Placed and Other Unregistered Securities" below.

LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities. The Portfolio 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 Portfolio 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 Portfolio
any income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally five 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 is for the
account of the Portfolio and its shareholders. The Portfolio may pay reasonable
finders' and custodial fees in connection with a loan. In addition, the
Portfolio will consider all facts and circumstances including the
creditworthiness of the borrowing financial institution, and the Portfolio will
not make any loans in excess of one year. The Portfolio will not lend its
securities to any officer, Trustee, Director, employee, or affiliate of the
Trust, the Adviser or Distributor, unless otherwise permitted by applicable law.

FOREIGN INVESTMENT INFORMATION. The Portfolio invests primarily in securities of
foreign issuers. Investment in securities of foreign issuers and in obligations
of foreign branches of domestic banks involves somewhat different investment
risks from those affecting securities of U.S. domestic issuers. There may be
limited publicly available information with respect to foreign issuers, and
foreign issuers are not generally subject to uniform accounting, auditing and
financial standards and requirements comparable to those applicable to domestic
companies. Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on foreign
investments as compared to dividends and interest paid to the Portfolio by
domestic companies.

7
<PAGE>
obtain and enforce a judgment against a foreign issuer. Any foreign investments
made by the Portfolio must be made in compliance with the U.S. and foreign
currency restrictions and tax laws restricting the amounts and types of foreign
investments.

In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of domestic security exchanges. Accordingly, the Portfolio's foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. Moreover, the settlement
periods for foreign securities, which are often longer than those for securities
of U.S. issuers, may affect portfolio liquidity. In buying and selling
securities on foreign exchanges, purchasers normally pay fixed commissions that
are generally higher than the negotiated commissions charged in the U.S. In
addition, there is generally less government supervision and regulation of
securities exchanges, brokers and issuers located in foreign countries than in
the U.S.

The Portfolio may invest in securities of issuers in "emerging markets."
Emerging markets include any country which in the opinion of the Adviser is
generally considered to be an emerging or developing country by the
international financial community. These countries generally include every
country in the world except the U.S., Canada, Japan, Australia, New Zealand and
most countries in Western Europe. Investments in securities of emerging markets
countries entail a high degree of risk. Investments in securities of issuers in
emerging markets carry all of the risks of investing in securities of foreign
issuers outlined in this section to a heightened degree. These heightened risks
include (i) greater risks of expropriation, confiscatory taxation,
nationalization, and less social, political and economic stability; (ii) the
small current size of the markets for securities of emerging markets issuers and
the currently low or non-existent volume of trading, resulting in lack of
liquidity and in price volatility; (iii) certain national policies which may
restrict the Portfolio's investment opportunities including restrictions on
investing in issuers or industries deemed sensitive to relevant national
interests; and (iv) the absence of developed legal structures governing private
or foreign investment and private property.

8
<PAGE>
than the U.S. dollar, the Portfolio will, from time to time, enter into foreign
currency exchange transactions. The Portfolio either enters into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or uses forward contracts to purchase or sell
foreign currencies. The cost of the Portfolio's currency exchange transactions
will generally be the difference between the bid and offer spot rate of the
currency being purchased or sold.

9
<PAGE>
sold to institutional investors without registration under the 1933 Act. These
securities may be determined to be liquid in accordance with guidelines
established by the Adviser and approved by the Trustees. The Trustees will
monitor the Adviser's implementation of these guidelines on a periodic basis.

MONEY MARKET INSTRUMENTS. The Portfolio is permitted to invest in money market
instruments, although it intends to stay invested in equity securities to the
extent practical in light of its investment objective and long-term investment
perspective. The Portfolio may make money market investments pending other
investment or settlement, for liquidity or in adverse market conditions. The
money market investments permitted for the Portfolio include obligations of the
U.S. Government and its agencies and instrumentalities, other debt securities,
commercial paper, bank obligations and repurchase agreements. The Portfolio also
may invest in short-term obligations of sovereign foreign governments, their
agencies, instrumentalities and political subdivisions. For more detailed
information about these money market instruments, see "INVESTMENT OBJECTIVES AND
POLICIES" in the Statement of Additional Information.

PORTFOLIO TURNOVER

INVESTMENT RESTRICTIONS

MANAGEMENT OF THE TRUST AND PORTFOLIO

10
<PAGE>
billion, of which Morgan advises over $167 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 adviser to national governments. The firm,
through its predecessor firms, has been in business for over a century and has
been managing investments since 1913.

Morgan uses a sophisticated, disciplined, collaborative process for managing all
asset classes. The following persons are primarily responsible for the
day-to-day management and implementation of Morgan's process for the Portfolio
(the inception date of each person's responsibility for the Portfolio and their
business experience for the past five years are indicated parenthetically): Paul
A. Quinsee, Vice President (since January, 1995, employed by Morgan since
February, 1992, previously Vice President, Citibank), Thomas P. Madsen, Managing
Director (since January, 1995, employed by Morgan since prior to 1988) and Anne
H. Richards, Vice President (since January, 1997, employed by Morgan since May,
1994, employed by Alliance Capital Ltd. from September, 1992 to April, 1994 and
Cambridge Consultants Ltd. from January, 1989 to July, 1991).

As compensation for Morgan's services under the Investment Advisory Agreement,
the Trust has agreed to pay Morgan a monthly fee at the annual rate of .60% of
the Portfolio's average daily net assets.

11
<PAGE>
As compensation for Morgan Guaranty's services under the Administrative Services
Agreement, the Trust has agreed to pay Morgan Guaranty a monthly fee at the
annual rate of .60% of the Portfolio's average daily net assets.

Under the terms of the Administrative Services Agreement, Morgan Guaranty may
delegate one or more of its responsibilities to other entities at Morgan
Guaranty's expense.

From January 3, 1995 (commencement of operations) to December 31, 1996, Chubb
Investment Advisory served as the Portfolio's investment manager and Morgan
Guaranty served as sub-investment adviser. The compensation to Morgan Guaranty,
as sub-investment adviser, was paid directly from the investment management fees
paid by the Trust to Chubb Investment Advisory. For the period January 3, 1995
(commencement of operations) through December 31, 1995, all investment
management fees payable by the Portfolio to Chubb Investment Advisory totaled
.80% of the Portfolio's average daily net assets. For the period January 3, 1995
through December 31, 1995, sub-investment advisory fees payable by Chubb
Investment Advisory to Morgan Guaranty totaled .60% of the Portfolio's average
daily net assets. Because a portion of the Portfolio's fees and expenses were
reimbursed, the ratio of the Portfolio's operating expenses to average net
assets for such period was 1.20%. Had a portion of the Portfolio's fees and
expenses not been reimbursed, the ratio of the Portfolio's operating expenses to
average net assets for such period would have been 3.16%.

FDI is a wholly-owned indirect subsidiary of Boston Institutional Group, Inc.
FDI currently provides administration and distribution services for a number of
other registered investment companies.

For more information concerning the payment of expenses of the Trust, see
"INVESTMENT ADVISORY AND OTHER SERVICES" in the Statement of Additional
Information.

CAPITAL SHARES

12
<PAGE>
approval of the Investment Advisory Agreement, and changes in fundamental
investment policies of the Portfolio. The assets of the Portfolio are charged
with the liabilities of the Portfolio and a proportionate share of the general
liabilities of the Trust. All shares may be redeemed at any time.

As a Delaware Business Trust, the Trust is not required to hold regular annual
shareholder meetings and, in the normal course, does not expect to hold such
meetings. The Trust is, however, required to hold shareholder meetings for such
purposes as, for example: (i) approving certain agreements as required by the
1940 Act; (ii) changing fundamental investment objectives and restrictions of
the Portfolio; and (iii) filling vacancies on the Board in the event that less
than a majority of the Trustees were elected by shareholders. The Trust expects
that there will be no meetings of shareholders for the purpose of electing
trustees unless and until such time as less than a majority of the trustees
holding office have been elected by shareholders. At such time, the trustees
then in office will call a shareholder meeting for the election of trustees. In
addition, holders of record of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee from office by a vote cast in person or
by proxy at a shareholder meeting called for that purpose at the request of
holders of 10% or more of the outstanding shares of the Trust. The Trust has the
obligation to assist in any such shareholder communications. Except as set forth
above, Trustees will continue in office and may appoint successor Trustees.

TAXES AND DIVIDENDS

13
<PAGE>
dividends paid. All dividends and distributions will be automatically reinvested
in additional Portfolio shares with respect to which dividends have been
declared, at net asset value, as of the ex-dividend date of such dividends.

Dividends paid by the Trust to Eligible Plans ordinarily will not be subject to
taxation until the proceeds are distributed from the Plan. The Trust will not
report dividends paid to Plans to the Internal Revenue Service ("IRS").
Generally, distributions from Eligible Plans, except those representing returns
of non-deductible contributions thereto, will be taxable as ordinary income and,
if made prior to the time the participant reaches age 59 1/2, generally will be
subject to an additional tax equal to 10% of the taxable portion of the
distribution. If the distribution from an Eligible Plan (other than certain
governmental or church plans) for any taxable year following the year in which
the participant reaches age 70 1/2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or custodian of
such a Plan will be responsible for reporting distributions from the Plan to the
IRS. Participants in Eligible Plans will receive a disclosure statement
describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to an Eligible Plan in excess of
the amounts permitted by law may be subject to an excise tax.

OFFERING AND REDEMPTION OF SHARES

14
<PAGE>
Distributions from Eligible Plans, except distributions representing returns of
non-deductible contributions to the Plan, generally are taxable income to the
participant. Distributions from a Plan to a participant prior to the time the
participant reaches age 59 1/2 or becomes permanently disabled may subject the
participant to an additional 10% penalty tax imposed by the IRS. Participants
should consult their tax advisers concerning the timing and consequences of
distributions from an Eligible Plan.

OTHER INFORMATION

15
<PAGE>
APPENDIX

OPTIONS

FUTURES CONTRACTS

A-4
<PAGE>

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

JPM Series Trust II
JPM International
Equity Portfolio

JPM SERIES TRUST II
60 State Street
Boston, Massachusetts 02109
1-800-521-5411

A SERIES TRUST WITH
JPM TREASURY MONEY MARKET PORTFOLIO
JPM BOND PORTFOLIO
JPM EQUITY PORTFOLIO
JPM SMALL COMPANY PORTFOLIO
JPM INTERNATIONAL EQUITY PORTFOLIO

STATEMENT OF ADDITIONAL INFORMATION
January 1, 1997

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS BUT
SUPPLEMENTS AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS OF THE TRUST.
IT IS INCORPORATED BY REFERENCE INTO THE PROSPECTUS. A COPY OF THE PROSPECTUS
MAY BE OBTAINED BY WRITING OR CALLING THE TRUST AT THE ADDRESS OR TELEPHONE
NUMBER ABOVE.

The date of the Prospectus to which this Statement of Additional
Information relates is January 1, 1997.

B-1
<PAGE>

TABLE OF CONTENTS

Page

BUSINESS HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . B-4
JPM Treasury Money Market Portfolio. . . . . . . . . . . . . . . . B-4
JPM Bond Portfolio . . . . . . . . . . . . . . . . . . . . . . . . B-4
JPM Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . B-5
JPM Small Company Portfolio. . . . . . . . . . . . . . . . . . . . B-5
JPM International Equity Portfolio . . . . . . . . . . . . . . . . B-5
Money Market Instruments . . . . . . . . . . . . . . . . . . . . . B-6
U.S. Treasury Securities. . . . . . . . . . . . . . . . . . . B-6
Additional U.S. Government Obligations. . . . . . . . . . . . B-6
Foreign Government Obligations. . . . . . . . . . . . . . . . B-6
Bank Obligations. . . . . . . . . . . . . . . . . . . . . . . B-6
Commercial Paper. . . . . . . . . . . . . . . . . . . . . . . B-6
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . B-7
Corporate Bonds and Other Debt Securities. . . . . . . . . . . . . B-8
High-Yield/High-Risk Bonds. . . . . . . . . . . . . . . . . . B-8
Asset-Backed Securities. . . . . . . . . . . . . . . . . . . . . . B-8
Equity Investments . . . . . . . . . . . . . . . . . . . . . . . . B-8
Equity Securities . . . . . . . . . . . . . . . . . . . . . . B-9
Foreign Investments. . . . . . . . . . . . . . . . . . . . . . . . B-9
Additional Investments . . . . . . . . . . . . . . . . . . . . . .B-10
When-Issued and Delayed Delivery Securities . . . . . . . . .B-10
Investment Company Securities . . . . . . . . . . . . . . . .B-10
Reverse Repurchase Agreements . . . . . . . . . . . . . . . .B-10
Mortgage Dollar Roll Transactions . . . . . . . . . . . . . .B-11
Loans of Portfolio Securities . . . . . . . . . . . . . . . .B-11
Privately Placed and Certain Unregistered
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .B-11
Quality and Diversification Requirements . . . . . . . . . . . . .B-12
JPM Treasury Money Market Portfolio . . . . . . . . . . . . .B-12
JPM Bond Portfolio. . . . . . . . . . . . . . . . . . . . . .B-12
JPM Equity, Small Company and
International Equity Portfolios . . . . . . . . . . . . . .B-12
Options and Futures Transactions . . . . . . . . . . . . . . . . .B-13
Exchange Traded and Over the Counter Options. . . . . . . . .B-13
Futures Contracts and Options on Futures
Contracts . . . . . . . . . . . . . . . . . . . . . . . . .B-13
Combined Activities . . . . . . . . . . . . . . . . . . . . .B-14
Correlation of Price Changes. . . . . . . . . . . . . . . . .B-14
Liquidity of Options and Futures Contracts. . . . . . . . . .B-14
Position Limits . . . . . . . . . . . . . . . . . . . . . . .B-15
Asset Coverage for Futures Contracts and
Option Positions. . . . . . . . . . . . . . . . . . . . . .B-15
Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . .B-15

B-2
<PAGE>

INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .B-15
Fundamental Investment Restrictions. . . . . . . . . . . . . . . .B-15
Non-Fundamental Investment Restrictions. . . . . . . . . . . . . .B-16
JPM Treasury Money Market
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . .B-17
JPM Bond, Equity, Small Company
and International Equity Portfolios . . . . . . . . . . . .B-17
TRUSTEES AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .B-18
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . .B-21
Investment Advisory AgreementB-21
Administrative Services Agreement. . . . . . . . . . . . . . . . .B-22
Prior Management Arrangements. . . . . . . . . . . . . . . . . . .B-23
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . .B-24
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-24
Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . .B-24
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS . . . . . . . . . . . . . B-24
CAPITAL SHARES B-26
OFFERING AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . .B-27
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . .B-28
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-29
PERFORMANCE AND YIELD INFORMATION. . . . . . . . . . . . . . . . . . . . . .B-30
Money Market Portfolio . . . . . . . . . . . . . . . . . . . . . .B-30
Non-Money Market Portfolios. . . . . . . . . . . . . . . . . . . .B-30
DELAWARE BUSINESS TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . .B-32
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-32
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . .B-33
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-34

B-3
<PAGE>

BUSINESS HISTORY

JPM Series Trust II (the "Trust"), a Delaware Business Trust, is an
open-end diversified management investment company established to provide for
the investment of assets of separate accounts of life insurance companies
("Participating Insurance Companies") and of qualified pension and retirement
plans outside of the separate account context ("Eligible Plans" or "Plans").
Separate accounts acquire such assets pursuant to the sale of variable annuity
contracts and variable life insurance policies (collectively, the "Policies").
The Trust is composed of five separate portfolios (each, a "Portfolio" and
collectively, the "Portfolios") which operate as distinct investment vehicles.
The Portfolios are JPM Treasury Money Market Portfolio, JPM Bond Portfolio, JPM
Equity Portfolio, JPM Small Company Portfolio and JPM International Equity
Portfolio.

The Trust was organized in Delaware on October 28, 1993 and had no
business history prior to that date. Prior to January 1, 1997, the Trust's name
was The Chubb Series Trust and the names of the corresponding Portfolios were
The Resolute Treasury Money Market Portfolio, The Resolute Bond Portfolio, The
Resolute Equity Portfolio, The Resolute Small Company Portfolio and The Resolute
International Equity Portfolio. In the future, the Trust may add or delete
portfolios.

Each Portfolio's investment adviser is J.P. Morgan Investment
Management, Inc. ("Morgan" or the "Adviser").

INVESTMENT OBJECTIVES AND POLICIES

JPM TREASURY MONEY MARKET PORTFOLIO is designed to be a convenient
means of making substantial investments in short-term direct obligations of the
United States Treasury. JPM Treasury Money Market Portfolio's investment
objective is to provide current income, maintain a high level of liquidity, and
preserve capital.

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. Treasury securities described in the Prospectus
and in this Statement of Additional Information that have effective maturities
of not more than thirteen months.

JPM BOND PORTFOLIO is designed to be a convenient means of making
substantial investments in a broad range of corporate and government debt
obligations and related investments, subject to certain quality and other
restrictions. JPM Bond Portfolio's investment objective is to provide a high
total return consistent with moderate risk of capital and maintenance of
liquidity. Although the net asset value of JPM Bond Portfolio will fluctuate,
the Portfolio attempts to preserve the value of its investments to the extent
consistent with its objective.

The Portfolio attempts to achieve its investment objective by
investing primarily in corporate and government debt obligations and related
securities described in the Prospectus and this Statement of Additional
Information. The Portfolio may purchase or sell financial futures contracts and
options in order to attempt to reduce the volatility of its portfolio, manage
market risk and minimize fluctuations in net asset value. For a discussion of
these investments, see "OPTIONS AND FUTURES TRANSACTIONS."

B-4
<PAGE>

JPM EQUITY PORTFOLIO is designed for investors who want an actively
managed portfolio of selected equity securities that seeks to outperform the S&P
500 Index. JPM Equity Portfolio's investment objective is to provide a high
total return from a portfolio comprised of selected equity securities.

During normal market conditions, at least 65% of the Portfolio's net
assets will be invested in equity securities, consisting of common stocks and
other securities with equity characteristics such as preferred stock, warrants,
rights and convertible securities. The Portfolio's primary investments are the
common stock of U.S. corporations with market capitalizations above $1.5
billion.

JPM SMALL COMPANY PORTFOLIO is designed for investors who are willing
to assume the somewhat higher risk of investing in small companies in order to
seek a higher return over time than might be expected from a portfolio of stocks
of large companies. JPM Small Company Portfolio's investment objective is to
provide a high total return from a portfolio of equity securities of small
companies.

The Portfolio may invest in the same types of securities as permitted
for the JPM Equity Portfolio.

JPM INTERNATIONAL EQUITY PORTFOLIO is designed for investors with a
long-term investment horizon who want to diversify their portfolios by adding
international equities and take advantage of investment opportunities outside
the U.S. JPM International Equity Portfolio's investment objective is to
provide a high total return from a portfolio of equity securities of foreign
corporations.

The Portfolio seeks to achieve its investment objective by investing
primarily in the equity securities of foreign corporations, consisting of common
stock and other securities with equity characteristics such as preferred stock,
warrants, rights and convertible securities. Under normal circumstances, the
Portfolio expects to invest at least 65% of its total assets in such securities.
The Portfolio does not intend to invest in U.S. securities (other than short-
term instruments), except temporarily when extraordinary circumstances
prevailing at the same time in a significant number of foreign countries render
investments in such countries inadvisable.

The following discussion supplements the information regarding the
investment objective of each Portfolio and the policies to be employed to
achieve its objective as set forth above and in the Prospectus.

MONEY MARKET INSTRUMENTS

As discussed in the Prospectus, each Portfolio may invest in money
market instruments to the extent consistent with its investment objective and
policies. A description of the various types of money market instruments that
may be purchased by the Portfolios appears below. See "QUALITY AND
DIVERSIFICATION REQUIREMENTS."

B-5
<PAGE>

U.S. TREASURY SECURITIES. Each of the Portfolios 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 U.S.

ADDITIONAL U.S. GOVERNMENT OBLIGATIONS. Each of the Portfolios,
except the JPM Treasury Money Market Portfolio, 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 U.S.
Government. In the case of securities not backed by the full faith and credit of
the U.S., each Portfolio 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 U.S. Government itself in the event the agency or
instrumentality does not meet its commitments. Securities in which each
Portfolio, except the JPM Treasury Money Market Portfolio, may invest that are
not backed by the full faith and credit of the U.S. Government include, but are
not limited to, obligations of the Tennessee Valley Authority, the Federal
National Mortgage Association, and the United States Postal Service, each of
which has the right to borrow from the U.S. Treasury to meet its obligations,
and obligations of the Federal Farm Credit System and the Federal Home Loan
Banks, both of whose obligations may be satisfied only by the individual credits
of each issuing agency. Securities which are backed by the full faith and
credit of the U.S. Government include obligations of the Government National
Mortgage Association, the Farmers Home Administration, and the Export-Import
Bank.

FOREIGN GOVERNMENT OBLIGATIONS. Each of the Portfolios, except the
JPM Treasury Money Market Portfolio, subject to its applicable investment
policies, also may invest in short-term obligations of foreign sovereign
governments or of their agencies, instrumentalities, authorities or political
subdivisions. These securities may be denominated in U.S. dollars or in another
currency. See "FOREIGN INVESTMENTS."

BANK OBLIGATIONS. Each of the Portfolios, except the JPM Treasury
Money Market Portfolio, 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 (the "Asset Limitation") and are
organized under the laws of the U.S. 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 Asset Limitation
does not apply to the JPM International Equity Portfolio. See "FOREIGN
INVESTMENTS." The Portfolios will not invest in bank obligations for which the
Adviser, or any of its affiliated persons, is the ultimate obligor or accepting
bank. Each of the Portfolios, other than JPM Treasury Money Market Portfolio,
also may invest in obligations of international banking institutions designated
or supported by national governments to promote economic reconstructions,
development or trade between nations (e.g., the European Investment Bank, the
InterAmerican Development Bank, or the World Bank).

COMMERCIAL PAPER. Each of the Portfolios, except the JPM Treasury
Money Market Portfolio, 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 the Adviser, acting as agent, for no additional fee. The monies
loaned to the borrower come from accounts maintained with or managed by the
Adviser or its affiliates, pursuant to arrangements with such accounts.
Interest and principal

B-6
<PAGE>

payments are credited to such accounts. The Adviser, acting as a fiduciary on
behalf of its clients, 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 the
Adviser. Since master demand obligations typically are not rated by credit
rating agencies, the Portfolios may invest in such unrated obligations only if
at the time of an investment the obligation is determined by the Adviser to have
a credit quality which satisfies the particular Portfolio's quality
restrictions. See "QUALITY AND DIVERSIFICATION REQUIREMENTS." Although there
is no secondary market for master demand obligations, such obligations are
considered by the Portfolios to be liquid because they are payable upon demand.
The Portfolios do not have any specific percentage limitation on investments in
master demand obligations.

REPURCHASE AGREEMENTS. Each of the Portfolios may enter into
repurchase agreements with brokers, dealers or banks that meet the credit
guidelines approved by the Trust's Board of Trustees (the "Board"). In a
repurchase agreement, a Portfolio 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
Portfolio is invested in the agreement and is not related to the coupon rate on
the underlying security. A repurchase agreement also may be viewed as a fully
collateralized loan of money by a Portfolio to the seller. The period of these
repurchase agreements will usually be short, from overnight to one week, and at
no time will a Portfolio invest in repurchase agreements for more than thirteen
months. The securities which are subject to repurchase agreements, however, may
have maturity dates in excess of thirteen months from the effective date of the
repurchase agreement. JPM Treasury Money Market Portfolio will only enter into
repurchase agreements involving U.S. Treasury securities. The Portfolios 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 Portfolios in each agreement plus accrued interest, and
the Portfolios will make payment for such securities only upon physical delivery
or upon evidence of book entry transfer to the account of the Trust's custodian.
JPM Treasury Money Market Portfolio will be fully collateralized within the
meaning of Rule 2a-7 under the Investment Company Act of 1940, as amended (the
"1940 Act"). If the seller defaults, a Portfolio 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 the collateral by a Portfolio may be delayed or
limited. See "INVESTMENT RESTRICTIONS."

Each of the Portfolios (other than JPM Treasury Money Market
Portfolio) may make investments in other debt securities with remaining
effective maturities of not more than thirteen months, including, without
limitation, corporate bonds of foreign and domestic issuers, asset-backed
securities and other obligations described in the Prospectus or this Statement
of Additional Information.

B-7
<PAGE>

CORPORATE BONDS AND OTHER DEBT SECURITIES

As discussed in the Prospectus, JPM Bond Portfolio may invest in bonds
and other debt securities of domestic and foreign issuers to the extent
consistent with its investment objective and policies. A description of these
investments appears in the Prospectus and below. See "QUALITY AND
DIVERSIFICATION REQUIREMENTS." For information on short-term investments in
these securities, see "MONEY MARKET INSTRUMENTS."

HIGH YIELD/HIGH RISK BONDS. High yield/high risk, below investment
grade securities (commonly known as "junk bonds") involve significant credit and
liquidity concerns and fluctuating yields. Lower rated bonds also involve the
risk that the issuer will not make interest or principal payments when due.
More careful analysis of the financial condition of each issuer of lower rated
securities is therefore necessary. During an economic downturn or substantial
period of rising interest rates, highly leveraged issuers may experience
financial stress which would adversely affect their ability to service their
principal and interest payment obligations, to meet projected business goals to
obtain additional financing. The market prices of lower grade securities are
generally less sensitive to interest rate changes than higher rated investments,
but more sensitive to adverse economic or political changes or individual
developments specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of prices of
these securities. Lower rated securities also may have less liquid markets than
higher rated securities, and their liquidity as well as their value may be more
severely affected by adverse economic conditions. Adverse publicity and
investor perceptions as well as new proposed laws also may have a greater
negative impact on the market for lower rated bonds.

ASSET-BACKED SECURITIES. Asset-backed securities directly or
indirectly represent a participation interest in, or are secured by and payable
from, a stream of payments generated by particular assets such as motor vehicle
or credit card receivables. Payments of principal and interest may be
guaranteed up to certain amounts and for a certain time period by a letter of
credit issued by a financial institution unaffiliated with the entities issuing
the securities. The asset-backed securities in which a Portfolio may invest are
subject to the Portfolio's overall credit requirements. However, asset-backed
securities, in general, are subject to certain risks. Most of these risks are
related to limited interests in applicable collateral. For example, credit card
debt receivables are generally unsecured and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which
give such debtors the right to set off certain amounts on credit card debt
thereby reducing the balance due. Additionally, if the letter of credit is
exhausted, holders of asset-backed securities also may experience delays in
payments or losses if the full amounts due on underlying sales contracts are not
realized. Because asset-backed securities are relatively new, the market
experience in these securities is limited and the market's ability to sustain
liquidity through all phases of the market cycle has not been tested.

EQUITY INVESTMENTS

As discussed in the Prospectus, JPM Equity, Small Company and
International Equity Portfolios invest primarily in equity securities consisting
of common stock and other securities with equity characteristics. The
securities in which these Portfolios invest include those listed on any domestic
or foreign securities exchange or traded in the over-the-counter markets, as
well as certain restricted or unlisted securities. A discussion of the various
types of equity

B-8
<PAGE>

investments which may be purchased by these Portfolios appears in the Prospectus
and below. See "QUALITY AND DIVERSIFICATION REQUIREMENTS."

EQUITY SECURITIES. The common stocks in which the Portfolios may
invest include the common stock of any class or series of a domestic or foreign
corporation or any similar equity interest, such as trust or partnership
interests. The Portfolios equity investments also may include preferred stock,
warrants, rights and convertible securities. These investments may or may not
pay dividends and may or may not carry voting rights. Common stock occupies the
most junior position in a company's capital structure.

The convertible securities in which the Portfolios may invest include
any debt securities or preferred stock which may be converted into common stock
or which carry the right to purchase common stock. Convertible securities
entitle the holder to exchange the securities for a specified number of shares
of common stock, usually of the same company, at specified prices within a
certain period of time.

The terms of any convertible security determine its ranking in a
company's capital structure. In the case of subordinated convertible
debentures, the holders' claims on assets and earnings are subordinated to the
claims of other creditors, and are senior to the claims of preferred and common
shareholders. In the case of convertible preferred stock, the holders' claims
on assets and earnings are subordinated to the claims of all creditors and are
senior to the claims of common shareholders.

FOREIGN INVESTMENTS

JPM International Equity Portfolio makes substantial investments in
foreign securities. JPM Bond, Equity and Small Company Portfolios may invest in
certain foreign securities. JPM Equity and Small Company Portfolios do not
expect to invest more than 30% and 30%, respectively, of their respective total
assets at the time of purchase in securities of foreign issuers. JPM Bond
Portfolio does not expect more than 20% of its foreign investments to be in
securities which are not U.S. dollar denominated. JPM Equity and Small Company
Portfolios do not expect more than 10% of their respective foreign investments
to be in securities which are not listed on a national securities exchange or
which are not U.S. dollar-denominated. In the case of JPM Bond Portfolio, any
foreign commercial paper must not be subject to foreign withholding tax at the
time of purchase. Foreign investments may be made directly in securities of
foreign issuers or in the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs").

Generally, ADRs and EDRs are receipts issued by a bank or trust
company that evidence ownership of underlying securities issued by a foreign
corporation and that are designed for use in the domestic, in the case of ADRs,
or European, in the case of EDRs, securities markets.

Since investments in foreign securities may involve foreign
currencies, the value of a Portfolio's assets as measured in U.S. dollars may be
affected by changes in currency rates and in exchange control regulations,
including currency blockage. JPM Bond, Equity, Small Company and International
Equity Portfolios may enter into forward commitments for the purchase or sale of
foreign currencies in connection with the settlement of foreign securities

B-9
<PAGE>

transactions, to hedge the underlying currency exposure related to foreign
investments or to gain exposure to the foreign currency in an attempt to realize
gains. See "ADDITIONAL INVESTMENT INFORMATION" in the Prospectus.

For a description of the risks associated with investing in foreign
securities, see "ADDITIONAL INVESTMENT INFORMATION" in the Prospectus.

ADDITIONAL INVESTMENTS

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Portfolio may
purchase securities on a when-issued or delayed delivery basis. 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 no interest accrues to a Portfolio until settlement takes place.
At the time a Portfolio 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, each Portfolio
will maintain with the Trust's 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. See "INVESTMENT
ADVISORY AND OTHER SERVICES" for more information concerning the Trust's
custodian. On delivery dates for such transactions, each Portfolio will meet
its obligations from maturities or sales of the securities held in the
segregated account and/or from cash flow. If a Portfolio 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. It is the current policy of each Portfolio not to
enter into when-issued commitments exceeding in the aggregate 15% of the market
value of the Portfolio'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 each Portfolio to the extent permitted under the
1940 Act. These limits require that, as determined immediately after a purchase
is made, (i) not more than 5% of the value of the Portfolio's total assets will
be invested in the securities of any one investment company, (ii) not more than
10% of the value of the Portfolio's 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 Portfolio. As a shareholder of another investment company, a
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 Portfolio bears
directly in connection with its own operations.

REVERSE REPURCHASE AGREEMENTS. Each Portfolio may enter into reverse
repurchase agreements. In a reverse repurchase agreement, a Portfolio sells a
security and agrees to repurchase the same security at a mutually agreed upon
date and price (JPM Treasury Money Market Portfolio will only enter into reverse
repurchase agreements involving Treasury securities). Reverse repurchase
agreements also may be viewed as the borrowing of money by the

B-10
<PAGE>

Portfolio and, therefore, is a form of leverage. The Portfolios will invest the
proceeds of borrowings under reverse repurchase agreements. In addition, the
Portfolios 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 Portfolios will not invest the
proceeds of a reverse repurchase agreement for a period which exceeds the
duration of the reverse repurchase agreement. A Portfolio may not enter into
reverse repurchase agreements exceeding in the aggregate one-third of the market
value of its total assets less liabilities other than the obligations created by
reverse repurchase agreements. Each Portfolio will establish and maintain with
the Trust's 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.

MORTGAGE DOLLAR ROLL TRANSACTIONS. JPM Bond Portfolio may engage in
mortgage dollar roll transactions with respect to mortgage-related securities
issued by the Government National Mortgage Association, the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation. In a
mortgage dollar roll transaction, the Portfolio sells a mortgage-related
security and simultaneously agrees to repurchase a substantially similar
security on a specified future date at an agreed upon price. During the roll
period, the Portfolio will not be entitled to receive any interest or principal
paid on the securities sold. The Portfolio is compensated for the lost interest
on the securities sold by the difference between the sales price and the lower
price for the future repurchase as well as by the interest earned on the
reinvestment of the sales proceeds. The Portfolio also may be compensated by
receipt of a commitment fee. When the Portfolio enters into a mortgage dollar
roll transaction, liquid assets in an amount sufficient to pay for the future
repurchase are segregated with the Trust's custodian. Mortgage dollar roll
transactions are considered reverse repurchase agreements for purposes of the
Portfolio's investment restrictions.

LOANS OF PORTFOLIO SECURITIES. Each Portfolio 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 Portfolio 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 Portfolio any income accruing
thereon. Loans will be subject to termination by the Portfolios in the normal
settlement time, currently five 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 a Portfolio and its
respective shareholders. The Portfolio may pay reasonable finders' and
custodial fees in connection with a loan. In addition, the Portfolios will
consider all facts and circumstances including the creditworthiness of the
borrowing financial institution, and the Portfolios will not make any loans in
excess of one year. The Portfolios will not lend their securities to any
officer, Trustee, Director, employee, or affiliate of the Portfolios, the
Adviser or the Trust's distributor, unless otherwise permitted by applicable
law.

PRIVATELY PLACED AND CERTAIN UNREGISTERED SECURITIES. Each Portfolio,
except JPM Treasury Money Market Portfolio, may invest in privately placed,
restricted, Rule 144A or other unregistered securities as described in the
Prospectus.

B-11
<PAGE>

QUALITY AND DIVERSIFICATION REQUIREMENTS

As a diversified investment company, each Portfolio is subject to the
following fundamental limitations with respect to 75% of its assets: (1) the
Portfolio 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 Portfolio may not own more than 10% of the
outstanding voting securities of any one issuer. As for the other 25% of a
Portfolio's assets not subject to the limitations 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, subject to the
limitation of any applicable state securities laws, or with respect to JPM
Treasury Money Market Portfolio, as described below. Investments not subject to
the limitations described above could involve an increased risk to a Portfolio
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.

JPM TREASURY MONEY MARKET PORTFOLIO. In order to attain its
investment objective, JPM Treasury Money Market Portfolio will limit its
investments to direct obligations of the U.S. Treasury including Treasury Bills,
Notes and Bonds with remaining maturities of thirteen months or less at the time
of purchase and will maintain a dollar-weighted average portfolio maturity of
not more than 90 days.

JPM BOND PORTFOLIO. JPM Bond Portfolio invests principally in a
diversified portfolio of "high quality" and "investment grade" securities.
Investment grade debt is rated, on the date of investment, within the four
highest rating categories of Moody's Investors Service, Inc. ("Moody's"),
currently Aaa, Aa, A and Baa, or of Standard & Poor's Ratings Group ("Standard &
Poor's"), currently AAA, AA, A and BBB, while high grade debt is rated on the
date of the investment within the three highest of such categories. The
Portfolio also may invest up to 35% of its total assets in securities which are
"below investment grade." The Portfolio may invest in debt securities which are
not rated or other debt securities to which these ratings are not applicable if,
in the Adviser's opinion, such securities are of comparable quality to the rated
securities discussed above. In addition, at the time the Portfolio invests in
any commercial paper, 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 the Adviser's
opinion.

JPM EQUITY, SMALL COMPANY AND INTERNATIONAL EQUITY PORTFOLIOS. JPM
Equity, Small Company and International Equity Portfolios may invest in
convertible debt securities, for which there are no specific quality
requirements. In addition, at the time the Portfolio invests in any commercial
paper, 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-l 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 the Adviser's opinion. At the time
the Portfolio invests in any other short-term debt securities, they must be
rated A or higher by Moody's or Standard & Poor's, or if unrated, the investment
must be of comparable quality in the Adviser's opinion.

B-12
<PAGE>

In determining the suitability of investment in a particular unrated
security, the Adviser takes into consideration asset and debt service coverage,
the purpose of the financing, history of the issuer, existence of other rated
securities of the issuer, and other relevant conditions such as comparability to
other issuers.

OPTIONS AND FUTURES TRANSACTIONS

EXCHANGE TRADED AND OVER-THE-COUNTER OPTIONS. All options purchased
or sold by the Portfolios will be traded on a securities exchange or will be
purchased or sold by securities dealers ("over-the-counter" or "OTC" options)
that meet the creditworthiness standards approved by the Board. While exchange-
traded options are obligations of the Options Clearing Corporation, in the case
of OTC options, a Portfolio relies on the dealer from which it purchased the
option to perform if the option is exercised. Thus, when a Portfolio purchases
an OTC option, it relies on the dealer from which it purchased the option to
make or take delivery of the underlying securities. Failure by the dealer to do
so would result in the loss of the premium paid by the Portfolio as well as loss
of the expected benefit of the transaction.

The staff of the Securities and Exchange Commission ("SEC") has taken
the position that, in general, purchased OTC options and the underlying
securities used to cover written OTC options are illiquid securities. However,
a Portfolio may treat as liquid the underlying securities used to cover written
OTC options, provided it has arrangements with certain qualified dealers who
agree that the Portfolio may repurchase any option it writes for a maximum price
to be calculated by a predetermined formula. In these cases, the OTC option
itself would only be considered illiquid to the extent that maximum repurchase
price under the formula exceeds the intrinsic value of the option.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Portfolios
may purchase or sell futures contracts and purchase put and call options and
sell (i.e., write) covered put and call options on futures contracts. Futures
contracts obligate the buyer to take and the seller to make delivery at a future
date of a specified quantity of a financial instrument or an amount of cash
based on the value of a securities index. Currently, futures contracts are
available on various types of fixed income securities, including but not limited
to U.S. Treasury bonds, notes and bills, Eurodollar certificates of deposit and
on indices of fixed income securities and indices of equity securities.

Unlike a futures contract, which requires the parties to buy and sell
a security or make a cash settlement payment based on changes in a financial
instrument or securities index on an agreed date, an option on a futures
contract entitles its holder to decide on or before a future date whether to
enter into such a contract. If the holder decides not to exercise its option,
the holder may close out the option position by entering into an offsetting
transaction or may decide to let the option expire and forfeit the premium
thereon. The purchaser of an option on a futures contract pays a premium for
the option but makes no initial margin payments or daily payments of cash in the
nature of "variation" margin payments to reflect the change in the value of the
underlying contract as does a purchaser or seller of a futures contract.

The seller of an option on a futures contract receives the premium
paid by the purchaser and may be required to pay initial margin. Amounts equal
to the initial margin and any additional collateral required on any options on
futures contracts sold by a Portfolio are paid by

B-13
<PAGE>

the Portfolio into a segregated account, in the name of the Futures Commission
Merchant ("FCM"), as required by the 1940 Act and the SEC's interpretations
thereunder.

COMBINED POSITIONS. The Portfolios may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position.

For example, a Portfolio may purchase a put option and write a call
option on the same underlying instrument, in order to construct a combined
position whose risk and return characteristics are similar to selling a futures
contract. Another possible combined position would involve writing a call option
at one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial price
increase. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and close
out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely that the
standardized options and futures contracts available will not match a
Portfolio's current or anticipated investments exactly. A Portfolio may invest
in options and futures contracts based on securities with different issuers,
maturities, or other characteristics from the securities in which it typically
invests, which involves a risk that the options or futures position will not
track the performance of the Portfolio's other investments.

Options and futures contracts prices can also diverge from the prices
of their underlying instruments, even if the underlying instruments match the
Portfolio's investments well. Options and futures contracts prices are affected
by such factors as current and anticipated short term interest rates, changes in
volatility of the underlying instrument, and the time remaining until expiration
of the contract, which may not affect security prices the same way. Imperfect
correlation also may result from differing levels of demand in the options and
futures markets and the securities markets, structural differences in how
options and futures and securities are traded, or imposition of daily price
fluctuation limits or trading halts. A Portfolio may purchase or sell options
and futures contracts with a greater or lesser value than the securities it
wishes to hedge or intends to purchase in order to attempt to compensate for
differences in volatility between the contract and the securities, although this
may not be successful in all cases. If price changes in a Portfolio's options
or futures positions are poorly correlated with its other investments, the
positions may fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid market will exist for any particular options or futures contract at any
particular time even if the contract is traded on an exchange. In addition,
exchanges may establish daily price fluctuation limits for options and futures
contracts and may halt trading if a contract's price moves up or down more than
the limit on a given day. On volatile trading days when the price fluctuation
limit is reached or a trading halt is imposed, it may be impossible for a
Portfolio to enter into new positions or close out existing positions. If the
market for a contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable positions, and
could potentially require a Portfolio to continue to hold a position until
delivery or expiration regardless of changes in its value. As a result, the
Portfolio's access to other assets

B-14
<PAGE>

held to cover its options or futures positions also could be impaired. (See
"EXCHANGE TRADED AND OVER-THE-COUNTER OPTIONS" above for a discussion of the
liquidity of options not traded on an exchange.)

POSITION LIMITS. Futures exchanges can limit the number of futures
and options on futures contracts that can be held or controlled by an entity.
If an adequate exemption cannot be obtained, a Portfolio or the Adviser may be
required to reduce the size of its futures and options positions or may not be
able to trade a certain futures or options contract in order to avoid exceeding
such limits.

ASSET COVERAGE FOR FUTURES CONTRACTS AND OPTIONS POSITIONS. The
Portfolios intend to comply with Section 4.5 of the regulations under the
Commodity Exchange Act, which limits the extent to which a Portfolio can commit
assets to initial margin deposits and option premiums. In addition, the
Portfolios will comply with guidelines established by the SEC with respect to
coverage of options and futures contracts by mutual funds, and if the guidelines
so require, will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account
cannot be sold while the futures contract or option is outstanding, unless they
are replaced with other suitable assets. As a result, there is a possibility
that segregation of a large percentage of a Portfolio's assets could impede
portfolio management or the Portfolio's ability to meet redemption requests or
other current obligations.

RISK MANAGEMENT

The Portfolios may employ non-hedging risk management techniques.
Examples of such strategies include synthetically altering the duration of a
portfolio or the mix of securities in a portfolio. For example, if the Adviser
wishes to extend maturities in a fixed income portfolio in order to take
advantage of an anticipated decline in interest rates, but does not wish to
purchase the underlying long-term securities, it might cause the Portfolio to
purchase futures contracts on long-term debt securities. Similarly, if the
Adviser wishes to decrease fixed income securities or purchase equities, it
could cause the Portfolio to sell futures contracts on debt securities and
purchase future contracts on a stock index. Such non-hedging risk management
techniques are not speculative, but because they involve leverage include, as do
all leveraged transactions, the possibility of losses as well as gains that are
greater than if these techniques involved the purchase and sale of the
securities themselves rather than their synthetic derivatives.

INVESTMENT RESTRICTIONS

FUNDAMENTAL INVESTMENT RESTRICTIONS

The investment restrictions below have been adopted by the Trust with
respect to each Portfolio. Except where otherwise noted, these investment
restrictions are "fundamental" policies that, under the 1940 Act, may not be
changed without the vote of a majority of the outstanding voting securities of
the Portfolio to which it relates. A "majority of the outstanding voting
securities" is defined in the 1940 Act as the lesser of (a) 67% or more of the
shares present at a shareholders meeting if the holders of more than 50% of the
outstanding shares are present and represented by proxy, or (b) more than 50% of
the outstanding shares. The percentage limitations contained in the
restrictions below apply at the time of the purchase of securities.

B-15
<PAGE>

Unless Sections 8(b)(1) and 13(a) of the 1940 Act or any SEC or SEC
Staff interpretations thereof are amended or modified, no Portfolio may:

1. Purchase any security if, as a result, more than 25% of the value of
the Portfolio's total assets would be invested in securities of
issuers having their principal business activities in the same
industry. This limitation shall not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities;

2. Borrow money, except that the Portfolio may (i) borrow money from
banks for temporary or emergency purposes (not for leveraging
purposes) and (ii) enter into reverse repurchase agreements for any
purpose; provided that (i) and (ii) in total do not exceed 33-1/3% of
the value of the Portfolio's total assets (including the amount
borrowed) less liabilities (other than borrowings). If at any time
any borrowings come to exceed 33-1/3% of the value of the Portfolio's
total assets, the Portfolio will reduce its borrowings within three
business days to the extent necessary to comply with the 33-1/3%
limitation;

3. With respect to 75% of its total assets, purchase any security if, as
a result, (a) more than 5% of the value of the Portfolio's total
assets would be invested in securities or other obligations of any one
issuer or (b) the Portfolio would hold more than 10% of the
outstanding voting securities of that issuer. This limitation shall
not apply to U.S. Government securities (as defined in the 1940 Act);

4. Make loans to other persons, except through the purchase of debt
obligations (including privately placed securities), loans of
portfolio securities, and participation in repurchase agreements;

5. Purchase or sell physical commodities or contracts thereon, unless
acquired as a result of the ownership of securities or instruments,
but the Portfolio may purchase or sell futures contracts or options
(including options on futures contracts, but excluding options or
futures contracts on physical commodities) and may enter into foreign
currency forward contracts;

6. Purchase or sell real estate, but the Portfolio may purchase or sell
securities that are secured by real estate or issued by companies
(including real estate investment trusts) that invest or deal in real
estate;

7. Underwrite securities of other issuers, except to the extent the
Portfolio, in disposing of portfolio securities, may be deemed an
underwriter within the meaning of the Securities Act of 1933, as
amended; or

8. Issue senior securities, except as permitted under the 1940 Act or any
rule, order or interpretation thereunder.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS

The investment restrictions that follow are not fundamental policies
of the

B-16
<PAGE>

respective Portfolios and may be changed by the Board.

JPM TREASURY MONEY MARKET PORTFOLIO may not:

(i) Acquire any illiquid securities if as a result thereof, more than
10% of the market value of the Portfolio's total assets would be in investments
that are illiquid.

JPM BOND, EQUITY, SMALL COMPANY AND INTERNATIONAL EQUITY PORTFOLIOS
may not:

(i) Acquire securities of other investment companies, except as
permitted by the 1940 Act or any rule, order or interpretation thereunder, or in
connection with a merger, consolidation, reorganization, acquisition of assets
or an offer of exchange;

(ii) Invest in warrants (other than warrants acquired by the
Portfolio as part of a unit or attached to securities at the time of purchase)
if, as a result, the investments (valued at the lower of cost or market) would
exceed 5% of the value of the Portfolio's net assets or if, as a result, more
than 2% of the Portfolio's net assets would be invested in warrants not listed
on a recognized U.S. or foreign stock exchange, to the extent permitted by
applicable state securities laws;

(iii) Acquire any illiquid securities if, as a result thereof, more
than 15% of the market value of the Portfolio's total assets would be in
investments that are illiquid;

(iv) Purchase any security if, as a result, the Portfolio would then
have more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for fewer than
three years;

(v) Sell any security short, unless it owns or has the right to
obtain securities equivalent in kind and amount to the securities sold or unless
it covers such short sales as required by the current rules or positions of the
SEC or its Staff. Transactions in futures contracts and options shall not
constitute selling securities short;

(vi) Purchase securities on margin, but the Portfolio may obtain such
short-term credits as may be necessary for the clearance of transactions;

(vii) Purchase securities of any issuer if, to the knowledge of the
Trust, any of the Trust's officers or Trustees or any officer of the Adviser,
would after the Portfolio's purchase of the securities of such issuer,
individually own more than 1/2 of 1% of the issuer's outstanding securities and
such persons owning more than 1/2 of 1% of such securities together beneficially
would own more than 5% of such securities, all taken at market; or

(viii) Invest in real estate limited partnerships or purchase
interests in oil, gas or mineral exploration or development programs or leases.

B-17
<PAGE>

TRUSTEES AND OFFICERS

The Trustees and officers of the Trust, their business addresses, and
their principal occupations during the past five years are set forth below.

Name, Address Position with Principal Occupations
and Age Trust During Past Five Years
- ------------- ------------- ----------------------

<S> <C> <C>
John R. Rettberg Trustee Retired; Consultant, Northrop
79-165 Montego Bay Drive Grumman Corporation ("Northrop")
Bermuda Dunes, California (since January, 1995);
92201 (59) Corporate Vice President and
Treasurer, Northrop (prior to
January, 1995); Director,
Independent Colleges of Southern
California (prior to 1994); Director,
Junior Achievement (prior to 1993).

John F. Ruffle* Trustee Retired; Consultant, J.P.
2234 Oyster Catcher Court Morgan & Co. Incorporated (since
Seabrook Island, South June, 1993); Director and Vice
Carolina 29455 (59) Chairman of J.P. Morgan & Co.
Incorporated (prior to June 1993);
Director, Trident Corporation
(since April, 1994); Director,
Bethlehem Steel Corporation
(since September, 1990); Trustee,
Johns Hopkins University (since
April, 1990); Trustee, Overlook
Hospital Foundation (since April,
1990); Director, Student Loan
Marketing Association (since
April, 1990).

Kenneth Whipple, Jr. Trustee Executive Vice President, Ford
1115 Country Club Drive Motor Company, President, Ford
Bloomfield Hills, Michigan Financial Services Group, and
48304 (62) Director, Ford Motor Credit
Company (since 1988); Director
and President, Ford Holdings, Inc.
(since 1989); Director, CMS Energy
Corporation and Consumers Power
Company (since January, 1993);
Director, Detroit Country Day School
(since
</TABLE>

- -------------------------
"Interested person" within the meaning of Section 2(a) of the 1940 Act.

B-18
<PAGE>

Name, Address Position with Principal Occupations
and Age Trust During Past Five Years
- ------------- ------------- ----------------------

<S> <C> <C>
January, 1993); Director,
Granite Management Corporation
(formerly First Nationwide Financial
Corporation) and Granite Savings Bank
(formerly First Nationwide Bank)
(since 1988); Director, United Way
of Southeastern Michigan (since 1988);
Director, USL Capital Corporation
(since 1988); Chairman, Director
and First Vice President, WTVS-TV
(since 1988).

John N. Bell Retired; Assistant Treasurer
462 Lenox Avenue at Consolidated Edison Company of
South Orange, New Jersey 07079 (65) New York, Inc.(since 1972).

Charles E. Clough Manager, Freedom Energy Company LLC
507 Dolly Road (since 1995); Chairman of the Board
Contoocock, New Hampshire 03229 (66) and Chief Executive Officer of
Nashua Corporation (prior to 1995);
Director, Pinnichuck Western Works
(since 1960); Director, Hitchinen
Manufacturing Company (since 1985).
</TABLE>

B-19
<PAGE>
The Trust will pay its Trustees who are not interested persons of the Trust
an annual retainer of $20,000 and reimburse them for their expenses. Mr.
Clough, who will continue to serve as a Trustee of the Trust until the Trust's
1996 audit has been approved, will not receive an annual retainer but will be
reimbursed for his expenses. The estimated aggregate amount of compensation to
be paid to each Trustee by the Trust for the fiscal year ending December 31,
1997 is as follows:

Estimated
Compensation
Name of Trustee From Trust
- --------------- ------------
John R. Rettberg $20,000
John F. Ruffle $20,000
Kenneth Whipple, Jr. $20,000
John N. Bell $20,000
Charles E. Clough 0

OFFICERS OF THE TRUST

RICHARD W. INGRAM; 40; President and Treasurer. Senior Vice President and
Director of Client Services and Treasury Administration of FDI, Senior Vice
President of Premier Mutual Fund Services, Inc., an affiliate of FDI ("Premier
Mutual"), and an officer of other investment companies advised or administered
by Morgan or its affiliates. From March 1994 to November 1995, Mr. Ingram was
Vice President and Division Manager of First Data Investor Services Group, Inc.
From 1989 to 1994, Mr. Ingram was Vice President, Assistant Treasurer and Tax
Director - Mutual Funds of The Boston Company, Inc.

MARIE E. CONNOLLY; 38; Vice President and Assistant Treasurer. President
and Chief Executive Officer and Director of FDI, Premier Mutual and an officer
of other investment companies advised or administered by Morgan or its
affiliates. From December 1991 to July 1994, she was President and Chief
Compliance Officer of FDI. Prior to December 1991, she served as Vice President
and Controller, and later as Senior Vice President of The Boston Company
Advisors, Inc. ("TBCA").

JOHN E. PELLETIER; 32; Vice President and Secretary. Senior Vice President
and General Counsel of FDI and Premier Mutual and an officer of other investment
companies advised or administered by Morgan or its affiliates. From February
1992 to April 1994, Mr. Pelletier served as Counsel for TBCA. From August 1990
to February 1992, Mr. Pelletier was employed as an Associate at Ropes & Gray.

JOSEPH F. TOWER III; 34; Vice President and Assistant Treasurer. Senior
Vice President, Treasurer and Chief Financial Officer of FDI and Premier Mutual
and an officer of other

B-20

<PAGE>

investment companies advised or administered by Morgan or its affiliates. From
July 1988 to November 1993, Mr. Tower was Financial Manager of The Boston
Company, Inc.

CHRISTOPHER J. KELLEY; 31; Vice President and Assistant Secretary. Vice
President and Assistant General Counsel of FDI and an officer of other
investment companies advised or administered by Morgan or its affiliates. From
April 1994 to July 1996, Mr. Kelley was Assistant Counsel at Forum Financial
Group. From 1992 to 1994, Mr. Kelley was employed by Putnam Investments in the
Global Fixed Income Group of the Legal Department. Prior to 1992, Mr. Kelley
served as a law clerk for the firm of Murphy, DeMarco & O'Neill.

ELIZABETH A. BACHMAN; 27; Vice President and Assistant Secretary.
Assistant Vice President of FDI and Premier Mutual and an officer of other
investment companies advised or administered by Morgan or its affiliates.

MARY A. NELSON; 32; Vice President and Assistant Treasurer. Vice President
and Manager of Treasury Services and Administration of FDI and an officer of
other investment companies advised or administered by Morgan or its affiliates.
From 1989 to 1994, Ms. Nelson was an Assistant Vice President and client manager
for The Boston Company, Inc.

KAREN JACOPPO-WOOD; 29; Vice President and Assistant Secretary. Assistant
Vice President of FDI and an officer of other investment companies advised or
administered by Morgan or its affiliates. From June 1994 to January 1996, Ms.
Jacoppo-Wood was a Manager, SEC Registration, Scudder, Stevens & Clark, Inc.
From 1988 to May 1994, Ms. Jacoppo-Wood was a senior paralegal at TBCA.

DOUGLAS C. CONROY; 27; Vice President and Assistant Treasurer. Supervisor
of Treasury Services and Administration of FDI and an officer of other
investment companies advised or administered by Morgan or its affiliates. From
April 1993 to January 1995, Mr. Conroy was a Senior Fund Accountant for
Investors Bank & Trust Company. From December 1993 to March 1993, Mr. Conroy
was employed as a fund accountant at The Boston Company, Inc.

The business address of each of the officers is 60 State Street, Boston,
Massachusetts 02109.

INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISORY AGREEMENT

The Trust has entered into an Investment Advisory Agreement with Morgan
with respect to each of the Portfolios. Morgan is a wholly-owned subsidiary of
J.P. Morgan & Co. Incorporated ("J.P. Morgan"). See "MANAGEMENT OF TRUST AND
PORTFOLIOS" in the Prospectus.

The Investment Advisory Agreement provides that Morgan, subject to control
and review by the Board, is responsible for the overall management and
supervision of each Portfolio. Morgan makes each Portfolio's day-to-day
investment decisions to buy, sell or hold any particular security or other
instrument.

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Morgan and its affiliates provide investment advice to other clients,
including, but not limited to, mutual funds, individuals, pension funds and
other institutional investors. Some of the advisory accounts of Morgan and its
affiliates may have investment objectives and investment programs similar to
those of the Portfolios. Accordingly, occasions may arise when securities that
are held by other advisory accounts, or that are currently being purchased or
sold for other advisory accounts, are also being selected for purchase or sale
for a Portfolio. It is the practice of Morgan and its affiliates to allocate
such purchases or sales insofar as feasible among their several clients in a
manner they deem equitable, to all accounts involved. While in some cases this
procedure may adversely affect the price or number of shares involved in the
Trust's transaction, it is believed that the equitable allocation of purchases
and sales generally contributes to better overall execution of the Trust's
portfolio transactions. It also is the policy of Morgan and its affiliates not
to favor any one account over the other.

For providing investment advisory and management services to the Trust,
Morgan receives monthly compensation from the Trust at annual rates computed as
described under "MANAGEMENT OF THE TRUST AND PORTFOLIOS" in the Prospectus.

The Investment Advisory Agreement was approved by the Board on October 25,
1996 and by shareholders on December 12, 1996. Unless earlier terminated, the
Agreement will remain in effect as to the applicable Portfolio until December
31, 1997 and thereafter from year to year with respect to each such Portfolio,
if approved annually (1) by the Board or by a majority of the outstanding shares
of the Portfolio, and (2) by a majority of members of the Board who are not
interested persons, within the meaning of the 1940 Act, of any party to such
Agreement. The Agreement is not assignable and may be terminated without
penalty, with respect to any Portfolio, by vote of a majority of the Trust's
Trustees or by the requisite vote of the shareholders of that Portfolio on 60
days' written notice to Morgan, or by Morgan on 90 days' written notice to the
Trust. See "CAPITAL SHARES" in this Statement of Additional Information.

ADMINISTRATIVE SERVICES AGREEMENT

The Trust has entered into an Administrative Services Agreement with Morgan
Guaranty Trust Company of New York ("Morgan Guaranty"), an affiliate of Morgan,
effective January 1, 1997. Pursuant to the Administrative Services Agreement,
Morgan Guaranty provides or arranges for the provision of certain financial and
administrative services and oversees fund accounting for the Trust. The
services to be provided by Morgan Guaranty under the Administrative Services
Agreement include, but are not limited to, services related to taxes, financial
statements, calculation of Portfolio performance data, oversight of service
providers, certain regulatory and Board of Trustees matters, and shareholder
services. In addition, Morgan Guaranty is responsible for reimbursing the Trust
for certain usual and customary expenses incurred by the Trust including,
without limitation, transfer, registrar and dividend disbursing costs, custody
fees, legal and accounting expenses, fees of the Trust's co-administrator,
insurance premiums, compensation and expenses of the Trust's Trustees, expenses
of printing and mailing reports, notices and proxies to shareholders, and
registration fees under federal and state securities laws. See "MANAGEMENT OF
TRUST AND PORTFOLIOS" in the Prospectus.

For providing its services under the Administrative Services Agreement,
Morgan Guaranty receives monthly compensation from the Trust at annual rates
computed as described under "MANAGEMENT OF THE TRUST AND PORTFOLIOS" in the
Prospectus. However,

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the Administrative Services Agreement also provides that until December 31,
1998, the aggregate fees, expressed in dollars, paid by a Portfolio under the
Administrative Services Agreement and the Investment Advisory Agreement will not
exceed the expenses (excluding extraordinary expenses) that would be payable by
such Portfolio assuming (i) the prior management agreement remained in effect
in accordance with its terms, (ii) the asset levels were the same, (iii) no
effect was given to the voluntary expense reimbursement arrangements or other
limitation on expenses under such prior agreement and (iv) the expenses the
Portfolio would have been charged were adjusted to reflect differences in
services provided under the prior management agreement, on the one hand, and the
Administrative Services Agreement and Investment Advisory Agreement, on the
other.

The Administrative Services Agreement may be amended only by mutual written
consent; provided, however, that until December 31, 1998, no amendment shall be
made to (a) increase the fees payable by the Trust, on behalf of a Portfolio, to
Morgan Guaranty or (b) change the types of services to be rendered or expenses
to be borne under the Agreement by Morgan Guaranty without the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the relevant Portfolio(s). See "CAPITAL SHARES" in this Statement of Additional
Information.

The Administrative Services Agreement was approved by the Board on October
25, 1996. The Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty, by the Board or, after December 31, 1998, by
Morgan Guaranty on not more than 60 days' nor less than 30 days' written notice
to the other party.

PRIOR MANAGEMENT ARRANGEMENTS

Prior to January 1, 1997, Chubb Investment Advisory Corporation ("Chubb
Investment Advisory") provided investment advisory and management services to
the Trust pursuant to separate management agreements with each Portfolio. Chubb
Investment Advisory engaged Morgan Guaranty to provide sub-investment advisory
services to the Portfolios pursuant to separate Sub-Investment Advisory
Agreements with each Portfolio. The fees payable to Morgan Guaranty for its sub-
advisory services were paid by Chubb Investment Advisory.

For the period January 3, 1995 (commencement of operations) through
December 31, 1995, the management fees payable to Chubb Investment Advisory for
JPM Treasury Money Market Portfolio, JPM Bond Portfolio, JPM Equity Portfolio,
JPM Small Company Portfolio and JPM International Equity Portfolio amounted to
$4,520, $6,224, $16,451, $19,131 and $24,543, respectively, which amounts were
reduced pursuant to an undertaking by Chubb Investment Advisory.

For the period January 3, 1995 (commencement of operations) through
December 31, 1995, the sub-advisory fees payable by Chubb Investment Advisory to
Morgan Guaranty for JPM Treasury Money Market Portfolio, JPM Bond Portfolio, JPM
Equity Portfolio, JPM Small Company Portfolio and JPM International Equity
Portfolio amounted to $2,260, $3,734, $10,967, $14,348 and $18,407,
respectively, which amounts were reduced pursuant to an undertaking by Morgan
Guaranty.

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<PAGE>

INDEPENDENT AUDITORS

Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts 02116,
currently serves as the independent auditors of the Trust. Price Waterhouse LLP
has been selected as the independent auditors of the Trust for the fiscal year
commencing January 1, 1997. The financial statements of the Trust incorporated
by reference in this Statement of Additional Information and the related
financial highlights included in the Prospectus for the period January 3, 1995
(commencement of operations) to December 31, 1995 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon, which
also is incorporated by reference herein, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

CUSTODIAN

State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02101, serves as the Trust's Custodian and Transfer and
Dividend Disbursing Agent. Pursuant to the Custodian Contract with the Trust,
State Street is responsible for maintaining the books and records of portfolio
transactions and holding portfolio securities and cash. State Street also keeps
the books of account for the Trust.

The Trust has also appointed, with the approval of the Board, and in the
future may appoint from time to time, sub-custodians, qualified under Rule 17f-5
of the 1940 Act, with respect to certain foreign securities. The Trust may
authorize State Street to enter into an agreement with any U.S. banking
institution or trust company to act as a sub-custodian pursuant to a resolution
of the Board. Securities owned by the Trust subject to repurchase agreements
may be held in the custody of other U.S. banks.

PAYMENT OF EXPENSES

Morgan Guaranty is obligated to assume the cost of certain administrative
expenses for the Trust, as described in the Prospectus under the heading
"MANAGEMENT OF THE TRUST AND PORTFOLIOS." The Trust is responsible for Morgan's
fees as investment adviser pursuant to the Investment Advisory Agreement and for
Morgan Guaranty's services pursuant to the Administrative Services Agreement.
In addition, the Trust pays all extraordinary expenses not incurred in the
ordinary course of the Trust's business including, but not limited to,
litigation and indemnification expenses; interest charges; material increases in
Trust expenses due to occurrences such as significant increases in the fee
schedules of the Custodian or the Transfer Agent or a significant decrease in
the Trust's asset level due to changes in tax or other laws or regulations; or
other such extraordinary occurrences outside of the ordinary course of the
Trust's business. See "OFFERING AND REDEMPTION OF SHARES" below.

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS

Under the Investment Advisory Agreement, Morgan has ultimate authority to
select broker-dealers through which securities are to be purchased and sold,
subject to the general control of the Board.

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<PAGE>

Money market instruments usually will be purchased on a principal basis
directly from issuers, underwriters or dealers. Accordingly, minimal brokerage
charges are expected to be paid on such transactions. Purchases from an
underwriter generally include a commission or concession paid by the issuer, and
transactions with a dealer usually include the dealer's mark-up.

Insofar as known to management, no trustee, director or officer of the
Trust, Morgan or any person affiliated with any of them has any material direct
or indirect interest in any broker-dealer employed by or on behalf of the Trust.

In selecting broker-dealers to execute transactions for the Trust, Morgan
is obligated to use its best effort to obtain for each Portfolio the most
favorable overall price and execution available, considering all the
circumstances. Such circumstances include the price of the security, the size
of the broker-dealer's "spread" or commission, the willingness of the broker-
dealer to position the trade, the reliability, financial strength and stability
and operational capabilities of the broker-dealer, the ability to effect the
transaction at all where a large block is involved, the availability of the
broker-dealer to stand ready to execute possibly difficult transactions in the
future, including broker-dealers who specialize in any Canadian or foreign
securities held by the Portfolios. Such considerations are judgmental and are
weighed by Morgan in seeking the most favorable overall economic result for the
Trust, including past experience as to choosing qualified broker-dealers.

Notwithstanding the foregoing, however, and subject to appropriate policies
and procedures as then approved by the Board, Morgan is authorized to allocate
portfolio transactions to broker-dealers who have provided brokerage and
research services, as such services are defined in Section 28(e) of the
Securities and Exchange Act of 1934, for the Portfolios or other advisory
accounts as to which Morgan may cause the Portfolios to pay a broker-dealer a
commission for effecting a securities transaction in excess of the amount
another broker-dealer would have charged for effecting the same transaction, if
Morgan determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services, as defined above,
provided by such broker-dealer viewed in terms of either that particular
transaction or the overall responsibilities of Morgan with respect to the
Portfolios or their other advisory accounts. Such brokerage and research
services may include, among other things, analyses and reports concerning
issuers, industries, securities, economic factors and trends, and, portfolio
strategy. Such brokerage and research services may be used by Morgan in
connection with any other advisory accounts managed by it. Conversely, research
services for any other advisory accounts may be used by Morgan in managing the
investments of a Portfolio. Morgan also may receive from such broker-dealers
quotations for Portfolio valuation purposes, provided that this results in no
additional cost to the Trust.

As of December 31, 1995, JPM Equity Portfolio held 1,200 shares of Dean
Witter Discover & Co. with a value of $56,400; JPM Small Company Portfolio held
100 shares of Donaldson, Lufkin, Jenrette with a value of $3,125; and JPM
International Equity Portfolio held 500 shares of Deutsche Bank with a value of
$23,791; 4,000 shares of Daiwa Bank with a value of $31,740; 2,000 shares of
Nomura Securities Corp. Ltd. with a value of $43,625; 2,750 shares of HSBC
Holdings with a value of $42,372 and 1,000 shares of Barclays Bank with a value
of $11,475, all of which are regular brokers of the Trust.

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<PAGE>

For the year ended December 31, 1995, the Trust paid in the aggregate
$39,294 as brokerage commissions. No commissions were allocated for research.

Portfolio turnover for each Portfolio may vary from year to year or within
a year depending upon economic and business conditions. The annual portfolio
turnover rates for the Portfolios in 1995 were approximately as follows: 239%
for JPM Bond Portfolio, 66% for JPM Equity Portfolio, 100% for JPM Small Company
Portfolio and 68% for JPM International Equity Portfolio. A Portfolio having a
turnover rate in excess of 100% may realize larger amounts of gains or losses
than it would with a lower portfolio turnover rate. A Portfolio turnover rate
in excess of 100% may result in a Portfolio paying more brokerage commissions or
other transaction related costs. A Portfolio turnover in excess of 100% may be
considered high due to the following factors: (1) the need to restructure the
Portfolio due to changing market and/or economic conditions; (2) the need to
rebalance the Portfolio as securities age down the yield curve; (3) the need to
trade securities whose characteristics are affected by moderate to large changes
in interest rates and (4) value added to trading opportunities.

CAPITAL SHARES

The authorized capital of the Trust consists of an unlimited number of
outstanding shares which are divided into five series: JPM Treasury Money
Market Portfolio, JPM Bond Portfolio, JPM Equity Portfolio, JPM Small Company
Portfolio and JPM International Equity Portfolio. The Trust has the right to
issue additional shares without the consent of shareholders, and may allocate
its additional shares to new series or to one or more of the five existing
series.

The assets received by the Trust for the issuance or sale of shares of each
Portfolio and all income, earnings, profits and proceeds thereof are
specifically allocated to each Portfolio. They constitute the underlying assets
of each Portfolio, are required to be segregated on the books of accounts and
are to be charged with the expenses of such Portfolio. Any assets which are not
clearly allocable to a particular Portfolio or Portfolios are allocated in a
manner determined by the Board. Accrued liabilities which are not clearly
allocable to one or more Portfolios would generally be allocated among the
Portfolios in proportion to their relative net assets before adjustment for such
unallocated liabilities. Each issued and outstanding share in a Portfolio is
entitled to participate equally in dividends and distributions declared with
respect to such Portfolio and in the net assets of such Portfolio upon
liquidation or dissolution remaining after satisfaction of outstanding
liabilities.

The shares of each Portfolio are fully paid and non-assessable, will have
no preference, preemptive, conversion, exchange or similar rights, and will be
freely transferable. Shares do not have cumulative voting rights.

As of December 26, 1996, Chubb Life owned as of record and beneficially
the following percentages of the Trust's Portfolios in its General Account:
76.02% of JPM Treasury Money Market Portfolio, 41.06% of JPM Bond Portfolio,
27.56% of JPM Equity Portfolio, 51.27% of JPM Small Company Portfolio, and
38.83% of JPM International Equity Portfolio. Chubb Life's ownership of more
than 25% of the shares of each of the Trust's Portfolios may result in Chubb
Life being deemed to be a controlling entity of each Portfolio. Chubb Separate
Account C, a separate account established by Chubb Life, owned of record as of
December 26, 1996 the following percentages of the Trust's Portfolios: 23.98% of
JPM Treasury Money Market Portfolio,

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<PAGE>

58.94% of JPM Bond Portfolio, 72.44% of JPM Equity Portfolio, 48.73% of JPM
Small Company Portfolio, and 61.17% of JPM International Equity Portfolio.

The shares held by Chubb Life or its affiliated insurance companies,
including shares for which no voting instructions have been received, shares
held in a separate account representing charges imposed by Chubb Life or its
affiliates and shares held by Chubb Life that are not otherwise attributable to
Policies, will be voted by Chubb Life or its affiliated insurance companies in
proportion to instructions received from the owners of Policies. Chubb Life and
its affiliated insurance companies reserve the right to vote any or all such
shares at their discretion to the extent consistent with then current
interpretations of the 1940 Act and rules thereunder.

The officers and Trustees cannot directly own shares of the Trust without
purchasing a Policy or investing as a participant in an Eligible Plan. As of
December 26, 1996, the amount of shares owned by the officers and Trustees as a
group was less than 1% of each Portfolio.

OFFERING AND REDEMPTION OF SHARES

The Trust offers shares of each Portfolio only for purchase by separate
accounts established by Participating Insurance Companies or by Eligible Plans.
It thus will serve as an investment medium for the Policies offered by
Participating Insurance Companies and for participants in Eligible Plans. The
offering is without a sales charge and is made at each Portfolio's net asset
value per share, which is determined in the manner set forth below under
"DETERMINATION OF NET ASSET VALUE."

The Trust redeems all full and fractional shares of the Trust at the net
asset value per share applicable to each Portfolio. See "DETERMINATION OF NET
ASSET VALUE" below.

Redemptions ordinarily are made in cash, but the Trust has authority, at
its discretion, to make full or partial payment by assignment to the separate
account of Portfolio securities at their value used in determining the
redemption price. The Trust, nevertheless, pursuant to Rule 18f-1 under the
1940 Act, has filed a notification of election on Form N-18f-1, by which the
Trust has committed itself to pay to the separate account in cash, all such
separate account's requests for redemption made during any 90-day period, up to
the lesser of $250,000 or 1% of the applicable Portfolio's net asset value at
the beginning of such period. The securities, if any, to be paid in-kind to the
separate account will be selected in such manner as the Board deems fair and
equitable. In such cases, the separate account or Eligible Plan might incur
brokerage costs should it wish to liquidate these portfolio securities.

The right to redeem shares or to receive payment with respect to any
redemption of shares of any Portfolio may only be suspended (1) for any period
during which trading on the New York Stock Exchange is restricted or such
Exchange is closed, other than customary weekend and holiday closings, (2) for
any period during which an emergency exists as a result of which disposal of
securities or determination of the net asset value of that Portfolio is not
reasonably practicable, or (3) for such other periods as the SEC may by order
permit for the protection of shareholders of the Portfolio.

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DETERMINATION OF NET ASSET VALUE

The net asset value of the shares of each Portfolio of the Trust is
normally determined as of 4:15 p.m (Eastern Standard Time), on each day during
which the New York Stock Exchange is open for trading. The New York Stock
Exchange is open from Monday through Friday except on the following national
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. In the event
that any of the above holidays falls on a Saturday or Sunday, it is regularly
observed on the preceding Friday or following Monday, respectively. The net
asset value per share of each Portfolio is computed by dividing the sum of the
value of the securities held by that Portfolio, plus any cash or other assets
and minus all liabilities by the total number of outstanding shares of the
Portfolio at such time. Any expenses borne by the Trust, including the
investment advisory fee payable to the Adviser, are accrued daily except for
extraordinary or non-recurring expenses. See "INVESTMENT ADVISORY AND OTHER
SERVICES" above.

The value of investments listed on a domestic securities exchange, other
than options on stock indexes, generally is based on the last sale prices on the
New York Stock Exchange at 4:00 p.m. or, in the absence of recorded sales, at
the average of readily available closing bid and asked prices on such exchange.
Securities listed on a foreign exchange are valued at the last quoted sale price
available before the time when net assets are valued. Unlisted securities are
valued at the average of the quoted bid and asked prices in the over-the-counter
market. The value of each security for which readily available market
quotations exist is based on a decision as to the broadest and most
representative market for such security. For purposes of calculating net asset
value per share, all assets and liabilities initially expressed in foreign
currencies will be converted into United States dollars at the prevailing market
rates available at the time of valuation.

Options on stock indexes traded on national securities exchanges are valued
at the close of options trading on such exchanges which is currently 4:10 p.m.,
New York time. Stock index futures and related options, which are traded on
commodities exchanges, are valued at their last sales price as of the close of
such commodities exchanges which is currently 4:15 p.m., New York time.

Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Trustees. Such
procedures include the use of independent pricing services which use prices
based upon yields or prices of securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions.

Short-term investments which mature in 60 days or less are valued at
amortized cost, if their original maturity was 60 days or less, or by amortizing
their value on the 61st day prior to maturity, if their original maturity when
acquired by the Portfolio was more than 60 days, unless this is determined not
to represent fair value by the Trustees.

Trading in securities on most foreign exchanges and OTC markets normally is
completed before the close of trading on the New York Stock Exchange and also
may take place on days on which the New York Stock Exchange is closed. If
events materially affecting the value of securities occur between the time when
the exchange on which they are traded closes and the

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<PAGE>

time when the Portfolio's net asset value is calculated, such securities will be
valued at fair value in accordance with procedures established by and under the
general supervision of the Trustees.

TAXES

In order for each Portfolio of the Trust to qualify for federal income tax
treatment as a regulated investment company, at least 90% of its gross income
for a taxable year must be derived from qualifying income, i.e., dividends,
interest, income derived from loans of securities, and gains from the sale of
securities. In addition, in general, gains realized on the sale or other
disposition of securities held for less than three months must be limited to
less than 30% of each Portfolio's annual gross income. It is the Trust's policy
to comply with the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), regarding distribution of investment income and capital gains so
that each Portfolio will not be subject to federal income tax on amounts
distributed and undistributed or an excise tax on certain undistributed income
or capital gains. For these purposes, if a regulated investment company
declares a dividend in December to shareholders of record in December and pays
such dividends before the end of January they will be treated as paid in the
preceding calendar year and to have been received by such shareholder in
December.

FEDERAL TAX MATTERS. A Policy owner's interest in earnings on assets held
in a separate account and invested in the Trust are not includable in the Policy
owner's gross income because the Policies presently qualify as life insurance
contracts for federal income tax purposes.

The Trust intends that each Portfolio comply with Section 817(h) of the
Code and the regulations thereunder. Pursuant to that Section, the only
shareholders of the Trust and its Portfolios will be separate accounts funding
variable annuities and variable life insurance policies established by one or
more insurance companies and, pursuant to Treasury Regulation SECTION 1.817-
5(f)(3)(iii), qualified pension and retirement plans.

The Internal Revenue Service defines the term "qualified pension or
retirement plan" for the purposes of such Regulation SECTION 1.817-5(f)(3)(iii).
It provides in pertinent part, as follows:

1. A plan described in Section 401(a) that includes a trust exempt
from tax under Section 501(a);

2. An annuity plan described in Section 403(a);

3. An annuity contract described in Section 403(b), including a
custodial account described in Section 403(b)(7);

4. An individual retirement account described in Section 408(a);

5. An individual retirement annuity described in Section 408(b);

6. A governmental plan within the meaning of Section 414(d) or an
eligible deferred compensation plan within the meaning of Section 457(b);

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<PAGE>

7. A simplified employee pension of an employer that satisfies the
requirements of Section 408(k);

8. A plan described in Section 501(c)(18); and

9. Any other trust, plan, account, contract or annuity that the
Internal Revenue Service has determined in a letter ruling to be within the
scope of such Regulation.

In addition, Section 817(h) of the Code and the regulations thereunder
impose diversification requirements on the separate accounts and on the
Portfolios. These diversification requirements are in addition to the
diversification requirements imposed by the Code for the Portfolios to be
treated as regulated investment companies. Failure to meet the requirements of
Section 817(h) could result in taxation to the Participating Insurance Companies
and the immediate taxation of the owners of the Policies funded by the Trust.

PERFORMANCE AND YIELD INFORMATION

MONEY MARKET PORTFOLIO

JPM Treasury Money Market Portfolio's yield is its investment income, less
expenses, expressed as a percentage of assets on an annualized basis for a
seven-day period. The yield does not reflect the fees and charges imposed on
the assets of separate account.

The simple annualized yield is computed by determining the net change
(exclusive of realized gains and losses from the sale of securities and
unrealized appreciation and depreciation) in the value of a hypothetical pre-
existing account having a balance of one share at the beginning of the seven-day
period, dividing the net change in account value by the value of the account at
the beginning of the period, and annualizing the resulting quotient (base period
return) on a 365-day basis. The net change in account value reflects the value
of additional shares purchased with dividends from the original shares in the
account during the seven-day period, dividends declared on such additional
shares during the period, and expenses accrued during the period.

The compounded effective yield is computed by determining the unannualized
base period return, adding one to the base period return, raising the sum to a
power equal to 365 divided by seven and subtracting one from the result.

NON-MONEY MARKET PORTFOLIOS

This yield figure represents the net annualized yield based on specified
30-day (or one month) period assuming a reinvestment semiannual compounding of
income. Yield is calculated by dividing the average daily net investment income
per share earned during the specified period by the maximum offering price,
which is net asset value per share on the last day of the period, and
annualizing the result according to the following formula:

Yield = 2 [(A-B + 1) to the power of 6 - 1]
---
CD

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<PAGE>

where A equals dividends and interest earned during the period, B equals
expenses accrued for the period (net of waiver and reimbursements), C equals the
average daily number of shares outstanding during the period that were entitled
to receive dividends, and D equals the maximum offering price per share on the
last day of the period.

The average annual total return figures represent the average annual
compounded rate of return for the stated period. Average annual total return
quotations reflect the percentage change between the beginning value of a static
account in the Portfolio and the ending value of that account measured by the
then current net asset value of that Portfolio assuming that all dividends and
capital gains distributions during the stated period were reinvested in shares
of the Portfolio when paid. Total return is calculated by finding the average
annual compounded rates of return of a hypothetical investment that would
compare the initial amount to the ending redeemable value of such investment
according to the following formula:

P (1 + T) to the power of n = ERV

where T equals average annual total return, where ERV, the ending redeemable
value, is the value, at the end of the applicable period, of a hypothetical
$10,000 payment made at the beginning of the applicable period, where P equals a
hypothetical initial payment of $10,000, and where N equals the number of years.

From time to time, in reports and sales literature: (1) each Portfolio's
performance or P/E ratio may be compared to, as applicable: (i) the S&P 500
Index and Dow Jones Industrial Average so that, as applicable, an investor may
compare that Portfolio's results with those of a group of unmanaged securities
widely regarded by investors as representative of the U.S. stock market in
general; (ii) other groups of mutual funds tracked by: (A) Lipper Analytical
Services, a widely-used independent research firm which ranks mutual funds by
overall performance, investment objectives, and asset size; (B) Forbes
Magazine's Annual Mutual Funds Survey and Mutual Fund Honor Roll; or (C) other
financial or business publications, such as the Wall Street Journal, Business
Week, Money Magazine, and Barron's, which provide similar information; (iii)
indexes of stocks comparable to those in which the particular Portfolio invests;
(2) the Consumer Price Index; (3) other U.S. government statistics such as GNP,
and net import and export figures derived from governmental publications, e.g.,
The Survey of Current Business, may be used to illustrate investment attributes
of each Portfolio or the general economic, business, investment, or financial
environment in which each Portfolio operates; and (4) the effect of tax-deferred
compounding on the particular Portfolio's investment returns, or on returns in
general, may be illustrated by graphs, charts, etc. where such graphs or charts
would compare, at various points in time, the return from an investment in the
particular Portfolio (or returns in general) on a tax-deferred basis (assuming
reinvestment of capital gains and dividends and assuming one or more tax rates)
with the return on a taxable basis. Each Portfolio's performance may also be
compared to the performance of other mutual funds by Morningstar, Inc. which
ranks mutual funds on the basis of historical risk and total return.
Morningstar rankings are calculated using the mutual fund's performance relative
to three-month Treasury bill monthly returns. Morningstar's rankings range from
five stars (highest) to one star (lowest) and represent Morningstar's assessment
of the historical risk level and total return of a mutual fund as a weighted
average for 1, 3, 5, and 10-year periods. In each category, Morningstar limits
its five star rankings to 10% of the funds it follows

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and its four star rankings to 22.5% of the funds it follows. Rankings are not
absolute or necessarily predictive of future performance.

The performance of the Portfolios may be compared, for example, to the
record of the Salomon Investment Grade Bond Index, IDC/Donoghue, S&P 500 Index,
the Russell 2000-Registered Trademark-, the Russell 2500-TM-, the NASDAQ
Composite Index, the Morgan Stanley Capital International and the Europe,
Australia, Far Eastern (EAFE) Index. The S&P 500 Index is a well known measure
of the price performance of 500 leading larger domestic stocks which represent
approximately 80% of the market capitalization of the U.S. Equity market. The
Russell 2000-Registered Trademark- Small Stock Index is designed to be a
comprehensive representation of the U.S. small cap equity market. It is
composed of 2,000 issues of smaller domestic stocks which represent nearly 7% of
U.S. market capitalization. The Russell 2500-TM- Index is comprised of the
Russell 2000-Registered Trademark- small cap companies plus the next 500 largest
companies in the Russell 3000-Registered Trademark- universe. The NASDAQ
Composite Index is comprised of all stocks on NASDAQ's National Market Systems,
as well as other NASDAQ domestic equity securities. The NASDAQ Composite Index
has typically included smaller, less mature companies representing 10% to 15% of
the capitalization of the entire domestic equity market. The EAFE Index is
comprised of more than 900 companies in Europe, Australia and the Far East. All
of these indices are unmanaged and capitalization weighted. In general, the
securities comprising the Russell 2000-Registered Trademark-, the Russell 2500-
TM- and NASDAQ Composite Index are more growth oriented and have a somewhat
higher volatility than those in the S&P 500 Index.

The total returns of all of these indices will show the changes in prices
for the stocks in each index. All indices include the reinvestment of all
capital gains distributions and dividends paid by the stocks in each data base.
Tax consequences will not be included in such illustration, nor will brokerage
or other fees or expenses of investing be reflected in the NASDAQ Composite, S&P
500, EAFE Index, Russell 2000-Registered Trademark- and Russell 2500-TM-.

DELAWARE BUSINESS TRUST

The Trust is a business organization of the type commonly known as a
"Delaware Business Trust" of which each Portfolio is a series. The Trust has
filed a certificate of trust with the office of the Secretary of State of
Delaware. Except to the extent otherwise provided in the governing instrument
of the business trust, the beneficial owners shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware.

The Trust provides for the establishment of designated series of beneficial
interests (the Portfolios) having separate rights, powers or duties with respect
to specified property or obligations of the Trust or profits and losses
associated with specified property or obligations, and, to the extent provided
in the Declaration of Trust, any such series may have a separate business
purpose or investment objective.

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.

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FINANCIAL STATEMENTS

The audited financial statements contained in the Trust's December 31, 1995
Annual Report to Shareholders and the unaudited financial statements contained
in the Trust's June 30, 1996 Semi-Annual Report to Shareholders are incorporated
herein by reference.

ADDITIONAL INFORMATION

Annual and semi-annual reports containing financial statements of the
Trust, as well as voting instruction soliciting material for the Trust, will be
sent to all Trust shareholders.

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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 debts 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 debts in this category than for debts in
higher rated categories.

BB Debt rated BB is regarded as having less near-term vulnerability to
default than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to meet timely
interest and principal payments.

B Debt rated B is regarded as having a greater vulnerability to default but
presently as having the capacity to meet interest payments and principal
repayments. Adverse business, financial or economic conditions would
likely impair capacity or willingness to pay interest and repay
principal.

CCC Debt rated CCC is regarded as having a current identifiable vulnerability
to default, and is dependent upon favorable business, financial and
economic conditions to meet timely payments of principal. In the event
of adverse business, financial or economic conditions, it is not likely
to have the capacity to pay interest and repay principal.

CC The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.

C The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.

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D Bonds rated D are in default, and payment of interest and/or repayment of
principal is in arrears.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
ratings categories.

Commercial Paper

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

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.

MOODY'S

Corporate and Municipal Bonds

Aaa Bonds which are rated Aaa are judged to be 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.

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

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be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Ca Bonds which are rated Ca present obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
categories below B. The modifier 1 indicates a ranking for the security in the
higher end of a rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a rating category.

Commercial Paper

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.

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