JPM Series Trust II Supplement dated September 15, 1997, as applicable to
the following Prospectuses: JPM Series Trust II (combined), dated 4/30/97
JPM Bond Portfolio, dated 4/30/97
Investment Policy Revisions:
1. The first paragraph of the sub-section entitled "Quality information"
under "Investment Objective and Policies" is replaced with the following:
Quality Information. It is the current policy of the Portfolio that under
normal circumstances at least 75% of total assets will consist of securities
that at the time of purchase are rated Baa or better by Moody's Investors
Service, Inc. ("Moody's) or BBB or better by Standard & Poor's Ratings Group
("Standard & Poor's"), of which at least 65% of total assets will be rated A or
better. The remaining 25% of total assets may be invested in securities that are
rated B or better by Moody's or Standard & Poor's. In each case, the Portfolio
may invest in securities which are unrated if in the Adviser's opinion such
securities 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 or BB or B by Standard &
Poor's are below investment grade and considered to be speculative with regard
to payment of interest and principal. These standards must be satisfied at the
time an investment is made. If the quality of the investment later declines, the
Portfolio may continue to hold the investment. See "ADDITIONAL INVESTMENT
INFORMATION".
2. The following sub-section is added after the first paragraph under
"Additional Investment Information" in the Prospectus:
Below Investment Grade Debt. Certain lower rated securities purchased by
the Portfolio, such as those rated Ba or B by Moody's or BB or B by Standard &
Poor's (commonly known as junk bonds), may be subject to certain risks with
respect to the issuing entity's ability to make scheduled payments of principal
and interest and to greater market fluctuations. While generally providing
higher coupons or interest rates than investments in higher quality securities,
lower quality fixed income securities involve greater risk of loss of principal
and income, including the possibility of default or bankruptcy of the issuers of
such securities, and have greater price volatility, especially during periods of
economic uncertainty or change. These lower quality fixed income securities tend
to be affected by economic changes and short-term corporate and industry
developments to a greater extent than higher quality securities, which react
primarily to fluctuations in the general level of interest rates. To the extent
that the Portfolio invests in such lower quality securities, the achievement of
its investment objective may be more dependent on the Adviser's own credit
analysis.
Lower quality fixed income securities are affected by the market's
perception of their credit quality, especially during times of adverse
publicity, and the outlook for economic growth. Economic downturns or an
increase in interest rates may cause a higher incidence of default by the
issuers of these securities, especially issuers that are highly leveraged. The
market for these lower quality fixed income securities is generally less liquid
than the market for investment grade fixed income securities. It may be more
difficult to sell these lower rated securities to meet redemption requests, to
respond to changes in the market, or to value accurately the Portfolio's
portfolio securities for purposes of determining the Portfolio's net asset
value. See Appendix A in the Statement of Additional Information for more
detailed information on these ratings.
