J.P. Morgan Series Trust II (formerly JPM Series Trust II)
Supplement dated January 7, 1998, as applicable to the following Prospectuses:
JPM Series Trust II (combined), dated 4/30/97
JPM Treasury Money Market Portfolio, dated 4/30/97
JPM Bond Portfolio, dated 4/30/97
JPM Equity Portfolio, dated 4/30/97
JPM Small Company Portfolio, dated 4/30/97
JPM International Equity Portfolio, dated 4/30/97
(Supersedes all supplements with respect to the above Trust/Portfolios prior to
January 7, 1998)
Trust/Portfolio Name Changes:
1. Effective January 1, 1998, the name of the Trust changed from "JPM Series
Trust II" to "J.P. Morgan Series Trust II" and each Portfolio's name changed as
follows:
Old Name New Name
JPM Treasury Money Market Portfolio J.P. Morgan Treasury Money Market Portfolio
JPM Bond Portfolio J.P. Morgan Bond Portfolio
JPM Equity Portfolio J.P. Morgan Equity Portfolio
JPM Small Company Portfolio J.P. Morgan Small Company Portfolio
JPM International Equity Portfolio J.P. Morgan International Opportunities
Portfolio
Investment Policy Revisions:
2. The first paragraph of the sub-section entitled "Quality information" under
"Investment Objective and Policies" in the Prospectuses for the J.P. Morgan Bond
Portfolio 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".
3. The following sub-section is added after the first paragraph under
"Additional Investment Information" in the combined Prospectus:
Below Investment Grade Debt for J.P. Morgan Bond Portfolio. 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
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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.
4. The Section "Additional Investment Information" in the individual
Prospectus for the J.P. Morgan Bond Portfolio is revised accordingly.
