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PROSPECTUS
The JPM Advisor Asia Growth Fund
6 St. James AvenueBoston, Massachusetts 02116
For information call (800) JPM-3637
The JPM Advisor Asia Growth Fund (the "Fund") seeks to provide a high total
return from a portfolio of equity securities of companies in Asian growth
markets. It is designed for long-term investors who want access to the rapidly
growing Asian markets.
The Fund is a diversified no-load mutual fund for which there are no sales
charges or exchange or redemption fees. The Fund is a series of The JPM Advisor
Funds, an open-end management investment company organized as a Massachusetts
business trust (the "Trust").
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO
OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING
ALL OF ITS INVESTABLE ASSETS IN THE ASIA GROWTH PORTFOLIO (THE "PORTFOLIO"), A
CORRESPONDING DIVERSIFIED OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING THE
SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND INVESTS IN THE PORTFOLIO
THROUGH SIGNATURE FINANCIAL GROUP, INC.'S HUB AND SPOKE(R) FINANCIAL SERVICES
METHOD. HUB AND SPOKE(R) EMPLOYS A TWO-TIER MASTER-FEEDER STRUCTURE AND IS A
REGISTERED SERVICE MARK OF SIGNATURE FINANCIAL GROUP, INC. SEE SPECIAL INFORMA-
TION CONCERNING HUB AND SPOKE(R) ON PAGE 2.
The Portfolio is advised by Morgan Guaranty Trust Company of New York ("Morgan"
or the "Advisor").
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing and it should be retained
for future reference. Additional information about the Fund has been filed with
the Securities and Exchange Commission in a Statement of Additional Information
dated March 31, 1995 (as supplemented from time to time). This information is
incorporated herein by reference and is available without charge upon written
request from the Fund's Distributor, Signature Broker-Dealer Services, Inc., 6
St. James Avenue, Boston, Massachusetts 02116, Attention: The JPM Advisor
Funds, or by calling (800) 847-9487.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK OR ANY OTHER BANK.
SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. AN
INVESTMENT IN THE FUND IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE IN-
VESTMENT 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 AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 28, 1995.
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TABLE OF CONTENTS
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Investors for Whom the Fund Is Designed.................................... 1
Special Information Concerning Hub and Spoke(R)............................ 2
Investment Objective and Policies.......................................... 3
Risk Factors and Additional Investment Information......................... 5
Investment Restrictions.................................................... 10
Management of the Trust and the Portfolio.................................. 10
Shareholder Transactions................................................... 13
Purchase of Shares......................................................... 13
Redemption of Shares....................................................... 14
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Exchange of Shares......................................................... 14
Dividends and Distributions................................................ 15
Net Asset Value............................................................ 15
Organization............................................................... 15
Taxes...................................................................... 16
Additional Information..................................................... 17
Appendix................................................................... A-1
Options.................................................................... A-1
Futures Contracts.......................................................... A-2
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The JPM Advisor Asia Growth Fund
INVESTORS FOR WHOM THE FUND IS DESIGNED
The Fund is designed for long-term investors who want access to the rapidly
growing Asian markets. The Fund seeks to achieve its investment objective by
investing all of its investable assets in The Asia Growth Portfolio, a diver-
sified open-end management investment company having the same investment ob-
jective as the Fund. Since the investment characteristics and experience of
the Fund will correspond directly with those of the Portfolio, the discussion
in this Prospectus focuses on the investments and investment policies of the
Portfolio. The net asset value of shares in the Fund fluctuates with changes
in the value of the investments in the Portfolio.
The Portfolio may make various types of investments in seeking its objective.
Among the permissible investments and investment techniques for the Portfolio
are futures contracts, options and forward contracts on foreign currencies.
The potential risks of investing in these derivative instruments are discussed
in Risk Factors and Additional Investment Information and the Appendix. The
Portfolio may also purchase certain privately placed securities. The Portfo-
lio's investments in securities of issuers in Asian growth markets involve
foreign investment risks and may be more volatile and less liquid than domes-
tic securities. For further information about these investments, see Invest-
ment Objective and Policies below.
The Fund requires a minimum initial investment of $5,000. See Purchase of
Shares.
This Prospectus describes the investment objective and policies, management
and operation of the Fund to enable investors to decide if the Fund suits
their needs. The Fund operates through Signature Financial Group, Inc.'s
("Signature") Hub and Spoke(R) financial services method. The Trustees of the
Trust believe that the Fund may achieve economies of scale over time by in-
vesting through Hub and Spoke(R).
The following table illustrates that investors in the Fund incur no share-
holder transaction expenses; their investment in the Fund is subject only to
the operating expenses set forth below for the Fund and the Portfolio, as a
percentage of average net assets of the Fund. The Trustees of the Trust be-
lieve that the aggregate per share expenses of the Fund and the Portfolio will
be approximately equal to and may be less than the expenses that the Fund
would incur if it retained the services of an investment adviser and invested
its assets directly in portfolio securities. Fund and Portfolio expenses are
discussed below under the headings Management of the Trust and the Portfolio--
Expenses.
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SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases............................................ None
Sales Load Imposed on Reinvested Dividends................................. None
Deferred Sales Load........................................................ None
Redemption Fees............................................................ None
Exchange Fees.............................................................. None
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EXPENSE TABLE
ANNUAL OPERATING EXPENSES*
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Advisory Fees............................................................. 0.80%
Rule 12b-1 Fees........................................................... None
Other Expenses (after expense reimbursement).............................. 1.05%
----
Total Operating Expenses (after expense reimbursement).................... 1.85%
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* These expenses are based on estimated expenses of the Fund and the Portfolio
and estimated average net assets for the Fund's first fiscal year, after any
applicable expense reimbursement. Without such expected reimbursement, the
estimated Total Operating Expenses would be equal on an annual basis to 2.01%
of the estimated average net assets of the Fund. See Management of the Trust
and the Portfolio--Expenses.
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:
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1 Year..................................................................... $ 19
3 Years.................................................................... $ 58
5 Years.................................................................... $100
10 Years................................................................... $217
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The above expense table is designed to assist investors in understanding the
various direct and indirect costs and expenses that investors in the Fund bear.
The fees and expenses included in Other Expenses are the fees paid to Morgan
under the Financial and Fund Accounting Services and Services Agreements, and
fees paid to State Street Bank and Trust Company as custodian of the Portfolio.
For a more detailed description of contractual fee arrangements, including ex-
pense reimbursements, and of the fees and expenses included in Other Expenses,
see Management of the Trust and the Portfolio. In connection with the above ex-
ample, please note that $1,000 is less than the Fund's minimum investment re-
quirement and that there are no redemption or exchange fees of any kind. See
Purchase of Shares and Redemption of Shares. THE EXAMPLE IS HYPOTHETICAL; IT IS
INCLUDED SOLELY FOR ILLUSTRATIVE PURPOSES. IT SHOULD NOT BE CONSIDERED A REPRE-
SENTATION OF FUTURE PERFORMANCE; ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN.
The Fund's annual report will include a discussion of those factors, strategies
and techniques that materially affected its performance during the period of
the report, as well as certain related information. A copy of the Fund's annual
report will be made available without charge upon request.
SPECIAL INFORMATION CONCERNING HUB AND SPOKE(R).
The Trust and the Portfolio use certain proprietary rights, know-how and finan-
cial services referred to as Hub and Spoke(R). Hub and Spoke(R) is a registered
service mark of Signature. Signature Broker-Dealer Services, Inc. (the Trust's
and Portfolio's Administrator and the Trust's Distributor) is a wholly-owned
subsidiary of Signature.
Unlike other mutual funds which directly acquire and manage their own portfolio
of securities, the Fund is an open-end management investment company which
seeks to achieve its investment objective by investing all of its investable
assets in the Portfolio, a separate registered investment company with the same
investment objective as the Fund. The investment objective of the Fund or Port-
folio may be changed only with the approval of the holders of the outstanding
shares of the Fund and the Portfolio. The use of Hub and Spoke(R) has been ap-
proved by the shareholders of the Fund.
In addition to selling a beneficial interest to the Fund, the Portfolio may
sell beneficial interests to other mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions
and will pay a proportionate share of the Portfolio's expenses. However, the
other investors investing in the Portfolio may sell shares of their
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own fund using a different pricing structure than the Fund. Such different
pricing structures may result in differences in returns experienced by invest-
ors in other funds that invest in the Portfolio. Such differences in returns
are not uncommon and are present in other mutual fund structures. Information
concerning other holders of interests in the Portfolio is available from the
Administrator at (800) 847-9487.
The Trust may withdraw the investment of the Fund from the Portfolio at any
time if the Board of Trustees of the Trust determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Board of Trustees
would consider what action might be taken, including the investment of all the
assets of the Fund in another pooled investment entity having the same invest-
ment objective and restrictions as the Fund or the retaining of an investment
adviser to manage the Fund's assets in accordance with the investment policies
described below with respect to the Portfolio.
Certain changes in the Portfolio's investment objective, policies or restric-
tions, or a failure by the Fund's shareholders to approve a change in the Port-
folio's investment objective or restrictions, may require withdrawal of the
Fund's interest in the Portfolio. Any such withdrawal could result in a distri-
bution in kind of portfolio securities (as opposed to a cash distribution) from
the Portfolio which may or may not be readily marketable. The distribution in
kind may result in the Fund having a less diversified portfolio of investments
or adversely affect the Fund's liquidity, and the Fund could incur brokerage,
tax or other charges in converting the securities to cash. Notwithstanding the
above, there are other means for meeting shareholder redemption requests, such
as borrowing.
Smaller funds investing in the Portfolio may be materially affected by the ac-
tions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns. Addition-
ally, because the Portfolio would become smaller, it may become less diversi-
fied, resulting in potentially increased portfolio risk (however, these possi-
bilities also exist for traditionally structured funds which have large or in-
stitutional investors who may withdraw from a fund). Also, funds with a greater
pro rata ownership in the Portfolio could have effective voting control of the
operations of the Portfolio. Whenever the Fund is requested to vote on matters
pertaining to the Portfolio (other than a vote by the Fund to continue the op-
eration of the Portfolio upon the withdrawal of another investor in the Portfo-
lio), the Trust will hold a meeting of shareholders of the Fund and will cast
all of its votes proportionately as instructed by the Fund's shareholders. The
Trust will vote the shares held by Fund shareholders who do not give voting in-
structions in the same proportion as the shares of Fund shareholders who do
give voting instructions. Shareholders of the Fund who do not vote will have no
effect on the outcome of such matters.
For more information about the Portfolio's investment objective, policies and
restrictions, see Investment Objective and Policies, Risk Factors and Addi-
tional Investment Information and Investment Restrictions. For more information
about the Portfolio's management and expenses, see Management of the Trust and
the Portfolio. For more information about changing the investment objective,
policies and restrictions of the Fund or the Portfolio, see Investment Restric-
tions.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund and the Portfolio is described below, to-
gether with the policies they employ in their efforts to achieve this objec-
tive. Additional information about the investment policies of the Fund and the
Portfolio appears in the Statement of Additional Information under Investment
Objectives and Policies. There can be no assurance that the investment objec-
tive of the Fund or the Portfolio will be achieved.
The Fund's investment objective is to achieve a high total return from a port-
folio of equity securities of companies in Asian growth markets. Total return
will consist of realized and unrealized capital gains and losses plus income.
The Fund attempts to achieve its investment objective by investing all its
investable assets in The Asia Growth Portfolio, a diversified open-end manage-
ment investment company having the same investment objective as the Fund. Under
certain market conditions, the Fund or the Portfolio may not be able to achieve
its investment objective.
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The Fund is designed for long-term investors who want access to the rapidly
growing Asian markets. THE FUND DOES NOT REPRESENT A COMPLETE INVESTMENT PRO-
GRAM NOR IS THE FUND SUITABLE FOR ALL INVESTORS. MANY INVESTMENTS IN ASIAN
GROWTH MARKETS CAN BE CONSIDERED SPECULATIVE AND, THEREFORE, MAY OFFER HIGHER
POTENTIAL FOR GAINS AND LOSSES AND MAY BE MORE VOLATILE THAN INVESTMENTS IN THE
DEVELOPED MARKETS OF THE WORLD. See Risk Factors and Additional Investment In-
formation.
The Advisor considers "Asian growth markets" to be Bangladesh, China, India,
Indonesia, Korea, Malaysia, Pakistan, the Philippines, Sri Lanka, Thailand,
Taiwan, Hong Kong, and Singapore.
A company in an Asian growth market is one that: (i) has its principal securi-
ties trading market in an Asian growth market; or (ii) is organized under the
laws of an Asian growth market; or (iii) derives 50% or more of its total reve-
nue and/or profits from either goods produced, sales made or services performed
in Asian growth markets; or (iv) has at least 50% of its assets located in
Asian growth markets.
The Portfolio seeks to achieve its objective through country allocation and
company selection. Morgan uses a disciplined portfolio construction process to
seek to enhance returns and reduce volatility in the market value of the Port-
folio relative to its benchmark. The Portfolio's benchmark is a customized in-
dex comprised of Morgan Stanley Capital International's indices for Hong Kong
and Singapore and the International Finance Corporation's Investable indices
for China, Indonesia, Malaysia, Philippines, South Korea, Taiwan and Thailand.
Based on fundamental research, quantitative valuation techniques and experi-
enced judgment, Morgan identifies those countries where economic and political
factors, including currency movements, are likely to produce above-average re-
turns. Drawing on this analysis, Morgan allocates the Portfolio among Asian
growth markets by overweighting or underweighting selected countries against
the benchmark. Currently, three Asian growth markets--Hong Kong, Malaysia and
Thailand--represent more than 60% of the market value of the benchmark and of
the Portfolio.
To select investments for the Portfolio, the Advisor ranks companies in each
Asian growth market within industrial sectors according to their relative val-
ue. These valuations are based on the Advisor's fundamental research and use of
quantitative tools to project a company's long-term prospects for earnings
growth and its dividend paying capability. Based on this valuation, Morgan then
selects the companies which appear most attractive for the Portfolio. Typical-
ly, the Portfolio's industrial sector weightings will be similar to those of
its benchmark.
The Portfolio intends to manage its portfolio actively in pursuit of its in-
vestment objective. The Portfolio does not intend to respond to short-term mar-
ket fluctuations or to acquire securities for the purpose of short-term trad-
ing; 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 realize short-term capital gains or losses and incur
increased transaction costs. See Taxes below. The estimated annual portfolio
turnover rate for the Portfolio is generally not expected to exceed 100%.
The Portfolio's investments are primarily in securities denominated in foreign
currencies, but it may also invest in securities denominated in the U.S. dollar
or multinational currency units such as the ECU. The Advisor will not routinely
attempt to hedge the Portfolio's foreign currency exposure. However, the Advi-
sor may from time to time engage in foreign currency exchange transactions if,
based on fundamental research, technical factors, and the judgment of experi-
enced currency managers, it believes the transactions would be in the Portfo-
lio's best interest. For further information on foreign currency exchange
transactions, see Risk Factors and Additional Investment Information.
EQUITY INVESTMENTS. In normal circumstances, the Advisor intends to keep the
Portfolio essentially fully invested with at least 65% of the value of its to-
tal assets in equity securities of companies in Asian growth markets consisting
of common stocks and other securities with equity characteristics comprised of
preferred stock, warrants, rights, convertible secu-
4
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rities, trust certificates, limited partnership interests and equity partici-
pations. The Portfolio's primary equity investments are the common stock of
companies the Advisor has identified as attractive in the Asian growth mar-
kets. Such investments will be made in at least three different countries con-
sidered to be Asian growth markets. The common stock in which the Portfolio
may invest includes the common stock of any class or series or any similar eq-
uity 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 foreign or domestic se-
curities exchanges and securities traded in foreign or domestic over-the-
counter markets, and may invest in certain restricted or unlisted securities.
Certain Asian growth markets are closed in whole or in part to equity invest-
ments by foreigners except through specifically authorized investment funds.
Securities of other investment companies may be acquired by the Portfolio to
the extent permitted under the Investment Company Act of 1940 (the "1940
Act")--that is, the Portfolio may invest up to 10% of its total assets in se-
curities of other investment companies so long as not more than 3% of the out-
standing voting stock of any one investment company is held by the Portfolio.
In addition, not more than 5% of the Portfolio's total assets may be invested
in the securities of any one investment company. As a shareholder in an in-
vestment fund, the Portfolio would bear its share of that investment fund's
expenses, including its advisory and administration fees. At the same time the
Portfolio and the Fund would continue to pay their own operating expenses.
The Portfolio may also invest in money market instruments denominated in U.S.
dollars and other currencies, purchase 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 en-
ter into forward foreign currency exchange contracts. In addition, the Portfo-
lio may use options on securities and indexes of securities, futures contracts
and options on futures contracts for hedging and risk management purposes.
Forward foreign currency exchange contracts, options and futures contracts are
derivative instruments. For a discussion of these investments and investment
techniques, see Risk Factors and Additional Investment Information.
RISK FACTORS AND ADDITIONAL INVESTMENT INFORMATION
INVESTING IN ASIAN GROWTH MARKETS. The Portfolio invests primarily in equity
securities of companies in Asian growth markets. Investments in securities of
issuers in Asian growth markets may involve a high degree of risk and many may
be considered speculative. These investments carry all of the risks of invest-
ing in securities of foreign issuers described below to a heightened degree.
These heightened risks include (i) greater risks of expropriation, confisca-
tory taxation, nationalization, and less social, political and economic sta-
bility; (ii) the small current size of the markets for securities of emerging
markets issuers and the currently low or nonexistent volume of trading, re-
sulting 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 rele-
vant national interests; and (iv) the absence of developed legal structures
governing private or foreign investment and private property.
As an example of specific concerns attendant to investing in Asian growth mar-
kets, the People's Republic of China (the "PRC") has only recently permitted
private economic activities and the PRC government has exercised and continues
to exercise substantial control over virtually every sector of the PRC economy
through regulation and state ownership. The PRC is a socialist state which
since 1949 has been, and is expected to continue to be, controlled by the Chi-
nese Communist Party of the PRC. Continued economic growth and development in
the PRC, as well as opportunities for foreign investment and prospects of pri-
vate sector enterprises in the PRC, will depend in many respects on the imple-
mentation of the PRC's current program of economic reform, which cannot be as-
sured. Other examples include: Indonesia's, Malaysia's, Thailand's and
Taiwan's limitations on foreign ownership of shares of any listed company,
India's settlement delays, where settlement is through physical delivery, and
Thailand's border disputes with Laos and Cambodia. For additional information,
see Appendix B--Investing in Japan and Asian Growth Markets in the Statement
of Additional Information.
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In Hong Kong, British proposals to extend limited democracy have caused a po-
litical rift with the PRC, which is scheduled to assume sovereignty over the
colony in 1997. Although the PRC has committed by treaty to preserve the eco-
nomic and social freedoms enjoyed in Hong Kong for 50 years after regaining
control of Hong Kong, the continuation of the current form of economic system
in Hong Kong after the reversion will depend on the actions of the government
of the PRC. In addition, such reversion has increased sensitivity in Hong Kong
to political developments and statements by public figures in the PRC. Busi-
ness confidence in Hong Kong, therefore, can be significantly affected by such
developments and statements, which in turn can affect markets and business
performance.
OTHER FOREIGN INVESTMENT INFORMATION. Generally, investment in securities of
foreign issuers involves somewhat different investment risks from those af-
fecting 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. Divi-
dends 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 compa-
nies.
Investors should realize that the value of the Portfolio's investments in for-
eign securities may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation, na-
tionalization, 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 United States or abroad could result in appreciation or depre-
ciation of portfolio securities and could favorably or unfavorably affect the
Portfolio's operations. Furthermore, the economies of individual foreign na-
tions may differ from the U.S. economy, whether favorably or unfavorably, in
areas such as growth of gross national product, rate of inflation, capital re-
investment, resource self-sufficiency and balance of payments position; it may
also be more difficult to obtain and enforce a judgment against a foreign is-
suer. Any foreign investments made by the Portfolio must be made in compliance
with 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 ex-
changes has increased in recent years, in most cases it remains appreciably
below that of domestic security exchanges. Accordingly, the Portfolio's for-
eign investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. Moreover, the settle-
ment periods for foreign securities, which are often longer than those for se-
curities of U.S. issuers, may affect portfolio liquidity. In buying and sell-
ing securities on foreign exchanges, purchasers normally pay fixed commissions
that are generally higher than the negotiated commissions charged in the
United States. In addition, there is generally less government supervision and
regulation of securities exchanges, brokers and issuers located in foreign
countries than in the United States.
The Portfolio may invest in securities of foreign issuers directly or in the
form of American Depositary Receipts ("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 insti-
tutions issuing ADRs may not be sponsored by the issuer of the underlying for-
eign securities. A non-sponsored depository may not provide the same share-
holder information that a sponsored depository is required to provide under
its contractual arrangements with the issuer of the underlying foreign securi-
ties. 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 the Portfolio's investments in foreign securities involve foreign cur-
rencies, the value of its 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 Trans-
actions.
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FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the Portfolio buys and sells
securities and receives interest and dividends in currencies other than the
U.S. dollar, the Portfolio may enter from time to time 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 curren-
cies. The cost of the Portfolio's spot currency exchange transactions is gen-
erally the difference between the bid and offer spot rate of the currency be-
ing 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 con-
tracts are derivative instruments, as their value derives from the spot ex-
change rates of the currencies underlying the contract. These contracts are
entered into in the interbank market directly between currency traders (usu-
ally 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. The Portfolio will not enter into forward contracts
for speculative purposes. Neither spot transactions nor forward foreign cur-
rency exchange contracts eliminate fluctuations in the prices of the Portfo-
lio's securities or in foreign exchange rates, or prevent loss if the prices
of these securities should decline.
The Portfolio may enter into foreign currency exchange transactions in an at-
tempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or antici-
pated securities transactions. The Portfolio may also enter into forward con-
tracts to hedge against a change in foreign currency exchange rates that would
cause a decline in the value of existing investments denominated or princi-
pally traded in a foreign currency. To do this, the Portfolio would enter into
a forward contract to sell the foreign currency in which the investment is de-
nominated or principally traded in exchange for U.S. dollars or in exchange
for another foreign currency. The Portfolio will only enter into forward con-
tracts to sell a foreign currency in exchange for another foreign currency if
the Advisor expects the foreign currency purchased to appreciate against the
U.S. dollar.
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 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 fluc-
tuations in the value of the currency purchased against 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 projec-
tion of currency market movements is extremely difficult, and the successful
execution of a hedging strategy is highly uncertain.
CONVERTIBLE SECURITIES. 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. Convert-
ible 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.
WARRANTS. The Portfolio invests in warrants, which entitle the holder to buy
common stock from the issuer at a specific price (the strike price) for a spe-
cific period of time. The strike price of warrants sometimes is much lower
than the current market price of the underlying securities, yet warrants are
subject to similar price fluctuations. As a result, warrants may be more vola-
tile investments than the underlying securities.
Warrants do not entitle the holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets of
the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to the expiration date.
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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 for money market instruments no 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 a separate account with a segregated portfolio of
securities in an amount at least equal to these commitments. 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 trans-
actions with brokers, dealers or banks that meet the credit guidelines estab-
lished by the Portfolio's Trustees. 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 re-
spect to the seller, the Portfolio's realization upon the disposition of col-
lateral may be delayed or limited. Investments in certain repurchase agree-
ments and certain other investments which may be considered illiquid are lim-
ited. See Illiquid Investments; Privately Placed and other Unregistered Secu-
rities below.
LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities in an amount up to 33 1/3%
of the value of the Portfolio's net assets. The Portfolio may lend its securi-
ties 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 in-
come accruing thereon. Loans will be subject to termination by the Portfolio
in the normal settlement time, generally three 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 the Portfolio
and its respective investors. The Portfolio may pay reasonable finders' and
custodial fees in connection with a loan. In addition, the Portfolio will con-
sider all facts and circumstances, including the creditworthiness of the bor-
rowing financial institution, and the Portfolio will not make any loans in ex-
cess of one year. The Portfolio will not lend its securities to any officer,
Trustee, Director, employee or other affiliate of the Portfolio, the Advisor
or the Distributor, unless otherwise permitted by applicable law.
REVERSE REPURCHASE AGREEMENTS. The Portfolio is permitted to enter into re-
verse 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 agree-
ment. For the purposes of the 1940 Act, it is considered as a form of borrow-
ing by the Portfolio and, therefore, a form of leverage. Leverage may cause
any gains or losses of the Portfolio to be magnified. For more information,
see Investment Objectives and Policies in the Statement of Additional Informa-
tion.
ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES. The
Portfolio may not 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
illiquid investments. Subject to this non-fundamental policy limitation, the
Portfolio may acquire investments that are illiquid or have limited liquidity,
such as private placements or investments that are not registered under the
Securities Act of 1933 (the "1933 Act"). An illiquid investment is any invest-
ment that cannot be disposed of within seven days in the normal
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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.
The Portfolio may also purchase Rule 144A securities sold to institutional in-
vestors without registration under the 1933 Act. These securities may be deter-
mined to be liquid in accordance with guidelines established by the Advisor and
approved by the Trustees of the Portfolio. The Trustees will monitor the Advi-
sor's implementation of these guidelines on a periodic basis.
FUTURES AND OPTIONS TRANSACTIONS. The Portfolio may (a) purchase and sell
(write) exchange traded and over-the-counter put and call options on equity se-
curities or indexes of equity securities, (b) purchase and sell futures con-
tracts on indexes of equity securities, and (c) purchase and sell (write) put
and call options on futures contracts on indexes of equity securities. Each of
these instruments is a derivative instrument, as its value derives from the un-
derlying asset or index.
The Portfolio may use futures contracts and options for hedging and risk man-
agement purposes. The Portfolio may not use futures contracts 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, in-
cluding 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 re-
turn characteristics of the Portfolio's overall strategy in a manner deemed ap-
propriate to the Advisor and consistent with the Portfolio's objective and pol-
icies. 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 securi-
ties, these techniques themselves entail certain other risks. If the Advisor
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 limiting its exposure to losses. The Portfolio could also experience
losses if the prices of its options and futures positions were poorly corre-
lated with its other investments or if it could not close out its positions be-
cause of an illiquid secondary market. In addition, the Portfolio will incur
transaction costs, including trading commissions and option premiums, in con-
nection with its futures and options transactions and these transactions could
significantly increase the Portfolio's turnover rate.
The Portfolio may purchase put and call options on securities, indexes of secu-
rities and futures contracts, or purchase and sell futures contracts, only if
such options are written by other persons and if (i) the aggregate premiums
paid on all such options which are held at any time do not exceed 20% of the
Portfolio's net assets, and (ii) the aggregate margin deposits required on all
such futures or options thereon held at any time do not exceed 5% of the Port-
folio's total assets. In addition, 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 net as-
set value of the Portfolio. For more detailed information about these transac-
tions, see the Appendix to this Prospectus and Investment Objectives and Poli-
cies--Risk Management 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 equity securities to the
extent practical in light of its objective. The Portfolio may invest in money
9
<PAGE>
market instruments of foreign or domestic issuers denominated in U.S. dollars
and other currencies. Under normal circumstances the Portfolio will purchase
these securities to invest temporary cash balances or to maintain liquidity to
meet redemptions. However, the Portfolio may also invest in money market in-
struments without limitation as a temporary defensive measure taken in the Ad-
visor's judgment during, or in anticipation of, adverse market conditions. For
more detailed information about these money market investments, see Investment
Objectives and Policies in the Statement of Additional Information.
INVESTMENT RESTRICTIONS
As a diversified investment company, 75% of the assets of the Portfolio are
subject to the following fundamental limitations: (a) the Portfolio may not in-
vest more than 5% of its total assets in the securities of any one issuer, ex-
cept U.S. government securities, and (b) the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer.
The investment objective of the Fund and the Portfolio, together with the in-
vestment restrictions described below and in the Statement of Additional Infor-
mation, except as noted, are deemed fundamental policies, i.e., they may be
changed only with the approval of the holders of a majority of the outstanding
voting securities of the Fund and the Portfolio. The Fund has the same invest-
ment restrictions as the Portfolio, except that the Fund may invest all of its
investable assets in another open-end investment company with the same invest-
ment objective and restrictions (such as the Portfolio). References below to
the Portfolio's investment restrictions also include the Fund's investment re-
strictions.
The Portfolio may not purchase securities or other obligations of issuers con-
ducting their principal business activity in the same industry if its invest-
ments in such industry would exceed 25% of the value of the Portfolio's total
assets, except this limitation shall not apply to investments in U.S. Govern-
ment securities. In addition, the Portfolio may not borrow money except that
the Portfolio may (a) borrow money from banks for temporary or emergency pur-
poses (not for leveraging purposes) and (b) enter into reverse repurchase
agreements for any purpose, provided that (a) and (b) in total do not exceed
one-third of the Portfolio's total assets less liabilities (other than
borrowings); and the Portfolio may not issue senior securities except as per-
mitted by the 1940 Act or any rule, order or interpretation thereunder. See
Risk Factors and Additional Investment Information--Loans of Portfolio Securi-
ties and Reverse Repurchase Agreements.
For a more detailed discussion of the above investment restrictions, as well as
a description of certain other investment restrictions, see Investment Restric-
tions in the Statement of Additional Information.
MANAGEMENT OF THE TRUST AND THE PORTFOLIO
TRUSTEES. 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
Trust's Administrator, Distributor, Services Agent, and other service providers
and the performance of the Portfolio's Advisor. Pursuant to the Declaration of
Trust for the Portfolio, the Trustees of the Portfolio (who are not the same as
the Trustees of the Trust) have the same responsibilities for the Portfolio in-
cluding overseeing its service providers.
The Portfolio has entered into a Fund Services Agreement with Pierpont Group,
Inc. to assist the Trustees of the Portfolio in exercising their overall super-
visory responsibilities for the Portfolio's affairs. The fee to be paid by the
Portfolio under the agreement approximates the reasonable cost of Pierpont
Group, Inc. in providing these services. Pierpont Group, Inc. was organized in
1989 at the request of the Trustees of The Pierpont Family of Funds for the
purpose of providing these services at cost to these funds. The principal of-
fices of Pierpont Group, Inc. are located at 461 Fifth Avenue, New York, New
York 10017. For more information concerning the Trust's and the Portfolio's
Trustees and officers, see Trustees and Officers in the Statement of Additional
Information.
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<PAGE>
ADVISOR. The Fund has not retained the services of an investment adviser be-
cause the Fund seeks to achieve its investment objective by investing all of
its investable assets in the Portfolio. The Portfolio has retained the serv-
ices of Morgan as Investment Advisor. Morgan, with principal offices at 60
Wall Street, New York, New York 10260, is a New York trust company which con-
ducts a general banking and trust business. Morgan is a wholly-owned subsidi-
ary 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 the Advisor and other subsidiaries, offers a wide
range of services to governmental, institutional, corporate and individual
customers and acts as investment adviser to individual and institutional cli-
ents with combined assets under management of over $165 billion (of which the
Advisor advises over $26 billion). Morgan provides investment advice and port-
folio management services to the Portfolio. Subject to the supervision of the
Portfolio's Trustees, Morgan makes the Portfolio's day-to-day investment deci-
sions, arranges for the execution of portfolio transactions and generally man-
ages the Portfolio's investments. See Investment Advisor in the Statement of
Additional Information.
Morgan uses a sophisticated, disciplined, collaborative process for managing
all asset classes. For equity portfolios, this process utilizes fundamental
research, systematic stock selection, disciplined portfolio construction and,
in the case of foreign equities, country exposure and currency management.
Morgan has managed portfolios of equity securities of companies in emerging
markets, including Asian growth markets, since 1990. The portfolio managers
making investments in Asian growth markets work in conjunction with Morgan's
equity analysts focused on Asian growth markets, as well as capital market,
credit and economic research analysts, traders and administrative officers.
The Asian equity analysts, located in Singapore, each cover a different indus-
try, monitoring a universe of approximately 250 companies in the region.
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 his business experience
for the past five years is indicated parenthetically): Steven T. Ho, Vice
President (since March, 1995, employed by Morgan since prior to 1990 as a
portfolio manager of Asian investments and as an investment research analyst
prior to 1993) and Douglas J. Dooley, Managing Director (since March, 1995,
employed by Morgan since prior to 1990 and has been a portfolio manager of
emerging markets investments since 1990).
As compensation for the services rendered and related expenses borne by Morgan
under the Investment Advisory Agreement with the Portfolio, the Portfolio has
agreed to pay Morgan a fee, which is computed daily and may be paid monthly,
at the annual rate of 0.80% of the Portfolio's average daily net assets. While
the advisory fee for the Portfolio is higher than that of most investment com-
panies, it is similar to the advisory fees of other funds of this type.
Morgan also acts as Services Agent to the Trust and the Portfolio and provides
shareholder services to shareholders of the Fund. See Services Agent below.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK OR ANY OTHER BANK.
ADMINISTRATOR AND DISTRIBUTOR. Under Administration Agreements with the Trust
and the Portfolio, Signature Broker-Dealer Services, Inc. ("SBDS") serves as
the Administrator for the Trust and the Portfolio and in that capacity super-
vises the Fund's and the Portfolio's day-to-day operations other than manage-
ment of the Portfolio's investments. In this capacity, SBDS administers and
manages all aspects of the Fund's and the Portfolio's day-to-day operations
subject to the supervision of the Trustees, except as set forth under Advisor,
Services Agent and Custodian. In connection with its responsibilities as Ad-
ministrator, SBDS (i) furnishes ordinary clerical and related services for
day-to-day operations including certain recordkeeping responsibilities; (ii)
takes responsibility for compliance with all applicable federal and state se-
curities and other regulatory requirements; (iii) is responsible for the reg-
istration of sufficient Fund shares under federal and state securities laws;
(iv) takes responsibility for monitoring the Fund's status as a regulated in-
vestment company under the Internal Revenue Code of 1986, as amended ("the
Code"); and (v) performs such administrative and managerial oversight of the
activities of the Trust's and the Portfolio's custodian and transfer agent as
the respective Trustees may
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<PAGE>
direct from time to time. Under the terms of the Trust's and the Portfolio's
Services Agreements with Morgan, the fees of the Administrator are covered by
Morgan's expense undertakings described under Services Agent below.
Under the Trust's Administration Agreement, the annual administration fee rate
is calculated based on the aggregate average daily net assets of The JPM Advi-
sor Funds, as well as The JPM Institutional Funds and The Pierpont Funds,
which are two other families of mutual funds for which SBDS acts as Adminis-
trator. The fee rate is calculated daily in accordance with the following
schedule: 0.040% of the first $1 billion of these funds' aggregate average
daily net assets, 0.032% of the next $2 billion of these funds' aggregate av-
erage daily net assets, 0.024% of the next $2 billion of these funds' aggre-
gate average daily net assets and 0.016% of these funds' aggregate average
daily net assets in excess of $5 billion. This fee rate is then applied to the
net assets of the Fund.
Under the Portfolio's Administration Agreement, the annual administration fee
rate is calculated based on the aggregate average daily net assets of the
Portfolio, as well as all of the other portfolios in which series of The JPM
Advisor Funds, The Pierpont Funds and The JPM Institutional Funds invest. The
fee rate is calculated daily in accordance with the following schedule: 0.010%
of the first $1 billion of these portfolios' aggregate average daily net as-
sets, 0.008% of the next $2 billion of these portfolios' aggregate average
daily net assets, 0.006% of the next $2 billion of these portfolios' aggregate
average daily net assets and 0.004% of these portfolios' aggregate average
daily net assets in excess of $5 billion. This fee rate is then applied to the
net assets of the Portfolio. The Administrator may voluntarily waive a portion
of its fees.
SBDS, a registered broker-dealer, also serves as the Distributor of shares of
the Fund and the Exclusive Placement Agent for the Portfolio. SBDS is a wholly
owned subsidiary of Signature. Signature and its affiliates currently provide
administration and distribution services for a number of registered investment
companies through offices located in Boston, New York, London, Toronto and
George Town, Grand Cayman.
SERVICES AGENT. Under a Financial and Fund Accounting Services Agreement with
the Portfolio and a Services Agreement with the Trust (collectively, the
"Services Agreements"), Morgan acts as Services Agent to the Trust and the
Portfolio and provides shareholder services to shareholders of the Fund. The
agreements provide that Morgan is responsible for certain accounting and oper-
ational services provided to the Fund and the Portfolio, including services
related to tax returns and financial reports. In the case of the Fund, these
services also include matters related to computing the amount of dividends and
the net asset value per share, keeping the books of account and providing
shareholder services to shareholders of the Fund.
In addition, as provided in the agreements, Morgan is responsible for the an-
nual costs of certain usual and customary expenses incurred by the Fund and
the Portfolio (the "expense undertakings"). The expenses covered by the ex-
pense undertakings include, but are not limited to, transfer, registrar, and
dividend disbursing costs, legal and accounting expenses, fees of the Adminis-
trator, insurance, the compensation and expenses of the Trustees, the expenses
of printing and mailing reports, notices, and proxies to Fund shareholders,
and registration fees under federal or state securities laws. The Fund and the
Portfolio will pay these expenses directly and such amounts will be deducted
from the fees to be paid to Morgan under these agreements. If such amounts are
more than the amount of Morgan's fees under the agreements, Morgan will reim-
burse the Fund or the Portfolio, as appropriate, for such excess amounts. Un-
der the Trust's Services Agreement, the following expenses are not included in
the expense undertaking: the services agent fee, organizational expenses and
extraordinary expenses as defined in this agreement. Under the Portfolio's
Services Agreement, the following expenses are not included in the expense un-
dertaking: the fees of Pierpont Group, Inc., custodian fees, advisory fees,
brokerage expenses, the services agent fee, organizational expenses and ex-
traordinary expenses as defined in this agreement.
The Trust's Services Agreement provides for the Fund to pay Morgan a fee for
these services, which is computed daily and may be paid monthly, at the annual
rate of 0.75% of the Fund's average daily net assets. The Portfolio's Services
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<PAGE>
Agreement provides for the Portfolio to pay Morgan a fee for these services,
which is computed daily and may be paid monthly, at the following annual rate
of the Portfolio's average daily net assets: 0.15% on net assets up to $200
million, 0.10% on the next $200 million in net assets, 0.05% on the next $200
million in net assets and 0.03% on net assets thereafter.
As noted above, the fee levels of the Fund and the Portfolio are expense un-
dertakings and reflect payments made directly to third parties by the Fund and
the Portfolio for services rendered, as well as payments to Morgan for serv-
ices rendered. For the Fund and the Portfolio, the Trustees regularly review
amounts paid to and accounted for by Morgan pursuant to these agreements. Un-
der the agreements, Morgan may delegate one or more of its responsibilities to
other entities, including SBDS, at Morgan's expense. See Expenses below.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02101, serves as the Fund's and the Portfolio's Custodian and
Transfer and Dividend Disbursing Agent.
EXPENSES. In addition to the expenses that Morgan assumes under the Services
Agreements, Morgan has agreed that it will reimburse the Fund through at least
December 31, 1995 to the extent necessary to maintain the Fund's total operat-
ing expenses (which includes expenses of the Fund and the Portfolio) at the
annual rate of 1.85% of the Fund's average daily net assets. This limit on
certain expenses does not cover extraordinary increases in these expenses dur-
ing the period and no longer applies in the event of a precipitous decline in
assets due to unforeseen circumstances. There is no assurance that Morgan will
continue this waiver beyond the specified period, except as required by the
following sentence. Morgan has agreed to waive fees as necessary, if in any
fiscal year the sum of the Fund's expenses exceeds the limits set by applica-
ble regulations of state securities commissions. Such annual limits are cur-
rently 2.5% of the first $30 million of average net assets, 2% of the next $70
million of such net assets and 1.5% of such net assets in excess of $100 mil-
lion for any fiscal year.
SHAREHOLDER TRANSACTIONS
Investors may request either Morgan or their Eligible Institution, as defined
below, for assistance in placing orders to purchase, redeem or exchange shares
of the Fund.
Shareholders should address all inquiries to J.P. Morgan Funds Services, Mor-
gan Guaranty Trust Company of New York, 522 Fifth Avenue, New York, New York
10036 or call (800) JPM-3637.
The business days of the Fund and the Portfolio are the days the New York
Stock Exchange is open.
PURCHASE OF SHARES
METHOD OF PURCHASE. Investors may open accounts with the Fund only through the
Distributor. All purchase transactions in Fund accounts are processed by Mor-
gan as Services Agent and the Fund is authorized to accept any instructions
relating to a Fund account from Morgan as agent for the customer. All purchase
orders must be accepted by the Fund's Distributor. Investors must be customers
of Morgan or an eligible institution which is a customer of Morgan (an "Eligi-
ble Institution"). Investors may also be employer-sponsored retirement plans
that have designated the Fund as an investment option for the plans. Prospec-
tive investors who are not already customers of Morgan may apply to become
customers of Morgan for the sole purpose of Fund transactions. There are no
charges associated with becoming a Morgan customer for this purpose. Morgan
reserves the right to determine the customers that it will accept, and the
Fund reserves the right to determine the purchase orders that it will accept.
The Fund requires a minimum initial investment of $5,000.
PURCHASE PRICE AND SETTLEMENT. The Fund's shares are sold on a continuous ba-
sis without a sales charge at the net asset value per share next determined
after receipt of an order. Prospective investors may purchase shares with the
assistance of an Eligible Institution that may establish its own terms, condi-
tions and charges.
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<PAGE>
To purchase shares in the Fund, investors should request their Morgan repre-
sentative (or a representative of their Eligible Institution) to assist them
in placing a purchase order with the Fund's Distributor and to transfer imme-
diately available funds to the Fund's Distributor on the next business day. If
the Fund receives a purchase order prior to 4:00 P.M. New York time on any
business day, the purchase of Fund shares is effective and is made at the net
asset value determined that day, and the purchaser generally becomes a holder
of record on the next business day upon the Fund's receipt of payment. If the
Fund receives a purchase order after 4:00 P.M. New York time, the purchase is
effective and is made at the net asset value determined on the next business
day, and the purchaser becomes a holder of record on the following business
day upon the Fund's receipt of payment.
ELIGIBLE INSTITUTIONS. The services provided by Eligible Institutions may in-
clude establishing and maintaining shareholder accounts, processing purchase
and redemption transactions, arranging for bank wires, performing shareholder
subaccounting, answering client inquiries regarding the Trust, assisting cli-
ents in changing dividend options, account designations and addresses, provid-
ing periodic statements showing the client's account balance and integrating
these statements with those of other transactions and balances in the client's
other accounts serviced by the Eligible Institution, transmitting proxy state-
ments, periodic reports, updated prospectuses and other communications to
shareholders and, with respect to meetings of shareholders, collecting, tabu-
lating and forwarding executed proxies and obtaining such other information
and performing such other services as Morgan or the Eligible Institution's
clients may reasonably request and agree upon with the Eligible Institution.
Eligible Institutions may separately establish their own terms, conditions and
charges for providing the aforementioned services and for providing other
services.
REDEMPTION OF SHARES
METHOD OF REDEMPTION. To redeem shares in the Fund, an investor may instruct
Morgan or his or her Eligible Institution, as appropriate, to submit a redemp-
tion request to the Fund. The Fund executes effective redemption requests at
the next determined net asset value per share. See Net Asset Value. See Addi-
tional Information below for an explanation of the telephone redemption policy
of The JPM Advisor Funds.
A redemption request received by the Fund prior to 4:00 P.M. New York time is
effective on that day. A redemption request received after that time becomes
effective on the next business day. Proceeds of an effective redemption are
generally deposited on the next business day in immediately available funds to
the shareholder's account at Morgan or at his or her Eligible Institution or,
in the case of certain Morgan customers, are mailed by check or wire trans-
ferred in accordance with the customer's instructions and, subject to Further
Redemption Information below, in any event are paid within seven days.
FURTHER REDEMPTION INFORMATION. Investors should be aware that redemptions
from the Fund may not be processed if a redemption request is not submitted in
proper form. To be in proper form, the Fund must have received the sharehold-
er's taxpayer identification number and address. As discussed under Taxes be-
low, the Fund may be required to impose "back-up" withholding of federal in-
come tax on dividends, distributions and redemption proceeds when noncorporate
investors have not provided a certified taxpayer identification number. In ad-
dition, if a shareholder sends a check for the purchase of Fund shares and
shares are purchased before the check has cleared, the transmittal of redemp-
tion proceeds from the shares will occur upon clearance of the check which may
take up to 15 days.
The Fund reserves the right to suspend the right of redemption and to postpone
the date of payment upon redemption for up to seven days and for such other
periods as the 1940 Act or the Securities and Exchange Commission may permit.
See Redemption of Shares in the Statement of Additional Information.
EXCHANGE OF SHARES
An investor may exchange shares from the Fund into any other JPM Advisor Fund
without charge. Shares are exchanged on the basis of relative net asset value
per share. Exchanges are in effect redemptions from one fund and purchases of
14
<PAGE>
another fund and the usual purchase and redemption procedures and requirements
are applicable to exchanges. See Purchase of Shares and Redemption of Shares in
this Prospectus and in the prospectuses for the other JPM Advisor Funds. See
also Additional Information below for an explanation of the telephone exchange
policy of The JPM Advisor Funds.
Shareholders subject to federal income tax who exchange shares in one fund for
shares in another fund may recognize capital gain or loss for federal income
tax purposes. The Fund reserves the right to discontinue, alter or limit its
exchange privilege at any time. For investors in certain states, state securi-
ties laws may restrict the availability of the exchange privilege.
DIVIDENDS AND DISTRIBUTIONS
Dividends consisting of substantially all of the Fund's net investment income,
if any, are declared and paid annually. The Fund may also declare an additional
dividend of net investment income in a given year to the extent necessary to
avoid the imposition of federal excise tax on the Fund.
Substantially all the realized net capital gains, if any, of the Fund are de-
clared and paid on an annual basis, except that an additional capital gains
distribution may be made in a given year to the extent necessary to avoid the
imposition of federal excise tax on the Fund. Declared dividends and distribu-
tions are payable to shareholders of record on the record date.
Dividends and capital gains distributions paid by the Fund are automatically
reinvested in additional shares of the Fund unless the shareholder has elected
to have them paid in cash. Dividends and distributions to be paid in cash are
credited to the shareholder's account at Morgan or at his Eligible Institution
or, in the case of certain Morgan customers, are mailed by check in accordance
with the customer's instructions. The Fund reserves the right to discontinue,
alter or limit the automatic reinvestment privilege at any time.
NET ASSET VALUE
Net asset value per share for the Fund is determined by subtracting from the
value of the Fund's total assets (i.e., the value of its investment in the
Portfolio and other assets) the amount of its liabilities and dividing the re-
mainder by the number of its outstanding shares, rounded to the nearest cent.
Expenses, including the fees payable to Morgan, are accrued daily. See Net As-
set Value in the Statement of Additional Information for information on valua-
tion of portfolio securities for the Portfolio.
The Fund computes its net asset value once daily at 4:15 P.M. New York time on
Monday through Friday, except that the net asset value is not computed for the
Fund on a day in which no orders to purchase or redeem Fund shares have been
received or on the holidays listed under Net Asset Value in the Statement of
Additional Information.
ORGANIZATION
The Trust was organized on September 16, 1994 as an unincorporated business
trust under Massachusetts law and is an entity commonly known as a "Massachu-
setts business trust." The Declaration of Trust permits the Trustees to issue
an unlimited number of full and fractional shares ($0.001 par value) of one or
more series. To date, nine series of shares have been authorized and are avail-
able for sale to the public. Only shares of the Fund are offered through this
Prospectus. No series of shares has any preference over any other series of
shares. See Massachusetts Trust in the Statement of Additional Information.
The Declaration of Trust for the Trust provides that no Trustee, shareholder,
officer, employee, or agent of the Fund shall be held to any personal liabili-
ty, nor shall resort be had to their private property for the satisfaction of
any obligation or claim or otherwise in connection with the affairs of the
Fund, but that the Trust property only shall be liable.
15
<PAGE>
Shareholders of the Fund are entitled to one vote for each share and to the
appropriate fractional vote for each fractional share. There is no cumulative
voting. Shares have no preemptive or conversion rights. Shares are fully paid
and nonassessable by the Fund. The Trust has adopted a policy of not issuing
share certificates. The Trust does not intend to hold meetings of shareholders
annually. The Trustees may call meetings of shareholders for action by share-
holder vote as may be required by either the 1940 Act or the Declaration of
Trust. The Trustees will call a meeting of shareholders to vote on removal of
a Trustee upon the written request of the record holders of ten percent of
Trust shares and will assist shareholders in communicating with each other as
prescribed in Section 16(c) of the 1940 Act. For further organization informa-
tion, including certain shareholder rights, see Description of Shares in the
Statement of Additional Information.
The Portfolio, in which all the assets of the Fund are invested, is a series
(subtrust) of The Series Portfolio, a master trust organized under the laws of
the State of New York. The Series Portfolio's Declaration of Trust provides
that the Fund and other entities investing in the Portfolio (e.g., other in-
vestment companies, insurance company separate accounts and common and commin-
gled trust funds) will each be liable for all obligations of the Portfolio.
However, the risk of the Fund incurring financial loss on account of such lia-
bility is limited to circumstances in which both inadequate insurance existed
and the Portfolio itself was unable to meet its obligations. Accordingly, the
Trustees of the Trust believe that neither the Fund nor its shareholders will
be adversely affected by reason of the Fund's investing in the Portfolio.
TAXES
The following discussion of tax consequences is based on U.S. federal tax laws
in effect on the date of this Prospectus. These laws and regulations are sub-
ject to change by legislative or administrative action. Investors are urged to
consult their own tax advisors with respect to specific questions as to fed-
eral taxes and with respect to the applicability of state or local taxes. See
Taxes in the Statement of Additional Information. Annual statements as to the
current federal tax status of distributions, if applicable, are mailed to
shareholders after the end of the taxable year for the Fund.
The Trust intends to qualify the Fund as a separate regulated investment com-
pany under Subchapter M of the Code. For the Fund to qualify as a regulated
investment company, the Portfolio limits its investments so that at the close
of each quarter of its taxable year (a) no more than 25% of its total assets
are invested in the securities of any one issuer, except U.S. Government secu-
rities, and (b) with regard to 50% of its total assets, no more than 5% of its
total assets are invested in the securities of a single issuer, except U.S.
Government securities. As a regulated investment company, the Fund should not
be subject to federal income taxes or federal excise taxes if all of its net
investment income and capital gains less any available capital loss
carryforwards are distributed to shareholders within allowable time limits.
The Portfolio intends to qualify as an association treated as a partnership
for federal income tax purposes. As such, the Portfolio should not be subject
to tax. The Fund's status as a regulated investment company is dependent on,
among other things, the Portfolio's continued qualification as a partnership
for federal income tax purposes.
If a correct and certified taxpayer identification number is not on file, the
Fund is required, subject to certain exemptions, to withhold 31% of certain
payments made or distributions declared to noncorporate shareholders.
Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses are taxable as ordinary income
to shareholders of the Fund whether such distributions are taken in cash or
reinvested in additional shares. Distributions of this type to corporate
shareholders of the Fund will not qualify for the dividends- received deduc-
tion because the income of the Fund will not consist of dividends paid by U.S.
corporations.
Distributions of net long-term capital gains in excess of net short-term capi-
tal losses are taxable to shareholders of the Fund as long-term capital gains
regardless of how long a shareholder has held shares in the Fund and regard-
less of whether taken in cash or reinvested in additional shares. Long-term
capital gains distributions to corporate shareholders are not eligible for the
dividends-received deduction.
16
<PAGE>
Any distribution of net investment income or capital gains will have the ef-
fect of reducing the net asset value of Fund shares held by a shareholder by
the same amount as the distribution. If the net asset value of the shares is
reduced below a shareholder's cost as a result of such a distribution, the
distribution, although constituting a return of capital to the shareholder,
will be taxable as described above.
Any gain or loss realized on the redemption or exchange of Fund shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held for more than one year, and
otherwise as short-term capital gain or loss. However, any loss realized by a
shareholder upon the redemption or exchange of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of
any long-term capital gain distributions received by the shareholder with re-
spect to such shares.
The Fund is subject to foreign withholding taxes with respect to income re-
ceived from sources within certain foreign countries. So long as more than 50%
of the value of the Fund's total assets at the close of any taxable year con-
sists of stock or securities of foreign corporations, the Fund may elect to
treat any such foreign income taxes paid by it as paid directly by its share-
holders. The Fund will make such an election only if it deems it to be in the
best interests of its shareholders and will notify shareholders in writing
each year if it makes the election and of the amount of foreign income taxes
and gross income derived from sources within any foreign country or possession
of the United States, if any, to be treated as paid by the shareholders. If
the Fund makes the election, each shareholder will be required to include in
income his proportionate share of the amount of foreign income taxes paid by
the Fund and will be entitled to claim either a credit (which is subject to
certain limitations) or, if the shareholder itemizes deductions, a deduction
for his share of the foreign income taxes in computing his federal income tax
liability. (No deduction will be permitted to individuals in computing their
alternative minimum tax liability.)
ADDITIONAL INFORMATION
The Fund sends to its shareholders annual and semi-annual reports. The finan-
cial statements appearing in annual reports are audited by independent accoun-
tants. Shareholders also will be sent confirmations of each purchase and re-
demption and monthly statements, reflecting all other account activity, in-
cluding dividends and any distributions reinvested in additional shares or
credited as cash.
All shareholders are given the privilege to initiate transactions automati-
cally by telephone upon opening an account. However, an investor should be
aware that a transaction authorized by telephone and reasonably believed to be
genuine by the Fund, Morgan, his or her Eligible Institution or the Distribu-
tor may subject the investor to risk of loss if such instruction is subse-
quently found not to be genuine. The Fund will employ reasonable procedures,
including requiring investors to give their Personal Identification Number and
tape recording of telephone instructions, to confirm that instructions commu-
nicated from investors by telephone are genuine; if it does not, it, the Serv-
ices Agent or a shareholder's Eligible Institution may be liable for any
losses due to unauthorized or fraudulent instructions.
The Fund may make historical performance information available and may compare
its performance to other investments or relevant indexes, including data from
Lipper Analytical Services, Inc., Micropal Inc., Morningstar Inc., Ibbotson
Associates, the Tokyo Stock Price Index, Standard & Poor's 500 Composite Stock
Price Index, the Dow Jones Industrial Average, the Frank Russell Indexes, the
Morgan Stanley Europe, Australia and Far East Index, The IFC Investable Index,
the Financial Times World Stock Index and other industry publications.
The Fund may advertise "total return" and non-standardized total return data.
The total return shows what an investment in the Fund would have earned over a
specified period of time (one, five or ten years or since commencement of op-
erations, if less) assuming that all distributions and dividends by the Fund
were reinvested on the reinvestment dates during the period and less all re-
curring fees. This method of calculating total return is required by regula-
tions of the Securities and Exchange Commission. Total return data similarly
calculated, unless otherwise indicated, over other specified periods of time
may also be used. See Performance Data in the Statement of Additional Informa-
tion. All performance figures are based on historical earnings and are not in-
tended to indicate future performance. Performance information may be obtained
by calling the Fund's Distributor at (800) 847-9487.
17
<PAGE>
APPENDIX
The Portfolio may (a) purchase and sell (write) exchange traded and over-the-
counter put and call options on equity securities or indexes of equity securi-
ties, (b) purchase and sell futures contracts on indexes of equity securities
and (c) purchase and sell (write) put and call options on futures contracts on
indexes of equity securities. Each of these instruments is a derivative instru-
ment, as its value derives from the underlying asset or index.
The Portfolio may use futures contracts and options for hedging and risk man-
agement purposes. See Risk Management in the Statement of Additional Informa-
tion. The Portfolio may not use futures contracts and options for speculation.
OPTIONS
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio ob-
tains 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 al-
lowing it to expire or by exercising the option. The Portfolio may also close
out a put option position by entering into an offsetting transaction, if a liq-
uid 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 secu-
rity, 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 of 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 in-
strument underlying the option does not fall enough to offset the cost of pur-
chasing 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 in-
creases 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 po-
sition in a put option it writes before exercise by purchasing an offsetting
option in the market at its current price. If the market is not liquid for a
put option the Portfolio has written, however, 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 pre-
mium 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. This loss should be less than the loss from purchasing and
holding the underlying instrument directly, however, because the premium re-
ceived 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 op-
tion. The characteristics of writing call options are similar to those of writ-
ing put options,
A-1
<PAGE>
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 abil-
ity 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 INDEXES. The Portfolio 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 indexes are similar to options on securities, ex-
cept that the exercise of securities index options is 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 securi-
ties or segment of the securities market rather than price fluctuations in a
single security. The Portfolio, in purchasing or selling index options, is sub-
ject 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 over-the-counter option, it will be rely-
ing 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 speci-
fied 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 under-
lying 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 con-
tract 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 under-
lying instrument, much as if it had purchased the underlying instrument direct-
ly. 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 off-
set both positive and negative market price changes, much as if the underlying
instrument had 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
A-2
<PAGE>
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 Portfo-
lio may be entitled to return of margin owed to it only in proportion to the
amount received by the FCM's other customers, potentially resulting in losses
to the Portfolio.
The Portfolio will segregate liquid, high quality 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.
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-3
<PAGE>
THE JPM ADVISOR FUNDS
The JPM Advisor U.S. Fixed Income Fund
The JPM Advisor International Fixed Income Fund
The JPM Advisor U.S. Equity Fund
The JPM Advisor U.S. Small Cap Equity Fund
The JPM Advisor International Equity Fund
The JPM Advisor European Equity Fund
The JPM Advisor Asia Growth Fund
The JPM Advisor Japan Equity Fund
The JPM Advisor Emerging Markets Equity Fund
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 jurisdiction.
ADVPROS407
The JPM Advisor Asia Growth Fund
PROSPECTUS
August 28, 1995
<PAGE>
PROSPECTUS
The JPM Advisor International Equity Fund
6 St. James Avenue
Boston, Massachusetts 02116
For information call (800) JPM-3637
The JPM Advisor International Equity Fund (the "Fund") seeks to provide a high
total return from a portfolio of equity securities of foreign corporations. It
is designed for investors with a long-term investment horizon who want to di-
versify their portfolios by investing in an actively managed portfolio of non-
U.S. securities that seeks to outperform the Morgan Stanley Europe, Australia
and Far East Index.
The Fund is a diversified no-load mutual fund for which there are no sales
charges or exchange or redemption fees. The Fund is a series of The JPM Advisor
Funds, an open-end management investment company organized as a Massachusetts
business trust (the "Trust").
UNLIKE OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND MANAGE THEIR OWN PORTFOLIO
OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING
ALL OF ITS INVESTABLE ASSETS IN THE NON-U.S. EQUITY PORTFOLIO (THE "PORTFO-
LIO"), A CORRESPONDING DIVERSIFIED OPEN-END MANAGEMENT INVESTMENT COMPANY HAV-
ING THE SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND INVESTS IN THE PORTFO-
LIO THROUGH SIGNATURE FINANCIAL GROUP, INC.'S HUB AND SPOKE(R) FINANCIAL SERV-
ICES METHOD. HUB AND SPOKE(R) EMPLOYS A TWO-TIER MASTER-FEEDER STRUCTURE AND IS
A REGISTERED SERVICE MARK OF SIGNATURE FINANCIAL GROUP, INC. SEE SPECIAL INFOR-
MATION CONCERNING HUB AND SPOKE(R) ON PAGE 2.
The Portfolio is advised by Morgan Guaranty Trust Company of New York ("Morgan"
or the "Advisor").
This Prospectus sets forth concisely the information about the Fund that a pro-
spective investor ought to know before investing and it should be retained for
future reference. Additional information about the Fund has been filed with the
Securities and Exchange Commission in a Statement of Additional Information
dated March 31, 1995 (as supplemented from time to time). This information is
incorporated herein by reference and is available without charge upon written
request from the Fund's Distributor, Signature Broker-Dealer Services, Inc., 6
St. James Avenue, Boston, Massachusetts 02116, Attention: The JPM Advisor
Funds, or by calling (800) 847-9487.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK OR ANY OTHER BANK.
SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. AN
INVESTMENT IN THE FUND IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE IN-
VESTMENT 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 AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 28, 1995.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Investors for Whom the Fund Is Designed.................................... 1
Special Information Concerning Hub and Spoke(R)............................ 2
Investment Objective and Policies.......................................... 3
Risk Factors and Additional Investment Information......................... 5
Investment Restrictions.................................................... 9
Management of the Trust and the Portfolio.................................. 10
Shareholder Transactions................................................... 12
Purchase of Shares......................................................... 13
Redemption of Shares....................................................... 13
</TABLE>
PAGE
<TABLE>
<S> <C>
Exchange of Shares.......................................................... 14
Dividends and Distributions................................................. 14
Net Asset Value............................................................. 15
Organization................................................................ 15
Taxes....................................................................... 15
Additional Information...................................................... 17
Appendix.................................................................... A-1
Options..................................................................... A-1
Futures Contracts........................................................... A-2
</TABLE>
<PAGE>
The JPM Advisor International Equity Fund
INVESTORS FOR WHOM THE FUND IS DESIGNED
The Fund is designed for investors who seek to diversify their investments by
adding international equities. The Fund seeks to achieve its investment objec-
tive by investing all of its investable assets in The Non-U.S. Equity Portfo-
lio, a diversified open-end management investment company having the same in-
vestment objective as the Fund. Since the investment characteristics and expe-
rience of the Fund will correspond directly with those of the Portfolio, the
discussion in this Prospectus focuses on the investments and investment poli-
cies of the Portfolio. The net asset value of shares in the Fund fluctuates
with changes in the value of the investments in the Portfolio.
The Portfolio may make various types of investments in seeking its objective.
Among the permissible investments and investment techniques for the Portfolio
are futures contracts, options and forward contracts on foreign currencies. The
potential risks of investing in these derivative instruments are discussed in
Risk Factors and Additional Investment Information and the Appendix. The Port-
folio may also purchase certain privately placed securities. The Portfolio's
investments in securities of foreign issuers, including issuers in emerging
markets, involve foreign investment risks and may be more volatile and less
liquid than domestic securities. For further information about these invest-
ments, see Investment Objective and Policies below.
The Fund requires a minimum initial investment of $5,000. See Purchase of
Shares.
This Prospectus describes the investment objective and policies, management and
operation of the Fund to enable investors to decide if the Fund suits their
needs. The Fund operates through Signature Financial Group, Inc.'s ("Signa-
ture") Hub and Spoke (R) financial services method. The Trustees of the Trust
believe that the Fund may achieve economies of scale over time by investing
through Hub and Spoke (R).
The following table illustrates that investors in the Fund incur no shareholder
transaction expenses; their investment in the Fund is subject only to the oper-
ating expenses set forth below for the Fund and the Portfolio, as a percentage
of average net assets of the Fund. The Trustees of the Trust believe that the
aggregate per share expenses of the Fund and the Portfolio will be approxi-
mately equal to and may be less than the expenses that the Fund would incur if
it retained the services of an investment adviser and invested its assets di-
rectly in portfolio securities. Fund and Portfolio expenses are discussed below
under the headings Management of the Trust and the Portfolio--Expenses.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases............................................ None
Sales Load Imposed on Reinvested Dividends................................. None
Deferred Sales Load........................................................ None
Redemption Fees............................................................ None
Exchange Fees.............................................................. None
</TABLE>
1
<PAGE>
EXPENSE TABLE
ANNUAL OPERATING EXPENSES*
<TABLE>
<S> <C>
Advisory Fees............................................................. 0.60%
Rule 12b-1 Fees........................................................... None
Other Expenses (after expense reimbursement).............................. 1.05%
----
Total Operating Expenses (after expense reimbursement).................... 1.65%
</TABLE>
* These expenses are based on estimated expenses of the Fund and the Portfolio
and estimated average net assets for the Fund's first fiscal year, after re-
imbursement. Without such expected reimbursement, the estimated Total Operat-
ing Expenses would be equal on an annual basis to 1.70% of the estimated av-
erage net assets of the Fund. See Management of the Trust and the Portfolio--
Expenses.
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..................................................................... $ 17
3 Years.................................................................... $ 52
5 Years.................................................................... $ 90
10 Years................................................................... $196
</TABLE>
The above expense table is designed to assist investors in understanding the
various direct and indirect costs and expenses that investors in the Fund bear.
The fees and expenses included in Other Expenses are the fees paid to Morgan
under the Financial and Fund Accounting Services and Services Agreements, and
fees paid to State Street Bank and Trust Company as custodian of the Portfolio.
For a more detailed description of contractual fee arrangements, including ex-
pense reimbursements, and of the fees and expenses included in Other Expenses,
see Management of the Trust and the Portfolio. In connection with the above ex-
ample, please note that $1,000 is less than the Fund's minimum investment re-
quirement and that there are no redemption or exchange fees of any kind. See
Purchase of Shares and Redemption of Shares. THE EXAMPLE IS HYPOTHETICAL; IT IS
INCLUDED SOLELY FOR ILLUSTRATIVE PURPOSES. IT SHOULD NOT BE CONSIDERED A REPRE-
SENTATION OF FUTURE PERFORMANCE; ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN.
The Fund's annual report will include a discussion of those factors, strategies
and techniques that materially affected its performance during the period of
the report, as well as certain related information. A copy of the Fund's annual
report will be made available without charge upon request.
SPECIAL INFORMATION CONCERNING HUB AND SPOKE(R)
The Trust and the Portfolio use certain proprietary rights, know-how and finan-
cial services referred to as Hub and Spoke(R). Hub and Spoke(R) is a registered
service mark of Signature. Signature Broker-Dealer Services, Inc. (the Trust's
and Portfolio's Administrator and the Trust's Distributor) is a wholly owned
subsidiary of Signature.
Unlike other mutual funds which directly acquire and manage their own portfolio
of securities, the Fund is an open-end management investment company which
seeks to achieve its investment objective by investing all of its investable
assets in the Portfolio, a separate registered investment company with the same
investment objective as the Fund. The investment objective of the Fund or Port-
folio may be changed only with the approval of the holders of the outstanding
shares of the Fund and the Portfolio. The use of Hub and Spoke(R) has been ap-
proved by the shareholders of the Fund.
2
<PAGE>
In addition to selling a beneficial interest to the Fund, the Portfolio may
sell beneficial interests to other mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions
and will pay a proportionate share of the Portfolio's expenses. However, the
other investors investing in the Portfolio may sell shares of their own fund
using a different pricing structure than the Fund. Such different pricing
structures may result in differences in returns experienced by investors in
other funds that invest in the Portfolio. Such differences in returns are not
uncommon and are present in other mutual fund structures. Information concern-
ing other holders of interests in the Portfolio is available from the Adminis-
trator at (800) 847-9487.
The Trust may withdraw the investment of the Fund from the Portfolio at any
time if the Board of Trustees of the Trust determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Board of Trustees
would consider what action might be taken, including the investment of all the
assets of the Fund in another pooled investment entity having the same invest-
ment objective and restrictions as the Fund or the retaining of an investment
adviser to manage the Fund's assets in accordance with the investment policies
described below with respect to the Portfolio.
Certain changes in the Portfolio's investment objective, policies or restric-
tions, or a failure by the Fund's shareholders to approve a change in the Port-
folio's investment objective or restrictions, may require withdrawal of the
Fund's interest in the Portfolio. Any such withdrawal could result in a distri-
bution in kind of portfolio securities (as opposed to a cash distribution) from
the Portfolio which may or may not be readily marketable. The distribution in
kind may result in the Fund having a less diversified portfolio of investments
or adversely affect the Fund's liquidity, and the Fund could incur brokerage,
tax or other charges in converting the securities to cash. Notwithstanding the
above, there are other means for meeting shareholder redemption requests, such
as borrowing.
Smaller funds investing in the Portfolio may be materially affected by the ac-
tions of larger funds investing in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining funds may subsequently experience
higher pro rata operating expenses, thereby producing lower returns. Addition-
ally, because the Portfolio would become smaller, it may become less diversi-
fied, resulting in potentially increased portfolio risk (however, these possi-
bilities also exist for traditionally structured funds which have large or in-
stitutional investors who may withdraw from a fund). Also, funds with a greater
pro rata ownership in the Portfolio could have effective voting control of the
operations of the Portfolio. Whenever the Fund is requested to vote on matters
pertaining to the Portfolio (other than a vote by the Fund to continue the op-
eration of the Portfolio upon the withdrawal of another investor in the Portfo-
lio), the Trust will hold a meeting of shareholders of the Fund and will cast
all of its votes proportionately as instructed by the Fund's shareholders. The
Trust will vote the shares held by Fund shareholders who do not give voting in-
structions in the same proportion as the shares of Fund shareholders who do
give voting instructions. Shareholders of the Fund who do not vote will have no
effect on the outcome of such matters.
For more information about the Portfolio's investment objective, policies and
restrictions, see Investment Objective and Policies, Risk Factors and Addi-
tional Investment Information and Investment Restrictions. For more information
about the Portfolio's management and expenses, see Management of the Trust and
the Portfolio. For more information about changing the investment objective,
policies and restrictions of the Fund or the Portfolio, see Investment Restric-
tions.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund and the Portfolio is described below, to-
gether with the policies they employ in their efforts to achieve this objec-
tive. Additional information about the investment policies of the Fund and the
Portfolio appears in the Statement of Additional Information under Investment
Objectives and Policies. There can be no assurance that the investment objec-
tive of the Fund or the Portfolio will be achieved.
3
<PAGE>
The Fund's investment objective is to provide a high total return from a port-
folio of equity securities of foreign corporations. Total return will consist
of realized and unrealized capital gains and losses plus income. The Fund at-
tempts to achieve its investment objective by investing all of its investable
assets in The Non-U.S. Equity Portfolio, a diversified open-end management in-
vestment company having the same investment objective as the Fund. Under cer-
tain market conditions, the Fund or the Portfolio may not be able to achieve
its investment objective.
The Fund is designed for investors with a long-term investment horizon who want
to diversify their portfolios by investing in an actively managed portfolio of
non-U.S. securities that seeks to outperform the Morgan Stanley Europe, Austra-
lia and Far East Index (the "EAFE Index").
The Portfolio seeks to achieve its investment objective through country alloca-
tion, stock selection and management of currency exposure. Morgan uses a disci-
plined portfolio construction process to seek to enhance returns and reduce
volatility in the market value of the Portfolio relative to that of the EAFE
Index.
Based on fundamental research, quantitative valuation techniques and experi-
enced judgment, Morgan uses a structured decision-making process to allocate
the Portfolio primarily across the developed countries of the world outside the
United States by under- or over-weighing selected countries in the EAFE Index.
Currently, Japan has the heaviest weighting in the EAFE Index and in the Port-
folio. At June 30, 1995, the approximate Japan weighting was 41% in the EAFE
Index and 44% in the Portfolio.
Using a dividend discount model and based on analysts' industry expertise, se-
curities within each country are ranked within economic sectors according to
their relative value. Based on this valuation, Morgan selects the securities
which appear the most attractive for the Portfolio. Morgan believes that under
normal market conditions, economic sector weightings generally will be similar
to those of the EAFE.
Finally, Morgan actively manages currency exposure, in conjunction with country
and stock allocation, in an attempt to protect and possibly enhance the Portfo-
lio's market value. Through the use of forward foreign currency exchange con-
tracts, Morgan will adjust the Portfolio's foreign currency weightings to re-
duce its exposure to currencies deemed unattractive and, in certain circum-
stances, increase exposure to currencies deemed attractive, as market condi-
tions warrant, based on fundamental research, technical factors, and the judg-
ment of a team of experienced currency managers. For further information on
foreign currency exchange transactions, see Risk Factors and Additional Invest-
ment Information.
The Portfolio intends to manage its portfolio actively in pursuit of its in-
vestment 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 realize short-term capital gains or losses and
incur increased transaction costs. See Taxes below. The estimated annual port-
folio turnover rate for the Portfolio is generally not expected to exceed 100%.
EQUITY INVESTMENTS. In normal circumstances, the Advisor intends to keep the
Portfolio essentially fully invested with at least 65% of the value of its to-
tal assets in equity securities of foreign issuers consisting of common stocks
and other securities with equity characteristics comprised of preferred stock,
warrants, rights, convertible securities, trust certificates, limited partner-
ship interests and equity participations. The Portfolio's primary equity in-
vestments are the common stock of established companies based in developed
countries outside the United States. Such investments will be made in at least
three foreign countries. The common stock in which the Portfolio may invest in-
cludes 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 may
also invest in securities of issuers located in developing countries. See Risk
Factors and Additional Investment Information. The Portfolio invests in securi-
ties listed on foreign or domestic securities exchanges and securities traded
in foreign or domestic over-the-counter markets, and may invest in certain re-
stricted or unlisted securities.
4
<PAGE>
The Portfolio may also invest in money market instruments denominated in U.S.
dollars and other currencies, purchase 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, enter
into forward contracts on foreign currencies and enter into certain hedging
transactions that may involve options on securities and securities indexes,
futures contracts and options on futures contracts. Forward foreign currency
exchange contracts, options and futures contracts are derivative instruments.
For a discussion of these investments and investment techniques, see Risk Fac-
tors and Additional Investment Information.
RISK FACTORS AND ADDITIONAL INVESTMENT INFORMATION
FOREIGN INVESTMENT INFORMATION. The Portfolio invests primarily in foreign se-
curities. Investment in securities of foreign issuers involves somewhat dif-
ferent investment risks from those affecting securities of U.S. domestic is-
suers. There may be limited publicly available information with respect to
foreign issuers, and foreign issuers are not generally subject to uniform ac-
counting, 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 de-
crease the net return on foreign investments as compared to dividends and in-
terest paid to the Portfolio by domestic companies.
Investors should realize that the value of the Portfolio's investments in for-
eign securities may be adversely affected by changes in political or social
conditions, diplomatic relations, confiscatory taxation, expropriation, na-
tionalization, 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 United States or abroad could result in appreciation or depre-
ciation of portfolio securities and could favorably or unfavorably affect the
Portfolio's operations. Furthermore, the economies of individual foreign na-
tions may differ from the U.S. economy, whether favorably or unfavorably, in
areas such as growth of gross national product, rate of inflation, capital re-
investment, resource self-sufficiency and balance of payments position; it may
also be more difficult to obtain and enforce a judgment against a foreign is-
suer. Any foreign investments made by the Portfolio must be made in compliance
with 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 ex-
changes has increased in recent years, in most cases it remains appreciably
below that of domestic security exchanges. Accordingly, the Portfolio's for-
eign investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. Moreover, the settle-
ment periods for foreign securities, which are often longer than those for se-
curities of U.S. issuers, may affect portfolio liquidity. In buying and sell-
ing securities on foreign exchanges, purchasers normally pay fixed commissions
that are generally higher than the negotiated commissions charged in the
United States. In addition, there is generally less government supervision and
regulation of securities exchanges, brokers and issuers located in foreign
countries than in the United States.
Although the Portfolio invests primarily in securities of established issuers
based in developed foreign countries, it may also invest in securities of is-
suers in emerging markets countries. Investments in securities of issuers in
emerging markets countries may involve a high degree of risk and many may be
considered speculative. These investments carry all of the risks of investing
in securities of foreign issuers outlined in this section to a heightened de-
gree. These heightened risks include (i) greater risks of expropriation, con-
fiscatory taxation, nationalization, and less social, political and economic
stability; (ii) the small current size of the markets for securities of emerg-
ing markets issuers and the currently low or nonexistent 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 rele-
vant national interests; and (iv) the absence of developed legal structures
governing private or foreign investment and private property.
5
<PAGE>
The Portfolio may invest in securities of foreign issuers directly or in the
form of American Depositary Receipts ("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 insti-
tutions issuing ADRs may not be sponsored by the issuer of the underlying for-
eign securities. A non-sponsored depository may not provide the same share-
holder information that a sponsored depository is required to provide under
its contractual arrangements with the issuer of the underlying foreign securi-
ties. 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 the Portfolio's investments in foreign securities involve foreign cur-
rencies, the value of its 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 Trans-
actions.
For a discussion of investment risks associated with the general economic and
political conditions in Japan, see Investment Objectives and Policies in the
Statement of Additional Information.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the Portfolio buys and sells
securities and receives interest and dividends in currencies other than the
U.S. dollar, the Portfolio may enter from time to time 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 curren-
cies. The cost of the Portfolio's spot currency exchange transactions is gen-
erally the difference between the bid and offer spot rate of the currency be-
ing 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 con-
tracts are derivative instruments, as their value derives from the spot ex-
change rates of the currencies underlying the contract. These contracts are
entered into in the interbank market directly between currency traders (usu-
ally 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. The Portfolio will not enter into forward contracts
for speculative purposes. Neither spot transactions nor forward foreign cur-
rency exchange contracts eliminate fluctuations in the prices of the Portfo-
lio's securities or in foreign exchange rates, or prevent loss if the prices
of these securities should decline.
The Portfolio may enter into foreign currency exchange transactions in an at-
tempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or antici-
pated securities transactions. The Portfolio may also enter into forward con-
tracts to hedge against a change in foreign currency exchange rates that would
cause a decline in the value of existing investments denominated or princi-
pally traded in a foreign currency. To do this, the Portfolio would enter into
a forward contract to sell the foreign currency in which the investment is de-
nominated or principally traded in exchange for U.S. dollars or in exchange
for another foreign currency. The Portfolio will only enter into forward con-
tracts to sell a foreign currency in exchange for another foreign currency if
the Advisor expects the foreign currency purchased to appreciate against the
U.S. dollar.
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 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 fluc-
tuations in the value of the currency purchased against 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
6
<PAGE>
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 securi-
ties between the date the forward contract is entered into and the date it ma-
tures. The projection of currency market movements is extremely difficult, and
the successful execution of a hedging strategy is highly uncertain.
CONVERTIBLE SECURITIES. 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. Convert-
ible 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.
WARRANTS. The Portfolio invests in warrants, which entitle the holder to buy
common stock from the issuer at a specific price (the strike price) for a spe-
cific period of time. The strike price of warrants sometimes is much lower
than the current market price of the underlying securities, yet warrants are
subject to similar price fluctuations. As a result, warrants may be more vola-
tile investments than the underlying securities.
Warrants do not entitle the holder to dividends or voting rights with respect
to the underlying securities and do not represent any rights in the assets of
the issuing company. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to the expiration date.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase secu-
rities 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 fluc-
tuation during this period and for money market instruments no 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 main-
tains with the Custodian a separate account with a segregated portfolio of se-
curities in an amount at least equal to these commitments. 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 trans-
actions with brokers, dealers or banks that meet the credit guidelines estab-
lished by the Portfolio's Trustees. 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 re-
spect to the seller, the Portfolio's realization upon the disposition of col-
lateral may be delayed or limited. Investments in certain repurchase agree-
ments and certain other investments which may be considered illiquid are lim-
ited. See Illiquid Investments; Privately Placed and other Unregistered Secu-
rities below.
LOANS OF PORTFOLIO SECURITIES. Subject to applicable investment restrictions,
the Portfolio is permitted to lend its securities in an amount up to 33 1/3%
of the value of the Portfolio's net assets. The Portfolio may lend its securi-
ties 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 in-
come accruing thereon. Loans will be subject to termination by the Portfolio
in the normal settlement time, generally three business days after notice, or
by the borrower on one day's notice. Bor- rowed securities must be returned
when the loan is terminated. Any gain or loss in the market price of the bor-
rowed
7
<PAGE>
securities which occurs during the term of the loan inures to the Portfolio
and its respective investors. The Portfolio may pay reasonable finders' and
custodial fees in connection with a loan. In addition, the Portfolio will con-
sider all facts and circumstances, including the creditworthiness of the bor-
rowing financial institution, and the Portfolio will not make any loans in ex-
cess of one year. The Portfolio will not lend its securities to any officer,
Trustee, Director, employee or other affiliate of the Portfolio, the Advisor
or the Distributor, unless otherwise permitted by applicable law.
REVERSE REPURCHASE AGREEMENTS. The Portfolio is permitted to enter into re-
verse 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 agree-
ment. For purposes of the Investment Company Act of 1940 (the "1940 Act"), it
is considered as a form of borrowing by the Portfolio and, therefore, is a
form of leverage. Leverage may cause any gains or losses of the Portfolio to
be magnified. For more information, see Investment Objectives and Policies in
the Statement of Additional Information.
ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES. The
Portfolio may not 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
illiquid investments. In addition, the Portfolio will not invest more than 5%
of the market value of its total assets in restricted securities that cannot
be offered for public sale in the United States without first being registered
under the Securities Act of 1933. Subject to these non-fundamental policy lim-
itations, the Portfolio may acquire investments that are illiquid or have lim-
ited liquidity, such as private placements or investments that are not regis-
tered under the Securities Act of 1933 (the "1933 Act"). An illiquid invest-
ment 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 re-
ceives upon resale may be lower than the price paid or received for similar
securities with a more liquid market. Accordingly the valuation of these secu-
rities will reflect any limitations on their liquidity.
The Portfolio may also purchase Rule 144A securities sold to institutional in-
vestors without registration under the 1933 Act. These securities may be de-
termined to be liquid in accordance with guidelines established by the Advisor
and approved by the Trustees of the Portfolio. The Trustees will monitor the
Advisor's implementation of these guidelines on a periodic basis.
FUTURES AND OPTIONS TRANSACTIONS. The Portfolio may (a) purchase exchange
traded and over-the-counter put and call options on equity securities or in-
dexes of equity securities, (b) purchase and sell futures contracts on indexes
of equity securities, and (c) purchase put and call options on futures con-
tracts on indexes of equity securities. Each of these instruments is a deriva-
tive instrument, as its value derives from the underlying asset or index.
The Portfolio may use futures contracts and options for hedging purposes. The
Portfolio may not use futures contracts 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, in-
cluding buying futures contracts and buying calls, tend to increase market ex-
posure. 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 Advisor
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 Ad-
visor applies a strategy at an inappropriate time or judges market conditions
or trends incorrectly, options and futures strategies may lower the Portfo-
8
<PAGE>
lio's return. Certain strategies limit the Portfolio's possibilities to realize
gains as well as limiting its exposure to losses. The Portfolio could also ex-
perience 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 posi-
tions 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 may purchase put and call options on securities, indexes of secu-
rities and futures contracts, or purchase and sell futures contracts, only if
such options are written by other persons and if (i) the aggregate premiums
paid on all such options which are held at any time do not exceed 20% of the
Portfolio's net assets, and (ii) the aggregate margin deposits required on all
such futures or options or thereon held at any time do not exceed 5% of the
Portfolio's total assets. For more detailed information about these transac-
tions, see the Appendix to this Prospectus and Investment Objectives and Poli-
cies 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 equity securities to the
extent practical in light of its objective and long-term investment perspec-
tive. The Portfolio may invest in money market instruments of domestic or for-
eign issuers denominated in U.S. dollars and other currencies. Under normal
circumstances the Portfolio will purchase these securities to invest temporary
cash balances or to maintain liquidity to meet redemptions. However, the Port-
folio may also invest in money market instruments without limitation as a tem-
porary defensive measure taken in the Advisor's judgment during, or in antici-
pation of, adverse market conditions. For more detailed information about these
money market investments, see Investment Objectives and Policies in the State-
ment of Additional information.
INVESTMENT RESTRICTIONS
As a diversified investment company, 75% of the assets of the Portfolio are
subject to the following fundamental limitations: (a) the Portfolio may not in-
vest more than 5% of its total assets in the securities of any one issuer, ex-
cept U.S. government securities, and (b) the Portfolio may not own more than
10% of the outstanding voting securities of any one issuer.
The investment objective of the Fund and the Portfolio, together with the in-
vestment restrictions described below and in the Statement of Additional Infor-
mation, except as noted, are deemed fundamental policies, i.e., they may be
changed only with the approval of the holders of a majority of the outstanding
voting securities of the Fund and the Portfolio. The Fund has the same invest-
ment restrictions as the Portfolio, except that the Fund may invest all of its
investable assets in another open-end investment company with the same invest-
ment objective and restrictions (such as the Portfolio). References below to
the Portfolio's investment restrictions also include the Fund's investment re-
strictions.
The Portfolio may not (i) purchase securities or other obligations of issuers
conducting their principal business activity in the same industry if its in-
vestments in such industry would exceed 25% of the value of the Portfolio's to-
tal assets, except this limitation shall not apply to investments in U.S. Gov-
ernment securities; (ii) enter into reverse repurchase agreements and other
permitted borrowings which constitute senior securities under the 1940 Act, ex-
ceeding in the aggregate one-third of the market value of the Portfolio's total
assets, less certain liabilities; or (iii) borrow money, except from banks for
extraordinary or emergency purposes and then only in amounts up to 30% of the
value of the Portfolio's net assets at the time of borrowing, and except in
connection with reverse repurchase agreements and then only in amounts up to 33
1/3% of the value of the Portfolio's net assets; or purchase securities while
borrowings, including reverse repurchase agreements, exceed 5% of its total as-
sets; or mortgage, pledge or hypothecate any assets except in connection with
any such borrowing and in amounts not to exceed 30% of the value of the Portfo-
lio's net assets at the time of such borrowing.
For a more detailed discussion of the above investment restrictions, as well as
a description of certain other investment restrictions, see Investment Restric-
tions in the Statement of Additional Information.
9
<PAGE>
MANAGEMENT OF THE TRUST AND THE PORTFOLIO
TRUSTEES. 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
Trust's Administrator, Distributor, Services Agent, and other service provid-
ers and the performance of the Portfolio's Advisor. Pursuant to the Declara-
tion of Trust for the Portfolio, the Trustees of the Portfolio (who are not
the same as the Trustees of the Trust) have the same responsibilities for the
Portfolio including overseeing its service providers.
The Portfolio has entered into a Fund Services Agreement with Pierpont Group,
Inc. to assist the Trustees of the Portfolio in exercising their overall su-
pervisory responsibilities for the Portfolio's affairs. The fee to be paid by
the Portfolio under the agreement approximates the reasonable cost of Pierpont
Group, Inc. in providing these services. Pierpont Group, Inc. was organized in
1989 at the request of the Trustees of The Pierpont Family of Funds for the
purpose of providing these services as cost to these funds. The principal of-
fices of Pierpont Group, Inc. are located at 461 Fifth Avenue, New York, New
York 10017. For more information concerning the Trust's and the Portfolio's
Trustees and officers, see Trustees and Officers in the Statement of Addi-
tional Information.
ADVISOR. The Fund has not retained the services of an investment adviser be-
cause the Fund seeks to achieve its investment objective by investing all of
its investable assets in the Portfolio. The Portfolio has retained the serv-
ices of Morgan as Investment Advisor. Morgan, with principal offices at 60
Wall Street, New York, New York 10260, is a New York trust company which con-
ducts a general banking and trust business. Morgan is a wholly owned subsidi-
ary 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 the Advisor and other subsidiaries, offers a wide
range of services to governmental, institutional, corporate and individual
customers and acts as investment adviser to individual and institutional cli-
ents with combined assets under management of over $165 billion (of which the
Advisor advises over $26 billion). Morgan provides investment advice and port-
folio management services to the Portfolio. Subject to the supervision of the
Portfolio's Trustees, Morgan makes the Portfolio's day-to-day investment deci-
sions, arranges for the execution of portfolio transactions and generally man-
ages the Portfolio's investments. See Investment Advisor in the Statement of
Additional Information.
Morgan uses a sophisticated, disciplined, collaborative process for managing
all asset classes. For equity portfolios, this process utilizes fundamental
research, systematic stock selection, disciplined portfolio construction and,
in the case of foreign equities, country exposure and currency management.
Morgan has managed portfolios of international equity securities on behalf of
its clients since 1974. The portfolio managers making investments in interna-
tional equity securities work in conjunction with Morgan's international eq-
uity analysts, as well as capital market, credit and economic research ana-
lysts, traders and administrative officers. The international equity analysts,
located in London, Tokyo, Singapore and Melbourne, each cover a different in-
dustry, monitoring a universe of nearly 1,000 non-U.S. companies.
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 his business experience
for the past five years is indicated parenthetically): Paul A. Quinsee, Vice
President (since April, 1993, employed by Morgan since February, 1992 and by
Citibank, N.A. prior to 1992 as a portfolio manager of international equity
investments) and Thomas P. Madsen, Managing Director (since April, 1993, em-
ployed by Morgan since prior to 1990 as a portfolio manager of international
equity investments).
As compensation for the services rendered and related expenses borne by Morgan
under the Investment Advisory Agreement with the Portfolio, the Portfolio has
agreed to pay Morgan a fee, which is computed daily and may be paid monthly,
at the annual rate of 0.60% of the Portfolio's average daily net assets.
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Morgan also acts as Services Agent to the Trust and the Portfolio and provides
shareholder services to shareholders of the Fund. See Services Agent below.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK OR ANY OTHER BANK.
ADMINISTRATOR AND DISTRIBUTOR. Under Administration Agreements with the Trust
and the Portfolio, Signature Broker-Dealer Services, Inc. ("SBDS") serves as
the Administrator for the Trust and the Portfolio and in that capacity super-
vises the Fund's and the Portfolio's day-to-day operations other than manage-
ment of the Portfolio's investments. In this capacity, SBDS administers and
manages all aspects of the Fund's and the Portfolio's day-to-day operations
subject to the supervision of the Trustees, except as set forth under Advisor,
Services Agent and Custodian. In connection with its responsibilities as Ad-
ministrator, SBDS (i) furnishes ordinary clerical and related services for
day-to-day operations including certain recordkeeping responsibilities; (ii)
takes responsibility for compliance with all applicable federal and state se-
curities and other regulatory requirements; (iii) is responsible for the reg-
istration of sufficient Fund shares under federal and state securities laws;
(iv) takes responsibility for monitoring the Fund's status as a regulated in-
vestment company under the Internal Revenue Code of 1986, amended (the
"Code"); and (v) performs such administrative and managerial oversight of the
activities of the Trust's and the Portfolio's custodian and transfer agent as
the respective Trustees may direct from time to time. Under the terms of the
Trust's and the Portfolio's Services Agreements with Morgan, the fees of the
Administrator are covered by Morgan's expense undertakings described under
Services Agent below.
Under the Trust's Administration Agreement, the annual administration fee rate
is calculated based on the aggregate average daily net assets of The JPM Advi-
sor Funds, as well as The JPM Institutional Funds and The Pierpont Funds,
which are two other families of mutual funds for which SBDS acts as Adminis-
trator. The fee rate is calculated daily in accordance with the following
schedule: 0.040% of the first $1 billion of these funds' aggregate average
daily net assets, 0.032% of the next $2 billion of these funds' aggregate av-
erage daily net assets, 0.024% of the next $2 billion of these funds' aggre-
gate average daily net assets and 0.016% of these funds' aggregate average
daily net assets in excess of $5 billion. This fee rate is then applied to the
net assets of the Fund.
Under the Portfolio's Administration Agreement, the annual administration fee
rate is calculated based on the aggregate average daily net assets of the
Portfolio, as well as all of the other portfolios in which series of The JPM
Advisor Funds, The JPM Institutional Funds and The Pierpont Funds invest. The
fee rate is calculated daily in accordance with the following schedule: 0.010%
of the first $1 billion of these portfolios' aggregate average daily net as-
sets, 0.008% of the next $2 billion of these portfolios' aggregate average
daily net assets, 0.006% of the next $2 billion of these portfolios' aggregate
average daily net assets and 0.004% of these portfolios' aggregate average
daily net assets in excess of $5 billion. This fee rate is then applied to the
net assets of the Portfolio. The Administrator may voluntarily waive a portion
of its fees.
SBDS, a registered broker-dealer, also serves as the Distributor of shares of
the Fund and the Exclusive Placement Agent for the Portfolio. SBDS is a wholly
owned subsidiary of Signature. Signature and its affiliates currently provide
administration and distribution services for a number of registered investment
companies through offices located in Boston, New York, London, Toronto and
George Town, Grand Cayman.
SERVICES AGENT. Under a Financial and Fund Accounting Services Agreement with
the Portfolio and a Services Agreement with the Trust (collectively, the
"Services Agreements"), Morgan acts as Services Agent to the Trust and the
Portfolio and provides shareholder services to shareholders of the Fund. The
agreements provide that Morgan is responsible for certain accounting and oper-
ational services provided to the Fund and the Portfolio, including services
related to tax returns and financial reports. In the case of the Fund, these
services also include matters related to computing the amount of dividends and
the net asset value per share, keeping the books of account and providing
shareholder services to shareholders of the Fund.
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<PAGE>
In addition, as provided in the agreements, Morgan is responsible for the an-
nual costs of certain usual and customary expenses incurred by the Fund and
the Portfolio (the "expense undertakings"). The expenses covered by the ex-
pense undertakings include, but are not limited to, transfer, registrar, and
dividend disbursing costs, legal and accounting expenses, fees of the Adminis-
trator, insurance, the compensation and expenses of the Trustees, the expenses
of printing and mailing reports, notices, and proxies to Fund shareholders,
and registration fees under federal or state securities laws. The Fund and the
Portfolio will pay these expenses directly and such amounts will be deducted
from the fees to be paid to Morgan under these agreements. If such amounts are
more than the amount of Morgan's fees under the agreements, Morgan will reim-
burse the Fund or the Portfolio, as appropriate, for such excess amounts. Un-
der the Trust's Services Agreement, the following expenses are not included in
the expense undertaking: the services agent fee, organizational expenses and
extraordinary expenses as defined in this agreement. Under the Portfolio's
Services Agreement, the following expenses are not included in the expense un-
dertaking: the fees of Pierpont Group, Inc., custodian fees, advisory fees,
brokerage expenses, the services agent fee, organizational expenses and ex-
traordinary expenses as defined in this agreement.
The Trust's Services Agreement provides for the Fund to pay Morgan a fee for
these services, which is computed daily and may be paid monthly, at the annual
rate of 0.76% of the Fund's average daily net assets. The Portfolio's Services
Agreement provides for the Portfolio to pay Morgan a fee for these services,
which is computed daily and may be paid monthly, at the following annual rate
of the Portfolio's average daily net assets: 0.15% on net assets up to $200
million, 0.10% on the next $200 million in net assets, 0.05% on the next $200
million in net assets and 0.03% on net assets thereafter.
As noted above, the fee levels of the Fund and the Portfolio are expense un-
dertakings and reflect payments made directly to third parties by the Fund and
the Portfolio for services rendered, as well as payments to Morgan for serv-
ices rendered. For the Fund and the Portfolio, the Trustees regularly review
amounts paid to and accounted for by Morgan pursuant to these agreements. Un-
der the agreements, Morgan may delegate one or more of its responsibilities to
other entities, including SBDS, at Morgan's expense. See Expenses below.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02101, serves as the Fund's and the Portfolio's Custodian and
Transfer and Dividend Disbursing Agent.
EXPENSES. In addition to the expenses that Morgan assumes under the Services
Agreements, Morgan has agreed that it will reimburse the Fund through at least
October 31, 1995 to the extent necessary to maintain the Fund's total operat-
ing expenses (which includes expenses of the Fund and the Portfolio) at the
annual rate of 1.65% of the Fund's average daily net assets. This limit on
certain expenses does not cover extraordinary increases in these expenses dur-
ing the period and no longer applies in the event of a precipitous decline in
assets due to unforeseen circumstances. There is no assurance that Morgan will
continue this waiver beyond the specified period, except as required by the
following sentence. Morgan has agreed to waive fees as necessary, if in any
fiscal year the sum of the Fund's expenses exceeds the limits set by applica-
ble regulations of state securities commissions. Such annual limits are cur-
rently 2.5% of the first $30 million of average net assets, 2% of the next $70
million of such net assets and 1.5% of such net assets in excess of $100 mil-
lion for any fiscal year.
SHAREHOLDER TRANSACTIONS
Investors may request either Morgan or their Eligible Institution, as defined
below, for assistance in placing orders to purchase, redeem or exchange shares
of the Fund.
Shareholders should address all inquiries to J.P. Morgan Funds Services, Mor-
gan Guaranty Trust Company of New York, 522 Fifth Avenue, New York, New York
10036 or call (800) JPM-3637.
The business days of the Fund and the Portfolio are the days the New York
Stock Exchange is open.
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PURCHASE OF SHARES
METHOD OF PURCHASE. Investors may open accounts with the Fund only through the
Distributor. All purchase transactions in Fund accounts are processed by Mor-
gan as Services Agent and the Fund is authorized to accept any instructions
relating to a Fund account from Morgan as agent for the customer. All purchase
orders must be accepted by the Fund's Distributor. Investors must be customers
of Morgan or an eligible institution which is a customer of Morgan (an "Eligi-
ble Institution"). Investors may also be employer-sponsored retirement plans
that have designated the Fund as an investment option for the plans. Prospec-
tive investors who are not already customers of Morgan may apply to become
customers of Morgan for the sole purpose of Fund transactions. There are no
charges associated with becoming a Morgan customer for this purpose. Morgan
reserves the right to determine the customers that it will accept, and the
Fund reserves the right to determine the purchase orders that it will accept.
The Fund requires a minimum initial investment of $5,000.
PURCHASE PRICE AND SETTLEMENT. The Fund's shares are sold on a continuous ba-
sis without a sales charge at the net asset value per share next determined
after receipt of an order. Prospective investors may purchase shares with the
assistance of an Eligible Institution that may establish its own terms, condi-
tions and charges.
To purchase shares in the Fund, investors should request their Morgan repre-
sentative (or a representative of their Eligible Institution) to assist them
in placing a purchase order with the Fund's Distributor and to transfer imme-
diately available funds to the Fund's Distributor on the next business day. If
the Fund receives a purchase order prior to 4:00 P.M. New York time on any
business day, the purchase of Fund shares is effective and is made at the net
asset value determined that day, and the purchaser generally becomes a holder
of record on the next business day upon the Fund's receipt of payment. If the
Fund receives a purchase order after 4:00 P.M. New York time, the purchase is
effective and is made at the net asset value determined on the next business
day, and the purchaser becomes a holder of record on the following business
day upon the Fund's receipt of payment.
ELIGIBLE INSTITUTIONS. The services provided by Eligible Institutions may in-
clude establishing and maintaining shareholder accounts, processing purchase
and redemption transactions, arranging for bank wires, performing shareholder
sub- accounting, answering client inquiries regarding the Trust, assisting
clients in changing dividend options, account designations and addresses, pro-
viding periodic statements showing the client's account balance and integrat-
ing these statements with those of other transactions and balances in the cli-
ent's other accounts serviced by the Eligible Institution, transmitting proxy
statements, periodic reports, updated prospectuses and other communications to
shareholders and, with respect to meetings of shareholders, collecting, tabu-
lating and forwarding executed proxies and obtaining such other information
and performing such other services as Morgan or the Eligible Institution's
clients may reasonably request and agree upon with the Eligible Institution.
Eligible Institutions may separately establish their own terms, conditions and
charges for providing the aforementioned services and for providing other
services.
REDEMPTION OF SHARES
METHOD OF REDEMPTION. To redeem shares in the Fund, an investor may instruct
Morgan or his or her Eligible Institution, as appropriate, to submit a redemp-
tion request to the Fund. The Fund executes effective redemption requests at
the next determined net asset value per share. See Net Asset Value. See Addi-
tional Information below for an explanation of the telephone redemption policy
of The JPM Advisor Funds.
A redemption request received by the Fund prior to 4:00 P.M. New York time is
effective on that day. A redemption request received after that time becomes
effective on the next business day. Proceeds of an effective redemption are
generally deposited the next business day in immediately available funds to
the shareholder's account at Morgan or at his
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<PAGE>
or her Eligible Institution or, in the case of certain Morgan customers, are
mailed by check or wire transferred in accordance with the customer's instruc-
tions and, subject to Further Redemption Information below, in any event are
paid within seven days.
FURTHER REDEMPTION INFORMATION. Investors should be aware that redemptions from
the Fund may not be processed if a redemption request is not submitted in
proper form. To be in proper form, the Fund must have received the sharehold-
er's taxpayer identification number and address. As discussed under Taxes be-
low, the Fund may be required to impose "back-up" withholding of federal income
tax on dividends, distributions and redemption proceeds when noncorporate in-
vestors have not provided a certified taxpayer identification number. In addi-
tion, if a shareholder sends a check for the purchase of Fund shares and shares
are purchased before the check has cleared, the transmittal of redemption pro-
ceeds from the shares will occur upon clearance of the check which may take up
to 15 days.
The Fund reserves the right to suspend the right of redemption and to postpone
the date of payment upon redemption for up to seven days and for such other pe-
riods as the 1940 Act or the Securities and Exchange Commission may permit. See
Redemption of Shares in the Statement of Additional Information.
EXCHANGE OF SHARES
An investor may exchange shares from the Fund into any other JPM Advisor Fund
without charge. Shares are exchanged on the basis of relative net asset value
per share. Exchanges are in effect redemptions from one fund and purchases of
another fund and the usual purchase and redemption procedures and requirements
are applicable to exchanges. See Purchase of Shares and Redemption of Shares in
this Prospectus and in the prospectuses for the other JPM Advisor Funds. See
also Additional Information below for an explanation of the telephone exchange
policy of The JPM Advisor Funds.
Shareholders subject to federal income tax who exchange shares in one fund for
shares in another fund may recognize capital gain or loss for federal income
tax purposes. The Fund reserves the right to discontinue, alter or limit its
exchange privilege at any time. For investors in certain states, state securi-
ties laws may restrict the availability of the exchange privilege.
DIVIDENDS AND DISTRIBUTIONS
Dividends consisting of substantially all of the Fund's net investment income
if any, are declared and paid annually. The Fund may also declare an additional
dividend of net investment income in a given year to the extent necessary to
avoid the imposition of federal excise tax on the Fund.
Substantially all the realized net capital gains, if any, of the Fund are de-
clared and paid on an annual basis, except that an additional capital gains
distribution may be made in a given year to the extent necessary to avoid the
imposition of federal excise tax on the Fund. Declared dividends and distribu-
tions are payable to shareholders of record on the record date.
Dividends and capital gains distributions paid by the Fund are automatically
reinvested in additional shares of the Fund unless the shareholder has elected
to have them paid in cash. Dividends and distributions to be paid in cash are
credited to the shareholder's account at Morgan or at his Eligible Institution
or, in the case of certain Morgan customers, are mailed by check in accordance
with the customer's instructions. The Fund reserves the right to discontinue,
alter or limit the automatic reinvestment privilege at any time.
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NET ASSET VALUE
Net asset value per share for the Fund is determined by subtracting from the
value of the Fund's total assets (i.e., the value of its investment in the
Portfolio and other assets) the amount of its liabilities and dividing the re-
mainder by the number of its outstanding shares, rounded to the nearest cent.
Expenses, including the fees payable to Morgan, are accrued daily. See Net As-
set Value in the Statement of Additional Information for information on valua-
tion of portfolio securities for the Portfolio.
The Fund computes its net asset value once daily at 4:15 P.M. New York time on
Monday through Friday, except that the net asset value is not computed for the
Fund on a day in which no orders to purchase or redeem Fund shares have been
received or on the holidays listed under Net Asset Value in the Statement of
Additional Information.
ORGANIZATION
The Trust was organized on September 16, 1994 as an unincorporated business
trust under Massachusetts law and is an entity commonly known as a "Massachu-
setts business trust". The Declaration of Trust permits the Trustees to issue
an unlimited number of full and fractional shares ($0.001 par value) of one or
more series. To date, nine series of shares have been authorized and are avail-
able for sale to the public. Only shares of the Fund are offered through this
Prospectus. No series of shares has any preference over any other series of
shares. See Massachusetts Trust in the Statement of Additional Information.
The Declaration of Trust for the Trust provides that no Trustee, shareholder,
officer, employee, or agent of the Fund shall be held to any personal liabili-
ty, nor shall resort be had to their private property for the satisfaction of
any obligation or claim or otherwise in connection with the affairs of the
Fund, but that the Trust property only shall be liable.
Shareholders of the Fund are entitled to one vote for each share and to the ap-
propriate fractional vote for each fractional share. There is no cumulative
voting. Shares have no preemptive or conversion rights. Shares are fully paid
and non- assessable by the Fund. The Trust has adopted a policy of not issuing
share certificates. The Trust does not intend to hold meetings of shareholders
annually. The Trustees may call meetings of shareholders for action by share-
holder vote as may be required by either the 1940 Act or the Declaration of
Trust. The Trustees will call a meeting of shareholders to vote on removal of a
Trustee upon the written request of the record holders of ten percent of Trust
shares and will assist shareholders in communicating with each other as pre-
scribed in Section 16(c) of the 1940 Act. For further organization information,
including certain shareholder rights, see Description of Shares in the State-
ment of Additional Information.
The Portfolio, in which all the assets of the Fund are invested, is organized
as a trust under the laws of the State of New York. The Portfolio's Declaration
of Trust provides that the Fund and other entities investing in the Portfolio
(e.g., other investment companies, insurance company separate accounts and com-
mon and commingled trust funds) will each be liable for all obligations of the
Portfolio. However, the risk of the Fund incurring financial loss on account of
such liability is limited to circumstances in which both inadequate insurance
existed and the Portfolio itself was unable to meet its obligations. According-
ly, the Trustees of the Trust believe that neither the Fund nor its sharehold-
ers will be adversely affected by reason of the Fund's investing in the Portfo-
lio.
TAXES
The following discussion of tax consequences is based on U.S. federal tax laws
in effect on the date of this Prospectus. These laws and regulations are sub-
ject to change by legislative or administrative action. Investors are urged to
consult their own tax advisors with respect to specific questions as to federal
taxes and with respect to the applicability of state or local taxes. See Taxes
in the Statement of Additional Information. Annual statements as to the current
federal tax status of distributions, if applicable, are mailed to shareholders
after the end of the taxable year for the Fund.
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<PAGE>
The Trust intends to qualify the Fund as a separate regulated investment com-
pany under Subchapter M of the Code. For the Fund to qualify as a regulated in-
vestment company, the Portfolio limits its investments so that at the close of
each quarter of its taxable year (a) no more than 25% of its total assets are
invested in the securities of any one issuer, except U.S. Government securi-
ties, and (b) with regard to 50% of its total assets, no more than 5% of its
total assets are invested in the securities of a single issuer, except U.S.
Government securities. As a regulated investment company, the Fund should not
be subject to federal income taxes or federal excise taxes if all of its net
investment income and capital gains less any available capital loss
carryforwards are distributed to shareholders within allowable time limits. The
Portfolio intends to qualify as an association treated as a partnership for
federal income tax purposes. As such, the Portfolio should not be subject to
tax. The Fund's status as a regulated investment company is dependent on, among
other things, the Portfolio's continued qualification as a partnership for fed-
eral income tax purposes.
If a correct and certified taxpayer identification number is not on file, the
Fund is required, subject to certain exemptions, to withhold 31% of certain
payments made or distributions declared to noncorporate shareholders.
Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses are taxable as ordinary income
to shareholders of the Fund whether such distributions are taken in cash or re-
invested in additional shares. Distributions of this type to corporate share-
holders of the Fund will not qualify for the dividends- received deduction be-
cause the income of the Fund will not consist of dividends paid by U.S. corpo-
rations.
Distributions of net long-term capital gains in excess of net short-term capi-
tal losses are taxable to shareholders of the Fund as long-term capital gains
regardless of how long a shareholder has held shares in the Fund and regardless
of whether taken in cash or reinvested in additional shares. Long-term capital
gains distributions to corporate shareholders are not eligible for the divi-
dends-received deduction.
Any distribution of net investment income or capital gains will have the effect
of reducing the net asset value of Fund shares held by a shareholder by the
same amount as the distribution. If the net asset value of the shares is re-
duced below a shareholder's cost as a result of such a distribution, the dis-
tribution, although constituting a return of capital to the shareholder, will
be taxable as described above.
Any gain or loss realized on the redemption or exchange of Fund shares by a
shareholder who is not a dealer in securities will be treated as long-term cap-
ital gain or loss if the shares have been held for more than one year, and oth-
erwise as short-term capital gain or loss. However, any loss realized by a
shareholder upon the redemption or exchange of shares in the Fund held for six
months or less will be treated as a long-term capital loss to the extent of any
long-term capital gain distributions received by the shareholder with respect
to such shares.
The Fund is subject to foreign withholding taxes with respect to income re-
ceived from sources within certain foreign countries. So long as more than 50%
of the value of the Fund's total assets at the close of any taxable year con-
sists of stock or securities of foreign corporations, the Fund may elect to
treat any such foreign income taxes paid by it as paid directly by its share-
holders. The Fund will make such an election only if it deems it to be in the
best interests of its shareholders and will notify shareholders in writing each
year if it makes the election and of the amount of foreign income taxes and
gross income derived from sources within any foreign country or possession of
the United States, if any, to be treated as paid by the shareholders. If the
Fund makes the election, each shareholder will be required to include in income
his proportionate share of the amount of foreign income taxes paid by the Fund
and will be entitled to claim either a credit (which is subject to certain lim-
itations) or, if the shareholder itemizes deductions, a deduction for his share
of the foreign income taxes in computing his federal income tax liability. (No
deduction will be permitted to individuals in computing their alternative mini-
mum tax liability.)
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<PAGE>
ADDITIONAL INFORMATION
The Fund sends to its shareholders annual and semi-annual reports. The finan-
cial statements appearing in annual reports are audited by independent accoun-
tants. Shareholders also will be sent confirmations of each purchase and re-
demption and monthly statements, reflecting all other account activity, in-
cluding dividends and any distributions reinvested in additional shares or
credited as cash.
All shareholders are given the privilege to initiate transactions automati-
cally by telephone upon opening an account. However, an investor should be
aware that a transaction authorized by telephone and reasonably believed to be
genuine by the Fund, Morgan, his or her Eligible Institution or the Distribu-
tor may subject the investor to risk of loss if such instruction is subse-
quently found not to be genuine. The Fund will employ reasonable procedures,
including requiring investors to give their Personal Identification Number and
tape recording of telephone instructions, to confirm that instructions commu-
nicated from investors by telephone are genuine; if it does not, it, the Serv-
ices Agent or a shareholder's Eligible Institution may be liable for any
losses due to unauthorized or fraudulent instructions.
The Fund may make historical performance information available and may compare
its performance to other investments or relevant indexes, including data from
Lipper Analytical Services, Inc., Micropal Inc., Morningstar Inc., Ibbotson
Associates, Standard & Poor's 500 Composite Stock Price Index, the Dow Jones
Industrial Average, the Frank Russell Indexes, the Morgan Stanley Europe, Aus-
tralia and Far East Index, the Financial Times World Stock Index and other in-
dustry publications.
The Fund may advertise "total return" and non-standardized total return data.
The total return shows what an investment in the Fund would have earned over a
specified period of time (one, five or ten years or since commencement of op-
erations, if less) assuming that all distributions and dividends by the Fund
were reinvested on the reinvestment dates during the period and less all re-
curring fees. This method of calculating total return is required by regula-
tions of the Securities and Exchange Commission. Total return data similarly
calculated, unless otherwise indicated, over other specified periods of time
may also be used. See Performance Data in the Statement of Additional Informa-
tion. All performance figures are based on historical earnings and are not in-
tended to indicate future performance. Performance information may be obtained
by calling The Fund's Distributor at (800) 847-9487.
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<PAGE>
APPENDIX
The Portfolio may (a) purchase exchange traded and over-the-counter put and
call options on equity securities or indexes of equity securities, (b) purchase
and sell futures contracts on indexes of equity securities and (c) purchase put
and call options on futures contracts on indexes of equity securities. Each of
these instruments is a derivative instrument, as its value derives from the un-
derlying asset or index.
The Portfolio may use futures contracts and options for hedging purposes. The
Portfolio may not use futures contracts and options for speculation.
OPTIONS
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio ob-
tains 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 al-
lowing it to expire or by exercising the option. The Portfolio may also close
out a put option position by entering into an offsetting transaction, if a liq-
uid 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 secu-
rity, 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 of 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 in-
strument underlying the option does not fall enough to offset the cost of pur-
chasing 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 in-
creases 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.
OPTIONS ON INDEXES. The Portfolio may purchase put and call options on any se-
curities index based on securities in which the Portfolio may invest. Options
on securities indexes are similar to options on securities, except that the ex-
ercise of securities index options is settled by cash payment and does not in-
volve 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 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 over-the-counter option, it will be rely-
ing on its counterparty to perform its obligations, and the Portfolio may incur
additional losses if the counterparty is unable to perform.
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FUTURES CONTRACTS
When the Portfolio purchases a futures contract, it agrees to purchase a speci-
fied 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 under-
lying 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 con-
tract 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 under-
lying instrument, much as if it had purchased the underlying instrument direct-
ly. 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 off-
set both positive and negative market price changes, much as if the underlying
instrument had 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 Portfolios'
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 the FCM's other
customers, potentially resulting in losses to the Portfolio.
The Portfolio will segregate liquid, high quality 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.
For further information about the Portfolios' 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-2
<PAGE>
THE JPM ADVISOR FUNDS
The JPM Advisor U.S. Fixed Income Fund
The JPM Advisor International Fixed Income Fund
The JPM Advisor U.S. Equity Fund
The JPM Advisor U.S. Small Cap Equity Fund
The JPM Advisor International Equity Fund
The JPM Advisor European Equity Fund
The JPM Advisor Asia Growth Fund
The JPM Advisor Japan Equity Fund
The JPM Advisor Emerging Markets Equity Fund
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 jurisdiction.
ADVPROS405
The JPM Advisor International Equity Fund
PROSPECTUS
August 28, 1995
