-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ck6YQRiIAajH9NfGUpXfTbXhFIYqm23I7+ABpGFef2ghugaCV7QTjQoICa3aG+8n 05kdYjYQSIeTBieaALnE0w== 0000912057-01-515916.txt : 20010516 0000912057-01-515916.hdr.sgml : 20010516 ACCESSION NUMBER: 0000912057-01-515916 CONFORMED SUBMISSION TYPE: N-14/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUTUAL FUND TRUST CENTRAL INDEX KEY: 0000919034 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-14/A SEC ACT: SEC FILE NUMBER: 333-59040 FILM NUMBER: 1637492 BUSINESS ADDRESS: STREET 1: 1 CHASE MANHATTAN PLAZA STREET 2: 3RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10081 MAIL ADDRESS: STREET 1: ONE CHASE SQUARE 7TH FLOOR CITY: ROCHESTER STATE: NY ZIP: 14643 N-14/A 1 a2047272zn-14a.txt N-14A As filed with the Securities and Exchange Commission on May 15, 2001 Registration No. 333-59040/811-8358 ================================================================================ U.S. Securities and Exchange Commission Washington, DC 20549 FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. 1 Post-Effective Amendment No. __ (Check appropriate box or boxes) Exact Name of Registrant as Specified in Charter: MUTUAL FUND TRUST Area Code and Telephone Number: (212) 492-1600 Address of Principal Executive Offices: 522 Fifth Avenue New York, NY 10036 Name and Address of Agent for Service: Lisa Hurley c/o BISYS Fund Services, Inc. 3435 Stelzer Road Columbus, Ohio 43219 Copies to: JOSEPH J. BERTINI, ESQ. SARAH E. COGAN, ESQ. JOHN E. BAUMGARDNER, PETER B. ELDRIDGE, ESQ. Simpson Thacher & Bartlett JR., ESQ. c/o J.P. Morgan Fleming Asset 425 Lexington Avenue Sullivan & Cromwell Management (USA) Inc. New York, NY 10017-3954 125 Broad Street 522 Fifth Avenue New York, NY 10004 New York, NY 10036 ================================================================================ Approximate Date of Proposed Public Offering: As soon as practicable after the Registration Statement becomes effective under the Securities Act of 1933. It is proposed that this filing will become effective on May 16, 2001 pursuant to Rule 488 under the Securities Act of 1933. Calculation of Registration Fee under the Securities Act of 1933: No filing fee is required because an indefinite number of shares have previously been registered on Form N-1A (Registration No. 033-75250/811-8358) pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended. The Registrant's Form 24f-2 for the fiscal year ended August 31, 2000 was filed on November 27, 2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid Registration Statement on Form N-1A. J.P. MORGAN PRIME CASH MANAGEMENT FUND A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS 522 FIFTH AVENUE NEW YORK, NY 10036 1-800-766-7722 May 16, 2001 Dear Shareholder: A special meeting of the shareholders of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), will be held on July 3, 2001 at 9:00 a.m., Eastern time. Formal notice of the meeting appears after this letter, followed by materials regarding the meeting. As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate parent of the investment adviser of the Merging Fund's assets, recently completed a merger with The Chase Manhattan Corporation to form J.P. Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its investment management business and funds advised by its subsidiaries. At the special meeting (the "Meeting"), shareholders will be asked to consider and vote upon the proposed reorganization of the Merging Fund into JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust ("MFT") (the "Reorganization"). After the Reorganization, shareholders will hold an interest in the Surviving Fund. The investment objective and policies of the Merging Fund generally are similar to those of the Surviving Fund. In connection with the Reorganization, the Surviving Fund will be renamed "JPMorgan Prime Money Market Fund." After the proposed Reorganization, your investment will be in a larger combined fund with similar investment policies. The Surviving Fund has also entered into agreements and plans of reorganization with other money market funds whose assets are managed by J.P. Morgan Investment Management Inc. ("JPMIM") and which have identical investment objectives and policies to the Merging Fund (collectively, the "Concurrent Reorganization"). If the Concurrent Reorganization is approved by the shareholders of these other funds and certain other conditions are met, these funds will be reorganized into the Surviving Fund. The consummation of the Reorganization is contingent upon the simultaneous consummation of the Concurrent Reorganization. At the Meeting, you will also be asked to consider and vote upon the election of Trustees of JPMIF. The investment adviser for the assets of the Merging Fund is JPMIM. The investment adviser for the Surviving Fund is JPMorgan Fleming Asset Management (USA) Inc. ("JPMFAM"). After the Reorganization, JPMFAM the same investment adviser that currently is responsible for the Surviving Fund, will make the day-to-day investment decisions for your portfolio. Please see the enclosed Combined Prospectus/Proxy Statement for detailed information regarding the proposed Reorganization, the Concurrent Reorganization and a comparison of the Merging Fund and JPMIF to the Surviving Fund and MFT. The cost and expenses associated with the Reorganization, including costs of soliciting proxies, will be borne by JPMC and not by the Merging Fund, JPMIF, the Surviving Fund, MFT or their shareholders. If approval of the Reorganization is obtained, you will automatically receive shares in the Surviving Fund. The Proposals have been carefully reviewed by the Board of Trustees of JPMIF, which has approved the Proposals. THE BOARD OF TRUSTEES OF JPMIF UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS. Following this letter is a list of commonly asked questions. If you have any additional questions on voting of proxies and/or the meeting agenda, please call us at 1-800-766-7722. A proxy card is enclosed for your use in the shareholder meeting. This card represents shares you held as of the record date, April 6, 2001. IT IS IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE PROVIDED OR CALL THE NUMBER PROVIDED ON THE PROXY CARD AS SOON AS POSSIBLE. This will ensure that your shares will be represented at the Meeting to be held on July 3, 2001. Please read the enclosed materials carefully. You may, of course, attend the meeting in person if you wish, in which case the proxy can be revoked by you at the Meeting. Sincerely, /s/ Matthew Healey Matthew Healey Chairman SPECIAL NOTE: You may receive a telephone call from our proxy solicitor, D.F. King & Co., Inc., or us to answer any questions you may have or to provide assistance in voting. Remember, your vote is important! Please sign, date and promptly mail your proxy card(s) in the return envelope provided or call the number provided on the proxy card in order to vote. WHY IS THE REORGANIZATION BEING PROPOSED? The Reorganization is being proposed because each Fund's board believes it is in the best interests of its shareholders. IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN? Under the Reorganization, the Merging Fund will cease investing in The Prime Money Market Portfolio (the "Master Portfolio" in which it currently invests), will transfer all of its assets and liabilities to the Surviving Fund and will receive, in exchange, shares of the Surviving Fund. The Merging Fund will then be liquidated and those shares of the Surviving Fund will be distributed to shareholders. After the Reorganization, you will own shares in the Surviving Fund rather than the Merging Fund. The Surviving Fund invests directly in portfolio securities rather than in a master portfolio. WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED? The Surviving Fund generally has similar investment objectives and policies to those of the Merging Fund. The principal difference is as follows:
SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- - - The Surviving Fund's investment objective - The Merging Fund's investment objective is is to aim to provide the highest income to maximize current income consistent with possible level of current income while the preservation of capital and same-day still maintaining liquidity and preserving liquidity. capital.
The Reorganization is not intended to have any immediate significant impact on the investment strategy implemented in respect of your investment. However, please note that while the Merging Fund invests all of its assets in the Master Portfolio (which in turn invests in portfolio securities), the Surviving Fund invests directly in portfolio securities. HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED? As a result of the Reorganization, the contractual (or pre-waiver) and actual (or post-waiver) total expense ratios are expected to be the same or less for your shares in the Surviving Fund than they are for your shares in the Merging Fund. If an increase does occur, The Chase Manhattan Bank, the Surviving Fund's administrator, has contractually agreed to waive fees payable to it and reimburse expenses so that the actual total operating expense will remain the same for at least three years after the Reorganization. WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT? Yes, JPMFAM, the investment adviser that currently manages the day-to-day investment activities of the Surviving Fund, will continue to manage that fund after the Reorganization. WHO WILL PAY FOR THE REORGANIZATION? The cost and expenses associated with the Reorganization, including costs of soliciting proxies, will be borne by JPMC and not by either the Merging Fund or the Surviving Fund (or shareholders of either fund). WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE REORGANIZATION IS OBTAINED? You will automatically receive shares in the Surviving Fund. HOW WILL THE PROPOSED CONCURRENT REORGANIZATION AFFECT MY INVESTMENT IF IT IS APPROVED BY THE SHAREHOLDERS OF THE OTHER FUNDS? If the Concurrent Reorganization is approved and certain other conditions are met, the assets and liabilities of the other merging funds will become the assets and liabilities of the Surviving Fund. The consummation of the Reorganization is contingent upon the simultaneous consummation of the Concurrent Reorganization. WHY AM I BEING ASKED TO VOTE ON THE ELECTION OF TRUSTEES FOR JPMIF IF AFTER THE REORGANIZATION I WILL OWN SHARES IN THE SURVIVING FUND, A SERIES OF MFT? Even if the Reorganization is approved, other mutual funds that are series of JPMIF will continue to exist and operate. All shareholders of any series of JPMIF as of the record date (April 6, 2001) are required to be given a vote on the proposal regarding Trustees. Because as of the record date you were still a shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of MFT are being asked to approve the same Trustees. AS A HOLDER OF SHARES OF THE MERGING FUND, WHAT DO I NEED TO DO? Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your vote is important! Accordingly, please sign, date and mail the proxy card(s) promptly in the enclosed return envelope as soon as possible after reviewing the enclosed Combined Prospectus/Proxy Statement. MAY I ATTEND THE MEETING IN PERSON? Yes, you may attend the Meeting in person. If you complete a proxy card and subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure that your vote is counted, we strongly urge you to mail us your signed, dated and completed proxy card(s) even if you plan to attend the Meeting. J.P. MORGAN PRIME CASH MANAGEMENT FUND, A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS 522 FIFTH AVENUE NEW YORK, NY 10036 1-800-766-7722 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 3, 2001 To the Shareholders of J.P. Morgan Prime Cash Management Fund: NOTICE IS HEREBY GIVEN THAT a Special Meeting (the "Meeting") of the shareholders ("Shareholders") of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, N.Y., on July 3, 2001 at 9:00 a.m. (Eastern time), for the following purposes: ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan of Reorganization (the "Reorganization Plan") by and among JPMIF, on behalf of the Merging Fund, Mutual Fund Trust ("MFT"), on behalf of JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving Fund"), and J.P. Morgan Chase & Co. and the transactions contemplated thereby, including (a) the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for Cash Management Class shares of the Surviving Fund (the "Surviving Fund Shares"); and (b) the distribution of such Surviving Fund Shares to the Shareholders of the Merging Fund in connection with the liquidation of the Merging Fund. ITEM 2. To elect eight Trustees to serve as members of the Board of Trustees of JPMIF. ITEM 3. To transact such other business as may properly come before the Meeting or any adjournment(s) thereof. YOUR FUND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEMS 1 AND 2. Each proposal is described in the attached Combined Prospectus/Proxy Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is a copy of the Reorganization Plan. The Meeting will be a joint meeting with the meetings of shareholders of all series of JPMIF, which meetings are being called for purposes of considering proposals 1 and 2 above and certain other proposals not applicable to you. Shareholders of record as of the close of business on April 6, 2001 are entitled to notice of, and to vote at, the Special Meeting or any adjournment(s) thereof. SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF JPMIF. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO THE MERGING FUND A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON. /s/ Sharon Weinberg SHARON WEINBERG SECRETARY May 16, 2001 COMBINED PROSPECTUS/PROXY STATEMENT DATED MAY 16, 2001 ACQUISITION OF THE ASSETS AND LIABILITIES OF J.P. MORGAN PRIME CASH MANAGEMENT FUND, A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS 522 FIFTH AVENUE NEW YORK, NY 10036 1-800-766-7722 BY AND IN EXCHANGE FOR CASH MANAGEMENT CLASS SHARES OF JPMORGAN PRIME MONEY MARKET FUND II (FORMERLY, CHASE VISTA PRIME MONEY MARKET FUND), A SERIES OF MUTUAL FUND TRUST 522 FIFTH AVENUE NEW YORK, NY 10036 1-800-348-4782 This Combined Prospectus/Proxy Statement relates to the proposed reorganization of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), into JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Surviving Fund"), a series of Mutual Fund Trust ("MFT"). If approved by shareholders of the Merging Fund, the proposed reorganization will be effected by transferring all of the assets and liabilities of the Merging Fund to the Surviving Fund, which has generally similar investment objectives and policies to those of the Merging Fund, in exchange for shares of the Surviving Fund (the "Reorganization"). Therefore, as a result of the proposed Reorganization, current shareholders of the Merging Fund (the "Merging Fund Shareholders") will become shareholders of the Surviving Fund ("Surviving Fund Shareholders"). JPMIF and MFT are both open-end management investment companies offering shares in several portfolios. In connection with the Reorganization, the Surviving Fund will be renamed "JPMorgan Prime Money Market Fund." Under the proposed Reorganization, each Merging Fund Shareholder will receive Cash Management Class shares (the "Surviving Fund Shares") of the Surviving Fund with a value equal to such Merging Fund Shareholder's holdings in the Merging Fund. The Surviving Fund currently has six classes of shares: the Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C shares. In connection with the Reorganization and the Concurrent Reorganization (defined below), the Surviving Fund will introduce the Cash Management Class, Select Class, a new Reserve Class and a new Institutional Class, will re-name the Vista Class "Morgan Class", the Institutional Class "Agency Class". At the Meeting, you also will be asked to consider and vote upon the election of Trustees of JPMIF. The terms and conditions of these transactions are more fully described in this Combined Prospectus/ Proxy Statement and in the Agreement and Plan of Reorganization (the "Reorganization Plan") between JPMIF, on behalf of the Merging Fund, and MFT, on behalf of the Surviving Fund, attached to this Combined Prospectus/Proxy Statement as Appendix A. The Board of Trustees for JPMIF is soliciting proxies in connection with a Special Meeting (the "Meeting") of Shareholders to be held on July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, N.Y., at which meeting shareholders in the Merging Fund will be asked to consider and approve the proposed Reorganization Plan, certain transactions contemplated by the Reorganization Plan and certain other proposals. This Combined Prospectus/Proxy Statement constitutes the proxy statement of the Merging Fund for the meeting of its Shareholders and also constitutes MFT's prospectus for Surviving Fund Shares that have been registered with the Securities and Exchange Commission (the "Commission") and are to be issued in connection with the Reorganization. This Combined Prospectus/Proxy Statement, which should be retained for future reference, sets forth concisely the information about MFT and JPMIF that an investor should know before voting on the proposals. The current Prospectus, Statement of Additional Information and Annual Report for the Merging Fund (including the Annual Report of The Prime Money Market Portfolio) and the preliminary Prospectus and Statement of Additional Information and the current Annual Report and Semi-Annual Report of the Surviving Fund are incorporated herein by reference, and the preliminary Prospectus and current Annual Report and Semi-Annual Report for the Surviving Fund are enclosed with this Combined Prospectus/Proxy Statement. A Statement of Additional Information relating to this Combined Prospectus/Proxy Statement dated May 16, 2001 containing additional information about MFT and JPMIF has been filed with the Commission and is incorporated by reference into this Combined Prospectus/Proxy Statement. A copy of the Statement of Additional Information, as well as the Prospectus, Statement of Additional Information and Annual Report of the Merging Fund (including the Annual Report of The Prime Money Market Portfolio), may be obtained without charge by writing to JPMIF at its address noted above or by calling 1-800-766-7722. This Combined Prospectus/Proxy Statement is expected to first be sent to shareholders on or about May 16, 2001. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY MFT OR JPMIF. INVESTMENTS IN THE SURVIVING FUND ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN THE SURVIVING FUND ARE BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. TABLE OF CONTENTS
Page ----- INTRODUCTION...................................... 1 PROPOSAL 1: REORGANIZATION PLAN................... 1 SUMMARY........................................... 1 COMPARATIVE FEE AND EXPENSE TABLES................ 4 RISK FACTORS...................................... 5 INFORMATION RELATING TO THE PROPOSED REORGANIZATION................................... 6 INVESTMENT POLICIES............................... 9 PURCHASES, REDEMPTIONS AND EXCHANGES.............. 14 DISTRIBUTIONS AND TAXES........................... 16 COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE.................... 16 INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES................................... 18 PROPOSAL 2: ELECTION OF TRUSTEES.................. 20 INFORMATION RELATING TO VOTING MATTERS............ 25 ADDITIONAL INFORMATION ABOUT MFT.................. 26 ADDITIONAL INFORMATION ABOUT JPMIF................ 27 FINANCIAL STATEMENTS AND EXPERTS.................. 27 OTHER BUSINESS.................................... 27 LITIGATION........................................ 27 SHAREHOLDER INQUIRIES............................. 27 APPENDIX A--AGREEMENT AND PLAN OF REORGANIZATION.................................. A-1
INTRODUCTION GENERAL This Combined Prospectus/Proxy Statement is being furnished to the shareholders of the Merging Fund, an open-end management investment company, in connection with the solicitation by the Board of Trustees of JPMIF of proxies to be used at a Special Meeting of Shareholders of the Merging Fund to be held on July 3, 2001 at 9:00 a.m., Eastern time, at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, N.Y. (together with any adjournments thereof, the "Meeting"). The Meeting will be a joint meeting with the meetings of shareholders of all series of JPMIF, which meetings are being called for purposes of considering proposals 1 and 2 above and certain other proposals not applicable to you. It is expected that the mailing of this Combined Prospectus/Proxy Statement will be made on or about May 16, 2001. PROPOSAL 1: REORGANIZATION PLAN As you may be aware, J.P. Morgan & Co. Incorporated, the former corporate parent of the investment adviser of the Merging Fund's assets, recently completed a merger with The Chase Manhattan Corporation to form J.P. Morgan Chase & Co. ("JPMC"). As a result of this merger, JPMC is seeking to reorganize parts of its investment management business and funds advised by its subsidiaries. At the Meeting, Merging Fund Shareholders will consider and vote upon the Agreement and Plan of Reorganization (the "Reorganization Plan") dated May 11, 2001 among JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund (the Merging Fund and the Surviving Fund are collectively defined as the "Funds"), and JPMC pursuant to which all of the assets and liabilities of the Merging Fund will be transferred to the Surviving Fund in exchange for Surviving Fund Shares. As a result of the Reorganization, Merging Fund Shareholders will become shareholders of the Surviving Fund and will receive Surviving Fund Shares equal in value to their holdings in the Merging Fund on the date of the Reorganization. Further information relating to the Surviving Fund is set forth herein, and the Surviving Fund's preliminary Prospectus, and current Annual Report and Semi-Annual Reports are enclosed with this Combined Prospectus/Proxy Statement. THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 1. VOTE REQUIRED Approval of the Reorganization Plan by the Merging Fund requires the affirmative vote of the lesser of (i) 67% or more of the voting shares of the Merging Fund present at the joint meeting if the holders of more than 50% of the outstanding voting shares of the Merging Fund are present or represented by proxy and (ii) more than 50% of all outstanding voting shares of the Merging Fund. If the Reorganization Plan is not approved by the Merging Fund Shareholders, the JPMIF Board will consider other appropriate courses of action. SUMMARY The following is a summary of certain information relating to the proposed Reorganization, the parties thereto and the transactions contemplated thereby, and is qualified by reference to the more complete information contained elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus, Statement of Additional Information, and Annual Report of the Merging Fund (including the Annual Report of the Prime Money Market Portfolio), the preliminary Prospectus and Statement of Additional Information and the current Annual and Semi-Annual Reports of the Surviving Fund and the Reorganization Plan attached to this Combined Prospectus/Proxy Statement as Appendix A. PROPOSED REORGANIZATION Pursuant to the proposed Reorganization Plan, the Merging Fund will transfer all of its assets and liabilities to the Surviving Fund in exchange for shares of the Surviving Fund. Under the proposed Reorganization, each Merging Fund Shareholder will receive a number of Cash Management Class shares of the Surviving Fund with an aggregate net asset value equal on the date of the exchange to the aggregate net asset value of such shareholder's Merging Fund Shares on such date. Therefore, following the proposed Reorganization, Merging Fund Shareholders will be Surviving Fund Shareholders. See "Information Relating to the Proposed Reorganization." 1 The Surviving Fund has investment objectives, policies and restrictions generally similar to the Merging Fund. Based upon their evaluation of the relevant information presented to them, including an analysis of the operation of the Surviving Fund both before and after the Reorganization, the terms of the Reorganization Plan, the opportunity to combine the two Funds with generally similar investment objectives and policies, and the fact that the Reorganization will be tax-free, and in light of their fiduciary duties under federal and state law, the MFT Board and the JPMIF Board, including a majority of each Board's members who are not "interested persons" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), have each determined that the proposed Reorganization is in the best interests of its respective Fund and its respective shareholders and that the interests of such shareholders will not be diluted as a result of such Reorganization. REASONS FOR THE REORGANIZATION The Reorganization is being proposed because each Fund's board believes it is in the best interests of its shareholders. CONCURRENT REORGANIZATION The Merging Fund currently invests all of its investable assets in The Prime Money Market Portfolio (the "Master Portfolio"), which has identical investment objectives and policies as the Merging Fund and which is advised by JPMorgan Investment Management Inc. ("JPMIM"). J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of JPMIF with identical investment objectives and policies as the Merging Fund and J.P. Morgan Prime Money Market Fund, a series of J.P. Morgan Funds with identical investment objectives and policies as the Merging Fund (collectively, the "Feeder Portfolios") also currently invest all of their assets in the Master Portfolio. The Surviving Fund has entered into substantially similar agreements and plans of reorganization with each Feeder Portfolio (collectively, the "Concurrent Reorganization"). If each of the Reorganization and the Concurrent Reorganization is approved by the shareholders of the Merging Fund and each Feeder Portfolio, respectively, and certain other conditions are met, the Merging Fund and the Feeder Portfolios will be reorganized into the Surviving Fund, and the Merging Fund and the Feeder Portfolios will no longer invest their assets in the Master Portfolio. The consummation of the Reorganization is contingent upon the simultaneous consummation of the Concurrent Reorganization. FEDERAL INCOME TAX CONSEQUENCES Simpson Thacher & Bartlett will issue an opinion (based on certain assumptions) as of the effective time of the Reorganization to the effect that the transaction will not give rise to the recognition of income, gain or loss for federal income tax purposes to the Merging Fund, the Surviving Fund or the shareholders of the Merging Fund. The holding period and tax basis of Surviving Fund Shares received by a shareholder of the Merging Fund will be the same as the holding period and tax basis of such shareholder's shares of the Merging Fund. In addition, the holding period and tax basis of those assets owned by the Merging Fund and transferred to the Surviving Fund will be identical for the Surviving Fund. See "Information Relating to the Proposed Reorganization--Federal Income Tax Consequences." INVESTMENT ADVISERS The investment adviser for the Master Portfolio (and therefore the assets of the Merging Fund and the Feeder Portfolios) is JPMIM. The investment adviser for the Surviving Fund is J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"). JPMFAM and JPMIM are each wholly-owned subsidiaries of JPMC. JPMFAM will continue to serve as investment adviser following the Reorganization. INVESTMENT OBJECTIVES AND POLICIES The Surviving Fund aims to provide the highest possible level of current income while still maintaining liquidity and preserving capital. The Merging Fund's goal is to maximize current income consistent with the preservation of capital and same-day liquidity. See "Risk Factors" and "Investment Restrictions." The investment policies of the Surviving Fund are generally similar to those of the Merging Fund, although the Surviving Fund invests its assets directly in portfolio securities, while the Merging Fund invests its assets in the Master Portfolio, which in turn invests in portfolio securities. The Surviving Fund invests in a wide range of high quality, short-term money market instruments that are issued and payable in U.S. dollars. The Surviving Fund principally invests in commercial paper and other short-term debt securities, debt securities issued or guaranteed by qualified banks, securities issued or guaranteed by the U.S. Government, 2 its agencies and authorities, asset-backed securities and repurchase agreements. LIKEWISE, THE MERGING FUND INVESTS ACROSS A BROAD SPECTRUM OF U.S. DOLLAR-DENOMINATED MONEY MARKET SECURITIES, INCLUDING OBLIGATIONS ISSUED BY THE U.S. TREASURY, GOVERNMENT AGENCIES, DOMESTIC AND FOREIGN BANKS AND CORPORATIONS AND FOREIGN GOVERNMENTS, REPURCHASE AGREEMENTS AND ASSET-BACKED SECURITIES. As AAA-rated Funds the dollar weighted average maturity of each of the Merging Fund and the Surviving Fund will be 60 days or less. There can be no assurance that the funds will continue to be rated by Standard & Poor's Ratings Service and/or Moody's Investors Service or that these agencies will not downgrade their current ratings. Each Fund seeks to maintain a net asset value of $1.00 per share. PRINCIPAL RISKS OF INVESTING IN THE SURVIVING FUND The principal risk factors associated with an investment in the Surviving Fund are those typically associated with investing in a managed portfolio of money market securities. The Surviving Fund attempts to keep its net asset value at $1.00, although there is no guarantee it will be able to do so. In general, the value of a money market investment tends to fall when prevailing interest rates rise, although it tends to be less sensitive to interest rate changes than the value of longer-term securities. Additionally, investments in the Surviving Fund may not earn as high a current income as longer-term or lower-quality securities. Any investments that the Surviving Fund makes in foreign banks and issuers carry additional risk with respect to liquidity and foreign instability and regulations. See "Risk Factors." CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS ADVISORY SERVICES The investment adviser for the Surviving Fund is JPMFAM. JPMFAM oversees the asset management of the Surviving Fund. As compensation for its services, JPMFAM receives a management fee from the Surviving Fund at an annual rate of 0.10% of average daily net assets. The Merging Fund currently pays a management fee at an annual rate of 0.20% of the first $1 billion of average daily net assets and 0.10% of average daily net assets for assets over $1 billion. Following the Reorganization, JPMFAM will continue to manage the Surviving Fund's assets and will receive a fee at an annual rate of 0.10% of average daily net assets. OTHER SERVICES J.P. Morgan Fund Distributors, Inc. (the "Distributor") is the distributor for the Surviving Fund. The Chase Manhattan Bank ("Chase") serves as shareholder servicing agent, administrator, fund accountant and custodian, an affiliate of the Distributor serves as sub-administrator and DST Systems, Inc. ("DST") serves as transfer agent and dividend disbursing agent for the Surviving Fund. It is anticipated that prior to the consummation of the Reorganization, The Bank of New York ("BONY") will become the Surviving Fund's fund accountant and custodian. PricewaterhouseCoopers LLP serves as the Surviving Fund's independent accountants. ADMINISTRATOR As of August 11, 2001, Chase will receive an administration fee from the Surviving Fund of 0.10% of average daily net assets for complex wide money market fund assets up to $100 billion and 0.05% on assets in excess of $100 billion (currently such assets are less than $100 billion). The Merging Fund pays Morgan, its administrator, a fee at an effective rate of 0.048% of its average daily net assets. ORGANIZATION Each of MFT and JPMIF is organized as a Massachusetts business trust. The Merging Fund is organized as a series of JPMIF, and the Surviving Fund is organized as a series of MFT. PURCHASES, REDEMPTIONS AND EXCHANGES After the Reorganization, the procedures for making purchases, redemptions and exchanges of shares of the Surviving Fund will be as described in this Combined Prospectus/Proxy Statement and in the Surviving Fund's Prospectus and Statement of Additional Information. 3 COMPARATIVE FEE AND EXPENSE TABLES The table below shows (i) information regarding the fees and expenses paid by the Merging Fund for the most recent fiscal year that reflect current expense reimbursement arrangements and (ii) estimated fees and expenses on a pro forma basis for the Surviving Fund after giving effect to the proposed Reorganization and the Concurrent Reorganization. Under the proposed Reorganization, holders of shares in the Merging Fund will receive Cash Management Class shares in the Surviving Fund. The Surviving Fund currently has six classes of shares (which will not be distributed to Merging Fund shareholders as a result of the Reorganization and, therefore, no information on these classes is shown in the table below): Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C. In connection with the Reorganization and Concurrent Reorganization, four additional classes, the Cash Management Class, Select Class, a new Institutional Class and a new Reserve Class will be introduced, the Vista Class will be renamed the "Morgan Class", the Institutional Class will be renamed "Agency Class," and the Reserve Class will merge into the Morgan Class. The table indicates that both contractual (pre-waiver) and actual (post-waiver) total expense ratios for current shareholders of the Merging Fund will be less or stay the same for at least three years following the Reorganization. In addition, Chase, the surviving Fund's Administrator, has contractually agreed to waive certain fees and/or reimburse certain expenses to ensure that actual total operating expenses do not increase for three years after the Reorganization after the Reorganization.
THE MERGING FUND ----------- SHARES* ----------- SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) Maximum Sales Charge (Load) when you buy shares, shown as % of the offering price None Maximum Deferred Sales Charge (Load) shown as lower of original purchase price or redemption proceeds None ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fees 0.11% Distribution (12b-1) Fees 0.50% Other Expenses (1) 0.47% Total Annual Fund Operating Expenses 1.08% Fee Waivers Reimbursements (2) 0.10% Net Expenses 0.98%
- --------------------- * The table is based on the expenses incurred in the most recent fiscal year. (1) Service organizations may charge other fees to their customers who are beneficial owners of shares in connection with their customer's account. Such fees, if any, may affect the return such customers realize with respect to their investments. (2) Reflects an agreement dated 5/17/00 by Morgan, an affiliate of JPMC, to reimburse the Merging Fund to the extent total operating expenses (which exclude interest, taxes and extraordinary expenses) exceed 0.98% of the Merging Fund's average daily net assets through 2/28/02.
4 The table does not reflect charges or credits which investors might incur if they invest through a financial institution.
THE SURVIVING FUND ---------------------------- PRO FORMA WITH CONCURRENT REORGANIZATION ---------------------------- CASH MANAGEMENT CLASS SHARES ---------------------------- SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) Maximum Sales Charge (Load) when you buy shares, shown as % of the offering price None Maximum Deferred Sales Charge (Load) shown as lower of original purchase price or redemption proceeds None ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) Management Fees 0.10% Distribution (12b-1) Fees 0.25% Other Expenses 0.66% ----------------- Total Annual Fund Operating Expenses 1.01% ================= Fee Waivers and Expense Reimbursements 0.04% ----------------- Net Expenses (1) 0.97% =================
- --------------------- (1) Reflects an agreement by Chase, an affiliate of JPMC, to reimburse the Surviving Fund to the extent operating expenses (excluding interest, taxes, extraordinary expenses and expenses related to the deferred compensation plan) exceed 0.97% of average daily net assets with respect to Cash Management Class Shares for three years after the Reorganization.
The table does not reflect charges or credits which investors might incur if they invest through a financial institution. EXAMPLE: This example helps investors compare the cost of investing in the Funds with the cost of investing in other mutual funds. The example assumes: - you invest $10,000; - you sell all of your shares at the end of each period; - your investment has a 5% return each year; and, - you pay net expenses for three years after the Reorganization and total annual operating expenses thereafter as indicated in the table above. Although actual costs may be higher or lower, based upon these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- THE MERGING FUND $100 $334 $ -- $ -- PRO FORMA THE SURVIVING FUND WITH CONCURRENT REORGANIZATION Cash Management Class $ 99 $309 $546 $1,225
RISK FACTORS The following discussion highlights the principal risk factors associated with an investment in the Surviving Fund. The Surviving Fund has investment policies and investment restrictions generally similar to those of the Merging Fund. Therefore, there should be similarities between the risk factors associated with the Surviving Fund and the Merging Fund. This discussion is qualified in its entirety by the more extensive discussion of risk factors set forth in the Prospectus and Statement of Additional Information of the Surviving Fund, which are incorporated herein by reference. The Surviving Fund attempts to keep its net asset value constant, but there is no guarantee it will be able to do so. Investments in the Surviving Fund are not bank deposits or obligations of, or guaranteed or 5 endorsed by, Chase or any of its affiliates and are not insured by the FDIC, the Federal Reserve Board or any other government agency. Although the Surviving Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Surviving Fund. The value of a money market investment tends to fall when prevailing interest rates rise, although it tends to be generally less sensitive to interest rate changes than the value of longer-term securities. Although the Surviving Fund seeks to be fully invested, it may at times hold some of its assets in cash, which could hurt the Fund's performance. Securities in the Surviving Fund's portfolio may not earn as high a current income as longer term or lower-quality securities. Repurchase agreements involve some risk of loss to the Surviving Fund if the other party does not live up to its obligations under the agreement. The Surviving Fund's ability to concentrate its investments in the banking industry could increase risks. The profitability of banks depends largely on the availability and cost of funds, which can change depending upon economic conditions. Banks are also exposed to losses if borrowers get into financial trouble and cannot repay their loans. Investments in foreign banks and other foreign issuers may be riskier than investments in the United States. That could be, in part, because of difficulty converting investments into cash, political and economic instability, the imposition of government controls, or regulations that do not match U.S. standards. INFORMATION RELATING TO THE PROPOSED REORGANIZATION GENERAL The terms and conditions under which the Reorganization may be consummated are set forth in the Reorganization Plan. Significant provisions of the Reorganization Plan are summarized below; however, this summary is qualified in its entirety by reference to the Reorganization Plan, a copy of which is attached as Appendix A to this Combined Prospectus/Proxy Statement and which is incorporated herein by reference. DESCRIPTION OF THE REORGANIZATION PLAN In connection with the Reorganization, the Merging Fund and the Feeder Portfolios will cease investing in the Master Portfolio. The Reorganization Plan provides that at the Effective Time (as defined in the Reorganization Plan) of the Reorganization, the assets and liabilities of the Merging Fund will be transferred to and assumed by the Surviving Fund. In exchange for the transfer of the assets and the assumption of the liabilities of the Merging Fund, MFT will issue at the Effective Time of the Reorganization full and fractional Cash Management Class shares of the Surviving Fund equal in aggregate dollar value to the aggregate net asset value of full and fractional outstanding shares of the Merging Fund as determined at the valuation time specified in the Reorganization Plan. The Reorganization Plan provides that the Merging Fund will declare a dividend or dividends prior to the Effective Time of the Reorganization which, together with all previous dividends, will have the effect of distributing to Merging Fund Shareholders all undistributed net investment income earned and net capital gain realized up to and including the Effective Time of the Reorganization. Following the transfer of assets to, and the assumption of the liabilities of the Merging Fund by, the Surviving Fund, the Merging Fund will distribute Surviving Fund Shares received by it to the Merging Fund Shareholders in liquidation of the Merging Fund. Each Merging Fund Shareholder at the Effective Time of the Reorganization will receive an amount of Cash Management Class shares with a total net asset value equal to the net asset value of their Merging Fund Shares plus the right to receive any dividends or distributions which were declared before the Effective Time of the Reorganization but that remained unpaid at that time with respect to the shares of the Merging Fund. The Surviving Fund expects to maintain most of the portfolio investments of the Merging Fund in light of the similar investment policies of the Merging Fund and the Surviving Fund. After the Reorganization, all of the issued and outstanding shares of the Merging Fund shall be canceled on the books of the Merging Fund and the stock transfer books of the Merging Fund will be permanently closed. The Reorganization is subject to a number of conditions, including without limitation: approval of the Reorganization Plan and the transactions contemplated thereby described in this Combined Prospectus/Proxy Statement by the Merging Fund Shareholders; the receipt of a legal opinion from Simpson Thacher & Bartlett with respect to certain tax issues, as more fully described in "Federal Income Tax Consequences" 6 below; and the parties' performance in all material respects of their respective agreements and undertakings in the Reorganization Plan. Assuming satisfaction of the conditions in the Reorganization Plan, the Effective Time of the Reorganization will be on September 1, 2001 or such other date as is agreed to by the parties. In addition, the consummation of the Reorganization is contingent upon the simultaneous consummation of the Concurrent Reorganization. The expenses of the Funds in connection with the Reorganization will be borne by JPMC. The Reorganization Plan and the Reorganization described herein may be abandoned at any time prior to the Effective Time of the Reorganization by either party if a material condition to the performance of such party under the Reorganization Plan or a material covenant of the other party is not fulfilled by the date specified in the Reorganization Plan or if there is a material default or material breach of the Reorganization Plan by the other party. In addition, either party may terminate the Reorganization Plan if its trustees determine that proceeding with the Reorganization Plan is not in the best interests of their Fund's shareholders. BOARD CONSIDERATIONS The JPMIF Board met on January 23 and 24 and March 26 and 27, 2001 and the MFT Board met on February 22 and on April 3, 2001, and each considered and discussed the proposed Reorganization. The Trustees of each Board discussed the advantages of reorganizing the Merging Fund into the Surviving Fund. The Board of each trust has determined that it is in the best interests of its Fund's shareholders to combine the Merging Fund with the Surviving Fund. This Reorganization is part of the general integration of the J.P. Morgan and former Chase Vista funds into a single mutual fund complex. In reaching the conclusion that the Reorganization is in the best interests of the Fund's shareholders, each Board considered a number of factors including, among others: the terms of the Reorganization Plan; a comparison of each Fund's historical and projected expense ratios; the comparative investment performance of the Merging Fund and Surviving Fund; the anticipated effect of such Reorganization on the relevant Fund and its shareholders; the investment advisory services supplied by the Surviving Fund's investment adviser; the management and other fees payable by the Surviving Fund; the similarities and differences in the investment objectives and policies of the Merging Fund and the Surviving Fund; and the recommendations of the relevant Fund's current investment adviser with respect to the proposed Reorganization. In addition, each Board took into account that, notwithstanding the fact that the Surviving Fund currently pays a higher administration fee than the Merging Fund, Morgan agreed to cap the total expenses as set forth in the expense table above and to institute a breakpoint in the administration fee from 0.10% of average daily net assets for complex wide non-money market fund assets up to $100 billion to 0.05% on assets in excess of $100 billion (currently such assets are less than $100 billion). The Merging Fund pays its administrator, Morgan, a fee at an effective rate of 0.048% of its average daily net assets. Each Board also considered additional benefits expected to arise out of the integration of the J.P. Morgan and Chase Vista mutual fund complexes. Among these benefits, the Boards considered: (1) Surviving Fund shareholders would be able to exchange into a larger number and greater variety of funds; (2) the administrator's intent to enhance its ability effectively to monitor and oversee the quality of all Fund service providers, including the investment adviser, distributor, custodian and transfer agent; (3) the administrator's undertaking to waive fees or reimburse the Surviving Fund's expenses in order that the total expense ratio of each share class of the Merging Fund does not increase during the period specified in the expense table; (4) the fact that all costs and expenses of the Reorganization would be borne by JPMC; and (5) the fact that the Reorganization would constitute a tax-free reorganization. After considering the foregoing factors, together with such information as it believed to be relevant, and in light of its fiduciary duties under federal and state law, each Board, determined that the proposed Reorganization is in the interests of the applicable Fund and its shareholders determined the best interests of the Shareholders would not be diluted as a result of the Reorganization, approved the Reorganization Plan and directed that the Reorganization Plan be submitted to the Merging Fund Shareholders for approval. THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL. 7 The JPMIF Board has not determined what action the Merging Fund will take in the event Shareholders do not approve the Reorganization Plan or for any reason the Reorganization is not consummated. In either such event, the Board will consider other appropriate courses of action. INFORMATION RELATING TO CONCURRENT REORGANIZATION The terms and conditions under which the Concurrent Reorganization may be consummated are set forth in reorganization plans which are substantially similar to the Reorganization Plan you are considering. As a result of the Reorganization and the Concurrent Reorganization, the Merging Fund and the Feeder Portfolios will no longer invest their assets in the Master Portfolio. The consummation of the Reorganization is contingent upon the simultaneous consummation of the Concurrent Reorganization. FEDERAL INCOME TAX CONSEQUENCES Consummation of the Reorganization is subject to the condition that JPMIF receive an opinion from Simpson Thacher & Bartlett to the effect that for federal income tax purposes: (i) the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for the Surviving Fund Shares and the liquidating distributions to shareholders of the Surviving Fund Shares so received, as described in the Reorganization Plan, will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and with respect to the Reorganization, the Merging Fund and the Surviving Fund will each be considered "a party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by the Merging Fund as a result of such transaction; (iii) no gain or loss will be recognized by the Surviving Fund as a result of such transaction; (iv) no gain or loss will be recognized by the Merging Fund Shareholders on the distribution to the Merging Fund Shareholders of the Surviving Fund Shares solely in exchange for their Merging Fund Shares; (v) the aggregate basis of shares of the Surviving Fund received by a shareholder of the Merging Fund will be the same as the aggregate basis of such Merging Fund Shareholder's Merging Fund Shares immediately prior to the Reorganization; (vi) the basis of the Surviving Fund in the assets of the Merging Fund received pursuant to such transaction will be the same as the basis of such assets in the hands of the Merging Fund immediately before such transaction; (vii) a Merging Fund Shareholder's holding period for the Surviving Fund Shares will be determined by including the period for which such Merging Fund Shareholder held the Merging Fund Shares exchanged therefor, provided that the Merging Fund Shareholder held such Merging Fund Shares as a capital asset; and (viii) the Surviving Fund's holding period with respect to the assets received in the Reorganization will include the period for which such assets were held by the Merging Fund. JPMIF has not sought a tax ruling from the Internal Revenue Service (the "IRS"), but is acting in reliance upon the opinion of counsel discussed in the previous paragraph. That opinion is not binding on the IRS and does not preclude the IRS from adopting a contrary position. Shareholders should consult their own advisers concerning the potential tax consequences to them, including state and local income taxes. CAPITALIZATION Because the Merging Fund will be combined with the Surviving Fund in the Reorganization as well as other funds as a result of the Concurrent Reorganization, the total capitalization of the Surviving Fund after the Reorganization and the Concurrent Reorganization is expected to be greater than the current capitalization of the Merging Fund. The following table sets forth as of February 28, 2001: (i) the capitalization of the Merging Fund; (ii) the capitalization of the Surviving Fund; and (iii) the pro forma capitalization of the Surviving Fund as adjusted to give effect to the Reorganization and the Concurrent Reorganization. There is, of course, no assurance that the Reorganization and the Concurrent Reorganization will be consummated. Moreover, if consummated, the capitalizations of the Surviving Fund and the Merging Fund are likely to be different at the Effective Time of the Reorganization as a result of fluctuations in the value of portfolio securities of each Fund and daily share purchase and redemption activity in each Fund. The Surviving Fund currently has six classes of shares: Reserve Class, Vista Class, Premier Class, Institutional Class, Class B and Class C. In connection with the Reorganization and Concurrent Reorganization, four additional classes, the Cash Management Class, Select Class, a new Institutional Class and a new Reserve Class will be introduced, the Vista Class will be renamed the "Morgan Class", the Institutional Class will be renamed "Agency Class". 8 CAPITALIZATION PRO FORMA WITH CONCURRENT REORGANIZATION (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
BENEFICIAL NET ASSET INTEREST SHARES VALUE PER OUTSTANDING OUTSTANDING NET ASSETS SHARE ----------- ----------- ----------- --------- J.P. MORGAN FUNDS J.P. Morgan Prime Money Market Fund 4,662,032 $ 4,662,087 $1.00 J.P. Morgan Institutional Prime Money Market Fund 14,102,955 $14,102,612 $1.00 J.P. Morgan Institutional Service Prime Money Market Fund 1,361,177 $ 1,361,097 $1.00 J.P. Morgan Prime Money Market Reserve Fund 279,169 $ 279,160 $1.00 J.P. Morgan Institutional Prime Direct Money Market Fund 20,307 $ 20,307 $1.00 J.P. Morgan Prime Cash Management Fund (the Merging Fund) 533,344 $ 533,339 $1.00 THE SURVIVING FUND Reserve Class 123 $ 123 $1.00 Vista Class (renamed Morgan Class) 10,213,350 $10,212,881 $1.00 Class B Class 12,496 $ 12,486 $1.00 Class C Class 309 $ 309 $1.00 Premier Class 2,059,160 $ 2,059,102 $1.00 Institutional Class (renamed Agency Class) 17,334,106 $17,333,442 $1.00 PRO FORMA THE SURVIVING FUND WITH CONCURRENT REORGANIZATION Reserve Class 279,169 $ 279,160 $1.00 Morgan Class 10,213,473 $10,213,004 $1.00 Class B Class 12,496 $ 12,486 $1.00 Class C Class 309 $ 309 $1.00 Cash Management Class 533,344 $ 533,339 $1.00 Select Class 4,662,032 $ 4,662,087 $1.00 Premier Class 3,420,337 $ 3,420,199 $1.00 Agency Class 17,354,413 $17,353,749 $1.00 Institutional Class 14,102,955 $14,102,612 $1.00
INVESTMENT POLICIES The following discussion summarizes some of the investment policies of the Surviving Fund. Except as noted below, the Merging Fund generally has similar investment policies to those of the Surviving Fund. This section is qualified in its entirety by the discussion in the preliminary Prospectus and Statement of Additional Information of the Surviving Fund, which are incorporated herein by reference. OBJECTIVE The Surviving Fund's investment objective is to aim to provide the highest possible level of current income while still maintaining liquidity and preserving capital. This objective cannot be changed without shareholder approval. THE MERGING FUND'S INVESTMENT OBJECTIVE IS TO MAXIMIZE CURRENT INCOME CONSISTENT WITH THE PRESERVATION OF CAPITAL AND SAME-DAY LIQUIDITY. THE MERGING FUND'S OBJECTIVE CAN BE CHANGED WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE MERGING FUND, WOULD ALLOW THE SURVIVING FUND TO CHANGE ITS OBJECTIVE WITHOUT SHAREHOLDER APPROVAL. 9 MAIN INVESTMENT STRATEGIES The Surviving Fund invests its assets directly in portfolio securities. THE MERGING FUND INVESTS ITS ASSETS IN THE MASTER PORTFOLIO, WHICH IN TURN INVESTS IN PORTFOLIO SECURITIES. The Surviving Fund invests in high quality, short-term money market instruments that are issued and payable in U.S. dollars. The Surviving Fund principally invests in: - high quality commercial paper and other short-term debt securities (including floating and variable rate demand notes of U.S. and foreign corporations), - debt securities issued or guaranteed by qualified banks, which include (i) U.S. banks with more than $1 billion in total assets, and foreign branches of these banks, (ii) foreign banks with the equivalent of more than $10 billion in total assets and which have branches or agencies in the U.S. and (iii) other U.S. or foreign commercial banks which JPMFAM judges to have comparable credit standing, - securities issued or guaranteed by the U.S. Government, its agencies or authorities, - asset-backed securities, and - repurchase agreements. The dollar weighted average maturity of the Surviving Fund will be 60 days or less and the Surviving Fund will buy only those instruments which have remaining maturities of 397 days or less. The Surviving Fund seeks to maintain a net asset value of $1.00 per share. The Surviving Fund may invest any portion of its assets in debt securities issued or guaranteed by U.S. banks and their foreign branches. These include certificates of deposit, time deposits and bankers' acceptances. The Surviving Fund invests only in securities issued and payable in U.S. dollars. Each investment must have the highest possible short-term rating from at least two national rating organizations, or one such rating if only one organization rates that security. Alternatively, some securities may have additional third party guarantees in order to meet the rating requirements mentioned above. If the security is not rated, it must be considered of comparable quality by JPMFAM. The Surviving Fund seeks to develop an appropriate portfolio by considering the differences in yields among securities of different maturities, market sectors and issuers. INVESTMENT RESTRICTIONS The Surviving Fund and the Merging Fund have each adopted the following investment restrictions which may not be changed without approval by a "majority of the outstanding shares" of a Fund, which means the vote of the lesser of (i) 67% or more of the voting shares of a Fund present at a meeting, if the holders of more than 50% of the outstanding voting shares of a Fund are present or represented by proxy, and (ii) more than 50% of the outstanding voting shares of a Fund.
SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund is non-subject to a The Merging Fund may not make any it similar fundamental restriction. investment inconsistent with its classification as a diversified investment company under the 1940 Act.
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SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund may not purchase the The Merging Fund may not purchase any securities of any issuer (other than security that would cause it to concentrate securities issued or guaranteed by the U.S. its investments in the securities of issuers government or any of its agencies or primarily engaged in any particular industry instrumentalities, or repurchase agreements except as permitted by the Commission, except secured thereby) if, as a result, more than that this restriction does not apply to any 25% of the Surviving Fund's total assets instruments considered to be domestic bank would be invested in the securities of money market instruments. companies whose principal business activities are in the same industry. Notwithstanding the foregoing, (i) with respect to the Surviving Fund's permissible futures and options transactions in U.S. Government securities, positions in such options and futures shall not be subject to this restriction; and (ii) the Surviving Fund may invest more than 25% of its total assets in obligations issued by banks, including U.S. banks. The Surviving Fund may not borrow money, The Merging Fund may not borrow money, except except for temporary or emergency purposes, to the extent permitted by applicable law. or by engaging in reverse repurchase transactions, in an amount not exceeding 33% of the value of its total assets at the time when the loan is made and may pledge, mortgage or hypothecate no more than 1/3 of its net assets to secure such borrowings. Any borrowings representing more than 5% of the Surviving Fund's total assets must be repaid before the Surviving Fund may make additional investments. The Surviving Fund may not purchase or sell The Merging Fund may not purchase or sell physical commodities unless acquired as a commodities or commodity contracts unless result of ownership of securities or other acquired as a result of ownership of instruments but this shall not prevent the securities or other instruments issued by Fund from (i) purchasing or selling options persons that purchase or sell commodities or and futures contracts or from investing in commodities contracts; but this shall not securities or other instruments backed by prevent the Merging Fund from purchasing, physical commodities or (ii) engaging in selling and entering into financial futures forward purchases or sales of foreign contracts (including futures contracts on currencies or securities. indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments that are not related to physical commodities.
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SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund may not make loans, except The Merging Fund may make loans to other that the Surviving Fund may: (i) purchase and persons, in accordance with the Fund's hold debt instruments (including without investment objective and policies and to the limitation, bonds, notes, debentures or other extent permitted by applicable law. obligations and certificates of deposit, bankers' acceptances and fixed time deposits) in accordance with its investment objectives and policies; (ii) enter into repurchase agreements with respect to portfolio securities; and (iii) lend portfolio securities with a value not in excess of one-third of the value of its total assets. SHAREHOLDERS OF THE SURVIVING FUND CURRENTLY ARE CONSIDERING A PROPOSAL THAT, IF PASSED AT A SHAREHOLDER MEETING TO BE HELD THE SAME DAY AS THE MEETING OF THE MERGING FUND, WOULD ADOPT A FUNDAMENTAL INVESTMENT RESTRICTION REGARDING LOANS THAT IS IDENTICAL TO THE MERGING FUND'S RESTRICTION.
Neither Fund may issue senior securities, except as permitted under the 1940 Act or any rule, order or interpretation thereunder. Neither Fund may underwrite securities of other issuers, except to the extent that the Fund, in disposing of portfolio securities, may be deemed an underwriter within the meaning of the Securities Act of 1933, as amended. Neither Fund may purchase or sell real estate (including, for the Surviving Fund, real estate limited partnerships), except that, to the extent permitted by applicable law, each Fund may (a) invest in securities or other instruments directly or indirectly secured by real estate and (b) invest in securities or other instruments issued by issuers that invest in real estate. Notwithstanding any other investment policy or restriction, the Surviving Fund may seek to achieve its investment objective by investing all of its investable assets in another investment company having substantially the same investment objective and policies as the Surviving Fund. Although the Merging Fund currently invests all of its assets in the Master Portfolio, following the Reorganization the Surviving Fund will invest directly in portfolio securities. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions described below are not fundamental policies of the Surviving Fund and/or the Merging Fund and may be changed by their respective Trustees.
SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund may not invest more than The Merging Fund may not acquire any illiquid 10% of its assets in illiquid securities. For securities, such as repurchase agreements purposes of this non-fundamental restriction, with more than seven days to maturity or "illiquid securities" include securities fixed time deposits with a duration of over restricted as to resale unless they are seven calendar days, if as a result thereof, determined to be readily marketable in more than 10% of the market value of the accordance with the procedures established by Merging Fund's total assets would be in the Board of Trustees. investments which are illiquid.
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SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund may not make short sales The Merging Fund may not purchase securities of securities, other than short sales on margin, make short sales of securities, or "against the box," or purchase securities on maintain a short position, provided that this margin except for short-term credits restriction shall not be deemed to be necessary for clearance of portfolio applicable to the purchase or sale of transactions, provided that this restriction when-issued or delayed delivery securities. will not be applied to limit the use of options, futures contracts and related options, in the manner otherwise permitted by the investment restrictions, policies and investment program of the Fund. The Surviving Fund has no current intention of making short sales against the box. The Surviving Fund may not, with respect to The Merging Fund is not subject to a similar 75% of its assets, hold more than 10% of the non- fundamental restriction, although as a outstanding voting securities of any issuer matter of fundamental policy the Merging Fund or invest more than 5% of its assets in the may not make any investment inconsistent with securities of any one issuer (other than its classification as a diversified obligations of the U.S. Government, its investment company under the 1940 Act. agencies and instrumentalities). The Surviving Fund may invest up to 5% of its The Merging Fund may not acquire securities total assets in the securities of any one of other investment companies, except as investment company, but may not own more than permitted by the 1940 Act or any order 3% of the securities of any one investment pursuant thereto. company or invest more than 10% of its total assets in the securities of other investment companies. The Surviving Fund may not purchase or sell The Merging Fund is not subject to a similar interests in oil, gas or mineral leases. non- fundamental restriction. The Surviving Fund may not write, purchase or The Merging Fund is not subject to a similar sell any put or call option or any non- fundamental restriction. combination thereof, provided that this shall not prevent (i) the writing, purchasing or selling of puts, calls or combinations thereof with respect to portfolio securities or (ii) with respect to the Surviving Fund's permissible futures and options transactions, the writing, purchasing, ownership, holding or selling of futures and options positions or of puts, calls or combinations thereof with respect to futures. The Surviving Fund will not invest more than The Merging Fund is not subject to a similar 25% of its total assets in obligations issued non- fundamental restriction. by foreign banks (other than foreign branches of U.S. banks).
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SURVIVING FUND MERGING FUND - --------------------------------------------- --------------------------------------------- The Surviving Fund is not subject to a The Merging Fund may not borrow money, except similar non-fundamental restriction, although from banks for extraordinary or emergency it is subject to the fundamental restriction purposes and then only in amounts not to regarding borrowing described above. exceed 10% of the value of the Fund's total assets, taken at cost, at the time of such borrowing or mortgage, pledge, or hypothecate any assets except in connection with any such borrowing and in amounts not to exceed 10% of the value of the Fund's net assets at the time of such borrowing. The Fund will not purchase securities while borrowings exceed 5% of the Fund's total assets; provided, however, that the Fund may increase its interest in an open-end management investment company with the same investment objective and restrictions as the Fund while such borrowings are outstanding. This borrowing provision is included to facilitate the orderly sale of portfolio securities, for example, in the event of abnormally heavy redemption requests, and is not for investment purposes and shall not apply to reverse repurchase agreements.
There will be no violation of any investment restriction if that restriction is complied with at the time the relevant action is taken notwithstanding a later change in market value of an investment, in net or total assets, in the securities rating of the investment, or any other later change. PURCHASES, REDEMPTIONS AND EXCHANGES Following the Reorganization, the procedures for purchases, redemptions and exchanges of shares will be those of the Surviving Fund, which are generally similar to those of the Merging Fund. The following discussion applies to Cash Management Class shares. This section is qualified in its entirety by the discussion in the preliminary Prospectus and Statement of Additional Information of the Surviving Fund, which are incorporated herein by reference. BUYING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CASH MANAGEMENT CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. The price shareholders pay for their shares is the net asset value per share (NAV). NAV is the value of everything the Surviving Fund owns, minus everything it owes, divided by the number of shares held by investors. The Surviving Fund seeks to maintain a stable NAV of $1.00. The Surviving Fund uses the amortized cost method to value its portfolio of securities. This method provides more stability in valuations. However, it may also result in periods during which the stated value of a security is different from the price the Surviving Fund would receive if it sold the investment. The NAV of each class of shares is generally calculated as of 5:00 p.m. Eastern time each day the Surviving Fund is accepting purchase orders. A shareholder will pay the next NAV calculated after the JPMorgan Funds Service Center (the "Center") receives that shareholder's order in proper form. An order is in proper form only after payment is converted into federal funds. The Center accepts purchase orders on any business day that the Federal Reserve Bank of New York and the New York Stock Exchange are open. If an order is sent in proper form by the Surviving Fund's cut-off time or such other time as determined by your financial intermediary, it will be processed at that day's price and you will be entitled to all dividends declared on that day. If your order is received after the cut-off time, it generally will be processed at the next day's price. If you pay by check before the cut-off time, your order generally will be processed the next day the Surviving Fund is open for business. Normally, the cut-off (in Eastern time) is 5:00 p.m. A later cut-off time may be permitted for investors buying their shares through Chase or a bank affiliate of Chase so long as such later cut-off time is before the Surviving Fund's NAV is 14 calculated. If you buy through an agent, the agent could set earlier cut-off times. The Surviving Fund can set an earlier cut-off time if the Public Securities Association recommends that the U.S. Government securities market close trading early. You must provide a Taxpayer Identification Number when you open an account. The Surviving Fund has the right to reject any purchase order for any reason. The investment minimum for Cash Management Class Shares is 10,000,000. Purchase orders will be canceled if a check does not clear and the investor will be responsible for any expenses and losses to the Fund. Shareholders seeking to buy Cash Management Class Shares through an investment representative should instruct their representative to contact the Surviving Fund. Such representatives may charge investors a fee and may offer additional services, such as special purchase and redemption programs, "sweep" programs, cash advances and redemption checks. Such representative may set different minimum investments and earlier cut-off times. SELLING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO SALES OF THE CASH MANAGEMENT CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. Shares of the Surviving Fund may be sold on any day the Center is open for trading, either directly to the Fund or through an investment representative. Shareholders of the Surviving Fund will receive the next NAV calculated after the Center accepts his or her sale order. Under normal circumstances, if a request is received before the cut-off time, the Surviving Fund will send the proceeds the same business day. An order to sell shares will not be accepted if the Surviving Fund has not collected payment for the shares. The Surviving Fund may stop accepting orders to sell and may postpone payments for more than seven days only when permitted by federal securities laws. A shareholder who purchased through an investment representative or through a financial service firm, should contact that representative, who will send the necessary documents to the Center. The representative might charge a fee for this service. Shareholders may also sell their shares by contacting the Center directly by calling 1-800-622-4273 or contact your financial intermediary. EXCHANGING SURVIVING FUND SHARES THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF CASH MANAGEMENT CLASS SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION. Cash Management Class Shares of the Surviving Fund may be exchanged for shares of the same class in certain other JPMorgan Funds. For tax purposes, an exchange is treated as a sale of those shares. Shareholders should carefully read the prospectus of the fund into which they want to exchange. Shareholders who exchange must meet any minimum investment requirements and may have to pay a sales commission. The exchange privilege is not a means of short-term trading as this could increase management cost and affect all shareholders of the Surviving Fund. The Surviving Fund reserves the right to limit the number of exchanges or refuse an exchange. Each exchange privilege may also be terminated. The Surviving Fund charges an administration fee of $5 for each exchange if an investor makes more than 10 exchanges in a year or three in a quarter. OTHER INFORMATION CONCERNING THE SURVIVING FUND For Cash Management Shares, if the balance falls below the applicable investment minimum for 30 days as a result of selling shares (and not because of performance), then the Surviving Fund reserves the right to request that you buy more shares or close your account. At least 60 days' notice will be given before closing the account. Unless a shareholder indicates otherwise on his or her account application, the Surviving Fund is authorized to act on redemption and transfer instructions received by phone. If someone trades on an account by phone, the Surviving Fund will ask that person to confirm the account registration and address to make sure they match those in the Surviving Fund records. If they do correspond, the Surviving Fund is generally authorized to follow that person's instructions. The Surviving Fund will take all reasonable precautions to confirm that the instructions are genuine. Investors agree that they will not hold the Surviving 15 Fund liable for any loss or expenses from any sales request, if the Surviving Fund takes reasonable precautions. The Surviving Fund will be liable for any losses to a shareholder from an unauthorized sale or fraud against such shareholder if the Surviving Fund does not follow reasonable procedures. It may not always be possible to reach the Center by telephone. This may be true at times of unusual market changes and shareholder activity. In that event, shareholders can mail instructions to the Surviving Fund or contact their investment representative or agent. The Surviving Fund may modify or cancel the sale of shares by phone without notice. MFT, on behalf of the Surviving Fund has entered into agreements with certain shareholder servicing agents (including Chase) under which the shareholder servicing agents agree to provide certain support services to their customers. For performing these services, each shareholder servicing agent will receive an annual fee of up to 0.50% of the average daily net assets of the Cash Management Class Shares held by investors serviced by the shareholder servicing agent. JPMFAM and/or the Distributor may, at their own expense, make additional payments to certain selected dealers or other shareholder servicing agents for performing administrative services for their customers. The Surviving Fund issues multiple classes of shares. Each class may have different requirements for who may invest, and may have different sales charges and expense levels. A person who gets compensated for selling Surviving Fund shares may receive a different amount for each class. DISTRIBUTIONS AND TAXES The Surviving Fund can earn income and realize capital gain. The Surviving Fund will deduct from these earnings any expenses and then pay to shareholders the distributions. The Surviving Fund declares dividends daily and distributes any net investment income at least monthly. Net capital gain is distributed annually. You have two options for your Surviving Fund distributions. You may: - reinvest all of them in additional Fund shares; or - take all distributions in cash or as a deposit in a pre-assigned bank account. If you don't notify us otherwise, we'll reinvest all distributions. If your distributions are reinvested, they will be in the form of shares of the same class. The taxation of dividends won't be affected by the form in which you receive them. Dividends of net investment income are usually taxable as ordinary income at the federal, state and local levels. If you receive distributions of net capital gain, the tax rate will be based on how long the Surviving Fund held a particular asset, not on how long you have owned your shares. If you buy shares just before a distribution, you will pay tax on the entire amount of the taxable distribution you receive, even though the NAV will be higher on that date because it includes the distribution amount. Early in each calendar year, the Surviving Fund will send its shareholders a notice showing the amount of distributions received in the preceding year and the tax status of those distributions. The above is only a general summary of tax implications of investing in the Surviving Fund. Shareholders should consult their tax advisors to see how investing in the Surviving Fund will affect their own tax situation. COMPARISON OF THE MERGING FUND'S AND THE SURVIVING FUND'S ORGANIZATION STRUCTURE There are no material differences in the organizational structure of the Merging Fund and the Surviving Fund. Set forth below are descriptions of the structure, voting rights, shareholder liability and the liability of Trustees. STRUCTURE OF THE MERGING FUND The Merging Fund is organized as a series of JPMIF, which is organized under the law of the Commonwealth of Massachusetts. As a Massachusetts business trust, JPMIF's operations are governed by 16 JPMIF's Declaration of Trust and By-Laws and applicable Massachusetts law. The operations of the Merging Fund are also subject to the provisions of the 1940 Act and the rules and regulations thereunder. STRUCTURE OF THE SURVIVING FUND The Surviving Fund is organized as a series of MFT, which is organized under the law of the Commonwealth of Massachusetts. As a Massachusetts business trust, MFT's operations are governed by MFT's Declaration of Trust and By-Laws and applicable Massachusetts law. The operations of the Surviving Fund are also subject to the provisions of the 1940 Act and the rules and regulations thereunder. TRUSTEES AND OFFICERS Subject to the provisions of its trust documents, the business of the Merging Fund is managed by JPMIF's Trustees and the business of the Surviving Fund is managed by MFT's Trustees, who serve indefinite terms and have all powers necessary or convenient to carry out their responsibilities. Information concerning the current Trustees and officers of MFT and JPMIF is set forth in the Funds' respective Statements of Additional Information, which are incorporated herein by reference. SHARES OF FUNDS Each of MFT and JPMIF is a trust with an unlimited number of authorized shares of beneficial interest which may be divided into series or classes thereof. Each Fund is one series of a trust and may issue multiple classes of shares. Each share of a series or class of a trust represents an equal proportionate interest in that series or class with each other share of that series or class. The shares of each series or class of either MFT or JPMIF participate equally in the earnings, dividends and assets of the particular series or class. Fractional shares have proportionate rights to full shares. Expenses of MFT or JPMIF that are not attributable to a specific series or class will be allocated to all the series of that trust in a manner believed by its board to be fair and equitable. Generally, shares of each series will be voted separately, for example, to approve an investment advisory agreement. Likewise, shares of each class of each series will be voted separately, for example, to approve a distribution plan, but shares of all series and classes vote together, to the extent required by the 1940 Act, including for the election of Trustees. Neither MFT nor JPMIF is required to hold regular annual meetings of shareholders, but may hold special meetings from time to time. There are no conversion or preemptive rights in connection with shares of either MFT or JPMIF. SHAREHOLDER VOTING RIGHTS With respect to all matters submitted to a vote of shareholders, shareholders of MFT are entitled to one vote (or a fraction thereof) for each share (or a fraction thereof) owned on the record date, and shareholders of JPMIF are entitled to the number of votes (or "voting shares") equal to the product of the number of shares owned multiplied by the net asset value per share on the record date. A vacancy in the Board of either MFT or JPMIF resulting from the resignation of a Trustee or otherwise may be filled similarly by a vote of a majority of the remaining Trustees then in office, subject to the 1940 Act. In addition, Trustees may be removed from office by a vote of two-thirds of the outstanding shares (in the case of MFT), or voting shares (in the case of JPMIF) of each portfolio of that trust. A meeting of shareholders shall be held upon the written request of not less than 10% of the outstanding shares (in the case of MFT), or voting shares (in the case of JPMIF) entitled to vote on the matters specified in the written request. Except as set forth above, the Trustees may continue to hold office and may appoint successor Trustees. SHAREHOLDER LIABILITY Under Massachusetts law, shareholders of either MFT or JPMIF could, under certain circumstances, be held personally liable as partners for the obligations of that trust. However, the Declaration of Trust of each of MFT and JPMIF disclaims shareholder liability for acts or obligations of that trust and provides for indemnification and reimbursement of expenses out of trust property for any shareholder held personally liable for the obligations of that trust. Each of MFT and JPMIF may maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of that trust, its shareholders, Trustees, officers, employees and agents covering possible tort and other liabilities. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability generally is limited to circumstances in which both inadequate insurance existed and the trust itself was unable to meet its obligations. 17 LIABILITY OF DIRECTORS AND TRUSTEES Under the Declaration of Trust of each of MFT and JPMIF, the Trustees of that trust are personally liable only for bad faith, willful misfeasance, gross negligence or reckless disregard of their duties as Trustees. Under the Declaration of Trust of each of MFT and JPMIF, a Trustee or officer will generally be indemnified against all liability and against all expenses reasonably incurred or paid by such person in connection with any claim, action, suit or proceeding in which such person becomes involved as a party or otherwise by virtue of such person being or having been a Trustee or officer and against amounts paid or incurred by such person in the settlement thereof. The foregoing is only a summary of certain organizational and governing documents and Massachusetts business trust law. It is not a complete description. Shareholders should refer to the provisions of these documents and state law directly for a more thorough comparison. Copies of the Declaration of Trust and By-Laws of each of MFT and JPMIF are available without charge upon written request to that trust. INFORMATION RELATING TO THE ADVISORY CONTRACTS AND OTHER SERVICES GENERAL INFORMATION As noted above, the investment adviser of the Master Portfolio (and therefore the Merging Fund's assets) is JPMIM. Pursuant to an Advisory Agreement, the investment adviser of the Surviving Fund is JPMFAM. DESCRIPTION OF JPMFAM JPMFAM, a registered investment adviser, is an indirect wholly-owned subsidiary of JPMC, incorporated under the laws of Delaware. JPMFAM's principal executive offices are located at 522 Fifth Avenue, New York, New York 10036. As of March 31, 2001, JPMFAM and certain of its affiliates (including JPMIM) provided investment management services with respect to assets of approximately $607.7 billion. Under the Advisory Agreement, JPMFAM is responsible for making decisions with respect to, and placing orders for, all purchases and sales of the portfolio securities of the Surviving Fund. JPMFAM's responsibilities under the Advisory Agreement include supervising the Surviving Fund's investments and maintaining a continuous investment program, placing purchase and sale orders and paying costs of certain clerical and administrative services involved in managing and servicing the Surviving Fund's investments and complying with regulatory reporting requirements. Under the Advisory Agreement, JPMFAM is obligated to furnish employees, office space and facilities required for the operation of the Surviving Fund. The services provided to the Surviving Fund by JPMFAM are substantially similar to the services currently provided to the Master Portfolio by JPMIM. EXPENSES AND MANAGEMENT FEES. The Advisory Agreement provides that the Surviving Fund will pay JPMFAM a monthly management fee based upon the net assets of the Surviving Fund. The annual rate of this management fee is 0.10%. The Merging Fund currently pays JPMIM 0.20% of the first $1 billion of average daily net assets and 0.10% of average daily net assets in excess of $1 billion with respect to its assets in the Master Portfolio. JPMFAM may waive fees from time to time. Under the Advisory Agreement, except as indicated above, the Surviving Fund is responsible for its operating expenses including, but not limited to, taxes; interest; fees (including fees paid to its Trustees who are not affiliated with JPMFAM or any of its affiliates); fees payable to the Commission; state securities qualification fees; association membership dues; costs of preparing and printing prospectuses for regulatory purposes and for distribution to existing shareholders; advisory and administrative fees; charges of the custodian and transfer agent; insurance premiums; auditing and legal expenses; costs of shareholders' reports and shareholder meetings; any extraordinary expenses; and brokerage fees and commissions, if any, in connection with the purchase or sale of portfolio securities. SUBCONTRACTING. JPMFAM is authorized by the Advisory Agreement to employ or associate with such other persons or entities as it believes to be appropriate to assist it in the performance of its duties. Any such person is required to be compensated by JPMFAM, not by the Surviving Fund, and to be approved by the shareholders of that Fund as required by the 1940 Act. LIMITATION ON LIABILITY. The Advisory Agreement provides that JPMFAM will not be liable for any error of judgment or mistake of law or for any act or omission or loss suffered by MFT or the Surviving Fund in connection with the performance of the Advisory Agreement except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or from willful misfeasance, bad 18 faith, or gross negligence in the performance of its duties or reckless disregard of its obligations and duties under the Advisory Agreement. DURATION AND TERMINATION. The Advisory Agreement will continue in effect from year to year with respect to the Surviving Fund, only so long as such continuation is approved at least annually by (i) the Board of Trustees of MFT or the majority vote of the outstanding voting securities of the Surviving Fund, and (ii) a majority of those Trustees who are neither parties to the Advisory Agreement nor "interested persons," as defined in the 1940 Act, of any such party, acting in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement will terminate automatically in the event of its "assignment," as defined in the 1940 Act. In addition, the Advisory Agreement is terminable at any time as to the Surviving Fund without penalty by the MFT Board or by vote of the majority of the Surviving Fund's outstanding voting securities upon 60 days' written notice to JPMFAM, and by JPMFAM on 60 days' written notice to MFT. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS JPMFAM, as the investment adviser to the Surviving Fund, has responsibilities with respect to the Fund's portfolio transactions and brokerage arrangements pursuant to the Fund's policies, subject to the overall authority of the MFT Board. Under the Advisory Agreement, JPMFAM, subject to the general supervision of the Board, is responsible for the placement of orders for the purchase and sale of portfolio securities for the Surviving Fund with brokers and dealers selected by JPMFAM. These brokers and dealers may include brokers or dealers affiliated with JPMFAM to the extent permitted by the 1940 Act and MFT's policies and procedures applicable to the Fund. JPMFAM shall use its best efforts to seek to execute portfolio transactions at prices which, under the circumstances, result in total costs or proceeds being the most favorable to such Fund. In assessing the best overall terms available for any transaction, JPMFAM shall consider all factors it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, research services provided to JPMFAM, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In no event shall JPMFAM be under any duty to obtain the lowest commission or the best net price for the Fund on any particular transaction, nor shall JPMFAM be under any duty to execute any order in a fashion either preferential to such Fund relative to other accounts managed by JPMFAM or otherwise materially adverse to such other accounts. In selecting brokers or dealers qualified to execute a particular transaction, brokers or dealers may be selected who also provide brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934) to JPMFAM, the Fund and/or the other accounts over which JPMFAM exercises investment discretion. JPMFAM is authorized to pay a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if JPMFAM determines in good faith that the total commission is reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the overall responsibilities of JPMFAM with respect to accounts over which it exercises investment discretion. JPMFAM shall report to the Board regarding overall commissions paid by the Fund and their reasonableness in relation to the benefits to such Fund. In executing portfolio transactions for the Fund, JPMFAM may, to the extent permitted by applicable laws and regulations, but shall not be obligated to, aggregate the securities to be sold or purchased with those of other funds or its other clients if, in JPMFAM's reasonable judgment, such aggregation (i) will result in an overall economic benefit to such fund, taking into consideration the advantageous selling or purchase price, brokerage commission and other expenses, and trading requirements, and (ii) is not inconsistent with the policies set forth in MFT's registration statement, as the case may be, and the Fund's Prospectus and Statement of Additional Information. In such event, JPMFAM will allocate the securities so purchased or sold, and the expenses incurred in the transaction, in an equitable manner, consistent with its fiduciary obligations to such Fund and such other clients. It is possible that certain of the brokerage and research services received will primarily benefit one or more other investment companies or other accounts for which JPMFAM exercises investment discretion. Conversely, MFT or any of its portfolios may be the primary beneficiary of the brokerage or research services received as a result of portfolio transactions effected for such other accounts or investment companies. 19 OTHER SERVICES The Distributor is a wholly owned, indirect subsidiary of BISYS Fund Services, Inc., which currently serves as the distributor for both the Surviving and the Merging Fund and as sub-administrator for the Surviving Fund. An affiliate of the Distributor is the sub-administrator for the Merging Fund. The Distributor is unaffiliated with JPMC or any of its subsidiaries. Chase serves as administrator, shareholder servicing agent, fund accountant and custodian, and DST serves as transfer agent and dividend disbursing agent, for the Surviving Fund. The principal business address of Chase is 270 Park Avenue, New York, NY 10017. The services provided by Chase include day-to-day maintenance of certain books and records, calculation of the offering price of the shares and preparation of reports. In its role as custodian, Chase is responsible for the daily safekeeping of securities and cash held by the Surviving Fund. It is anticipated that prior to the consummation of the Reorganization, BONY will become the Surviving Fund's fund accountant and custodian. As of August 11, 2001, Chase will receive an administration fee from the Surviving Fund of 0.10% of average daily net assets for complex wide money market fund assets up to $100 billion and 0.05% on assets in excess of $100 billion (currently such assets are less than $100 billion). The Merging Fund pays Morgan, its administrator, a fee at an effective rate of 0.048% of its average daily net assets. PROPOSAL 2: ELECTION OF TRUSTEES It is proposed that shareholders of the Merging Fund consider the election of the individuals listed below (the "Nominees") to the Board of Trustees of JPMIF, which is currently organized as a Massachusetts business trust. Even if the Reorganization described in Proposal 1 is approved, other mutual funds that are series of JPMIF will continue to exist and operate. All shareholders of any series of JPMIF as of the record date (April 6, 2001) are required to be given a vote on the proposal regarding Trustees. Because as of the record date you were still a shareholder in JPMIF, you are entitled to vote on this proposal. Shareholders of MFT are being asked to approve the same Trustees as are being proposed for JPMIF. In connection with the recent merger of J.P. Morgan & Co. Incorporated and The Chase Manhattan Corporation, it has been proposed, subject to shareholder approval, that the Boards of Trustees of the investment companies managed by JPMFAM, JPMIM and their affiliates be reorganized. JPMC and the Boards considered that the Boards of Trustees for the registered investment companies advised by J.P. Morgan Investment Management Inc. and the registered investment companies advised by J.P. Morgan Fleming Asset Management (USA) Inc. also be integrated and streamlined into a consolidated Board of Trustees to serve all of the funds in the Fund Complex (as defined below) (the "Consolidated Board"). It is anticipated that having a Consolidated Board will enhance the governance of the larger Fund Complex and is consistent with the prior practice of having a single Board for each predecessor fund complex. JPMC believes, and the respective Boards similarly concluded, that the Consolidated Board will increase administrative efficiencies for JPMC and the funds in the Fund Complex and will benefit shareholders of all such funds. The eight individuals who are being proposed for election to the Consolidated Board, and hence the Nominees described in this Proposal, were nominated after a careful and deliberate selection process by the respective Nominating Committees and Boards of Trustees. This selection process included the consideration of various factors, such as the desire to balance the respective expertise of the various candidates and diversity of background, the historical experience of various Trustees and Advisory Board members of the predecessor complexes, the size of the Board and related future cost savings, the practicalities dictated by the age 70 retirement policy of the registered investment companies advised by J.P. Morgan Investment Management Inc., and other factors the Boards deemed relevant. Therefore, the Nominees include certain current Trustees of MFT and certain current Trustees of JPMIF, including certain members of JPMIF's Advisory Board. Each Nominee has consented to being named in this Combined Prospectus/Proxy Statement and has agreed to serve as a Trustee if elected. Each Trustee will hold office for a term of unlimited duration subject to the current retirement age of 70.(1) The Trustees have no reason to believe that any Nominee will be unavailable for election. Shareholders of MFT are concurrently considering the election of the same individuals to the Board of Trustees of MFT. Biographical information about the Nominees and other relevant information is set forth below. More information regarding the current Trustees of MFT and JPMIF is contained in the Funds' Statements of Additional Information, which are incorporated herein by reference. 20 The persons named in the accompanying form of proxy intend to vote each such proxy "FOR" the election of the Nominees, unless shareholders specifically indicate on their proxies the desire to withhold authority to vote for elections to office. It is not contemplated that any Nominee will be unable to serve as a Board member for any reason, but if that should occur prior to the Meeting, the proxy holders reserve the right to substitute another person or persons of their choice as nominee or nominees. (1) Each nominee is grandfathered with respect to the mandatory retirement age for three years from the date of election. THE JPMIF BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES LISTED BELOW. VOTE REQUIRED The affirmative vote of the holders of more than 50% of the voting shares of JPMIF present, in person or by proxy, at the joint Meeting is required to elect a Trustee of JPMIF, provided that at least one-third of the outstanding shares of JPMIF is represented at the joint Meeting, either in person or by proxy. In the event that the requisite vote is not reached, the current Trustees would remain as the only Trustees of JPMIF. The following are the nominees:
TRUSTEE NAME OF NOMINEE AND OF JPMIF BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS CURRENT POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS AND CURRENT DIRECTORSHIPS - ----------------------------------- -------- --- ------------------------------------------------------ William J. Armstrong-- Nominee 59 Retired; formerly Vice President and Treasurer, Trustee of certain other trusts Ingersoll-Rand Company (manufacturer of industrial in the Fund Complex since 1987 supplies). Address: 287 Hampshire Ridge, Park Ridge, NJ 07656. Roland R. Eppley, Jr.-- Nominee 68 Retired; formerly President and Chief Executive Trustee of certain other trusts Officer, Eastern States Bankcard Association Inc. in the Fund Complex since 1989 (financial services) (1971-1988); Director, Janel Hydraulics, Inc.; formerly Director of The Hanover Funds, Inc. (open-end mutual funds) Address: 105 Coventry Place, Palm Beach Gardens, FL 33418. Ann Maynard Gray-- Nominee 55 Former President, Diversified Publishing Group and Member of Advisory Board of the Vice President, Capital Cities/ABC, Inc. Ms. Gray is Trust and certain other trusts in also a director of Duke Energy Corporation and Elan the Fund Complex since 2000 Corporation, plc (pharmaceuticals) Address: 1262 Rockrimmon Road, Stamford, CT 06903. Matthew Healey-- 1982 63 Former Chief Executive Officer of the Trust through Chairman of the Trust and certain April 2001; Chairman, Pierpont Group (provides other trusts in the Fund Complex services to trustees of investment companies), since prior to 1993. Address: Pine Tree Country Club Estates, 10286 Saint Andrews Road, Boynton Beach, Florida 33436. Fergus Reid, III*-- Nominee 68 Chairman and Chief Executive Officer, Lumelite Chairman of certain other trusts Corporation (plastics manufacturing), since September in the Fund Complex; Trustee of 1985; Trustee, Morgan Stanley Funds. Address: other trusts in the Fund Complex 202 June Road, Stamford, CT 06903. since 1984 James J. Schonbachler-- Nominee 58 Retired; prior to September, 1998, Managing Director, Member of Advisory Board of the Bankers Trust Company and Group Head and Director, Trust and certain other trusts in Bankers Trust A.G., Zurich and BT Brokerage Corp. the Fund Complex since 2000 (financial services) Address: 3711 Northwind Court, Jupiter, FL 33477.
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TRUSTEE NAME OF NOMINEE AND OF JPMIF BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATIONS CURRENT POSITION WITH FUND COMPLEX SINCE AGE DURING THE PAST FIVE YEARS AND CURRENT DIRECTORSHIPS - ----------------------------------- -------- --- ------------------------------------------------------ Leonard M. Spalding, Jr.*-- Nominee 65 Retired; formerly Chief Executive Officer of Chase Trustee of certain other trusts Mutual Funds Corp.; formerly President and Chief in the Fund Complex since 1998 Executive Officer of Vista Capital Management (investment management); and formerly Chief Investment Executive of The Chase Manhattan Private Bank (investment management). Address: 2025 Lincoln Park Road, Springfield, KY 40069. H. Richard Vartabedian-- Nominee 65 Former President of certain other trusts in the Fund Trustee of certain other trusts Complex through April 2001; Investment Management in the Fund Complex since 1992 Consultant; formerly, Senior Investment Officer, Division Executive of the Investment Management Division of The Chase Manhattan Bank, N.A., 1980-1991. Address: P.O. Box 296, Beach Road, Hendrick's Head, Southport, ME 04576.
- ------------------- * Mr. Spalding is deemed to be an "interested person" (as defined in the 1940 Act) due to his ownership of equity securities of affiliates of JPMC. It is anticipated that Mr. Reid will be named Chairman of the Trust and therefore will be deemed to be an "interested person" of the Trust.
If elected, each nominee would oversee 91 separate portfolios. The Board of Trustees and Advisory Board Members of JPMIF each met five times during the 2000 calendar year, and each of these individuals attended at least 75% of the meetings of the Board and any committee on which he or she serves. The Board of Trustees of JPMIF presently has an Audit Committee. The members of the Audit Committee are Messrs. Addy (Chairman), Eschenlauer, Burns, Mallardi and Healey. The function of the Audit Committee is to recommend independent auditors and monitor accounting and financial matters. The Audit Committee met four times during the 2000 calendar year. The Board of Trustees of JPMIF presently has a Nominating Committee. The members of the Nominating Committee are Messrs. Addy, Eschenlauer, Burns and Mallardi. The function of the Nominating Committee is to nominate trustees for the Board to consider. The Nominating Committee met one time during the 2000 calendar year. REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS Each current Trustee is reimbursed for expenses incurred in attending each meeting of the Board of Trustees or any committee thereof. Each Trustee who is not an affiliate of JPMIM is compensated for his or her services according to a fee schedule which recognizes the fact that each Trustee also serves as a Trustee of other investment companies advised by JPMIM. Each Trustee receives a fee, allocated among all investment companies for which the Trustee serves. 22 Set forth below is information regarding compensation paid or accrued during the calendar year ended December 31, 2000 for each nominee of JPMIF:
COMPENSATION FROM PENSION OR RETIREMENT TOTAL COMPENSATION FROM "MORGAN FUND COMPLEX"(1) BENEFITS ACCRUED "FUND COMPLEX"(2) -------------------------------- --------------------- ----------------------- William J. Armstrong NA $ 41,781 $ 90,000 (10)(3) Roland R. Eppley, Jr. NA $ 58,206 $ 91,000 (10)(3) Ann Maynard Gray $75,000 NA $ 75,000 (17)(3) Matthew Healey(4) $75,000 NA $ 75,000 (17)(3) Fergus Reid, III NA $110,091 $202,750 (10)(3) James J. Schonbachler $75,000 NA $ 75,000 (17)(3) Leonard M. Spalding, Jr. NA $ 35,335 $ 89,000 (10)(3) H. Richard Vartabedian NA $ 86,791 $134,350 (10)(3)
- ------------------- (1) The Morgan Fund Complex means registered investment companies advised by JPMIM. (2) A Fund Complex generally means two or more investment companies that hold themselves out to investors as related companies for purposes of investment and investment services, or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other investment companies (as used herein, registered investment companies advised by JPMIM and JPMFAM). (3) Total number of investment company boards with respect to Trustees, or Advisory Boards with respect to Advisory Board members, served on within the Fund Complex. (4) Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of Pierpont Group, Inc., compensation in the amount of $200,000, contributed $25,500 to a defined contribution plan on his behalf and paid $18,400 in insurance premiums for his benefit.
Inasmuch as the Morgan Fund Complex does not have any retirement plan for its Trustees and JPMC will also benefit from the administrative efficiencies of a consolidated board, JPMC has agreed to pay a one-time retirement package to the Trustees of the Morgan Fund Complex and the Advisory Board members who have volunteered to leave the Board of Trustees or Advisory Board of the Morgan Fund Complex prior to their normal retirement date. For each retiring Trustee, the retirement package is equal to three times the annual fee (which may increase) for the new Combined Board per Trustee; for each retiring Advisory Board member, the retirement package is one and a half times the annual fee (which may increase) for the new Combined Board per Trustee. FORMER CHASE VISTA FUNDS' RETIREMENT PLAN AND DEFERRED COMPENSATION PLAN FOR ELIGIBLE TRUSTEES Effective August 21, 1995, the Trustees of the former Chase Vista Funds also instituted a Retirement Plan for Eligible Trustees (the "Plan") pursuant to which each Trustee (who is not an employee of the former Chase Vista Funds' adviser, administrator or distributor or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, the normal retirement date is the date on which the eligible Trustee has attained age 65 and has completed at least five years of continuous service with one or more of the investment companies advised by the adviser of certain former Chase Vista Funds and its affiliates (collectively, the "Covered Funds"). Each Eligible Trustee is entitled to receive from the Covered Funds an annual benefit commencing on the first day of the calendar quarter coincident with or following his date of retirement equal to the sum of (1) 8% of the highest annual compensation received from the Covered Funds multiplied by the number of such Trustee's years of service (not in excess of 10 years) completed with respect to any Covered Funds and (2) 4% of the highest annual compensation received from the Covered Funds for each year of service in excess of 10 years, provided that no Trustee's annual benefit will exceed the highest annual compensation received by that Trustee from the Covered Funds. Such benefit is payable to each eligible Trustee in monthly installments for the life of the Trustee. On February 22, 2001, the board of Trustees voted to terminate the Plan and in furtherance of this determination agreed to pay Trustees an amount equal, in the aggregate, to $10.95 million, of which $5.3 million had been previously accrued by the Covered Funds. The remaining $5.65 million was paid by Chase. Messrs. Armstrong, Eppley, Reid, Spalding and Vartabedian, who are Nominees, received $1,027,673, $800,600, $2,249,437, $463,798 and $1,076,927, respectively, in connection with the termination. Each nominee has elected to defer receipt of such amount pursuant to the Deferred Compensation Plan for Eligible Trustees. Effective August 21, 1995, the Trustees instituted a Deferred Compensation Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which each Trustee (who is not an employee of the former Chase Vista Funds' adviser, administrator or distributor or any of their affiliates) may enter into agreements 23 with such Funds whereby payment of the Trustees' fees are deferred until the payment date elected by the Trustee (or the Trustee's termination of service). The deferred amounts are deemed invested in shares of funds as elected by the Trustee at the time of deferral. If a deferring Trustee dies prior to the distribution of amounts held in the deferral account, the balance of the deferral account will be distributed to the Trustee's designated beneficiary in a single lump sum payment as soon as practicable after such deferring Trustee's death. Messrs. Armstrong, Eppley, Reid, Spalding and Vartabedian are the only Nominees who have elected to defer compensation under such plan. The Trustees decide upon general policies and are responsible for overseeing JPMIF's business affairs. To assist the Trustees in exercising their overall supervisory responsibilities, each of JPMIF and the Master Portfolio has entered into a Fund Services Agreement with Pierpont Group, Inc. Pierpont Group, Inc. was organized in July 1989 to provide services for the J.P. Morgan Family of Funds (formerly "The Pierpont Family of Funds"), and the Trustees are the equal and sole shareholders of Pierpont Group, Inc. JPMIF paid Pierpont Group, Inc. a fee in an amount representing its reasonable costs in performing these services. As part of the overall integration and rationalization of the Funds within the Fund Complex, it is anticipated that the Merging Fund will terminate its agreement with Pierpont Group, Inc. in connection with the Reorganization. The consolidated Board of Trustees will instead look to counsel, auditors, Morgan and other service providers as necessary. The aggregate fees paid to Pierpont Group, Inc. by the Merging Fund and the Master Portfolio during the indicated fiscal periods are set forth below: MERGING FUND -- For the period August 21, 2000 through November 30, 2000: $1,092. MASTER PORTFOLIO -- For the fiscal years ended November 30, 1998, 1999 and 2000: $173,032, $228,328 and $268,198. PRINCIPAL EXECUTIVE OFFICERS JPMIF's principal executive officers are listed below. The officers conduct and supervise the business operations of JPMIF. The business address of each of the officers, unless otherwise noted, is J.P. Morgan Fund Distributors, Inc., 1211 Avenue of Americas, New York, New York, 10036. Each officer will hold office for an indefinite term, but may be removed by the Board of Trustees at any time. The principal executive officers of JPMIF are as follows:
NAME AND POSITION AGE PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS AND OTHER INFORMATION - ----------------- --- --------------------------------------------------------------------- David Wezdenko, 37 Vice President, J.P. Morgan Investment Management Inc. Mr. Wezdenko President and is the Chief Operating Officer for the U.S. Mutual Funds and Treasurer Financial Intermediaries Business. Since joining J.P. Morgan in 1996, (April he has held numerous financial and operations related positions 2001-present) supporting the J.P. Morgan pooled funds business. Sharon Weinberg, 41 Vice President, J.P. Morgan Investment Management Inc. Ms. Weinberg Vice-President is head of Business and Product Strategy for the U.S. Mutual Funds and Secretary and Financial Intermediaries business. Since joining J.P. Morgan in (April 1996 in New York, she has held numerous positions throughout the 2001-present) asset management business in mutual funds marketing, legal and product development.
ACCOUNTANTS Pricewaterhouse Coopers LLP serves as the Merging Fund's, the Master Portfolio's and the Surviving Fund's independent accountants, auditing and reporting on the annual financial statements and reviewing certain regulatory reports and federal income tax returns. PricewaterhouseCoopers LLP also performs other professional accounting, auditing, tax and advisory services when MFT or JPMIF engages it to do so. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Meeting, and will have an opportunity to make a statement if they desire. Such representatives are expected to be available to respond to appropriate questions at the Meeting. AUDIT FEES. The aggregate fees paid to PricewaterhouseCoopers LLP in connection with the annual audit of the Merging Fund and the Master Portfolio for the last fiscal year was $42,500. 24 FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no financial information systems and design implementation services rendered by PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates that provide services to the Fund for the calendar year ended December 31, 2000. ALL OTHER FEES. The aggregate fees billed for all other non-audit services, including fees for tax-related services, rendered by PricewaterhouseCoopers LLP to the Merging Fund, JPMIM and JPMIM's affiliates that provide services to the Fund for the calendar year ended December 31, 2000 was $11,025,350. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the independence of PricewaterhouseCoopers LLP. INFORMATION RELATING TO VOTING MATTERS GENERAL INFORMATION This Combined Prospectus/Proxy Statement is being furnished in connection with the solicitation of proxies by the JPMIF Board for use at the Meeting. It is expected that the solicitation of proxies will be primarily by mail. JPMIF's officers and service providers may also solicit proxies by telephone, facsimile machine, telegraph, the Internet or personal interview. In addition JPMIF may retain the services of professional solicitors to aid in the solicitation of proxies for a fee. It is anticipated that banks, brokerage houses and other custodians will be requested on behalf of JPMIF to forward solicitation materials to their principals to obtain authorizations for the execution of proxies. Any Merging Fund Shareholder giving a proxy may revoke it at any time before it is exercised by submitting to JPMIF a written notice of revocation or a subsequently executed proxy or by attending the Meeting and electing to vote in person. Only the Merging Fund Shareholders of record at the close of business on April 6, 2001 will be entitled to vote at the Meeting. On that date, there were outstanding and entitled to be voted 514,240,874.310 Merging Fund shares. Each shareholder of the Merging Fund is entitled to the number of votes equal to the product of the number of shares owned multiplied by the net asset value per share on the record date. The presence in person or by proxy of shareholders that own one-third of the outstanding Merging Fund shares will constitute a quorum for purposes of transacting all business at the Meeting. If a quorum is not present at the Meeting, sufficient votes in favor of the proposals are not received by the time scheduled for the Meeting, or the Merging Fund Shareholders determine to adjourn the Meeting for any other reason, the Merging Fund Shareholders present (in person or proxy) may adjourn the Meeting from time to time, without notice other than announcement at the Meeting. Any such adjournment will require the affirmative vote of the Merging Fund Shareholders holding a majority of the Merging Fund voting shares present, in person or by proxy, at the Meeting. The persons named in the Proxy will vote in favor of such adjournment those Merging Fund voting shares that they are entitled to vote if such adjournment is necessary to obtain a quorum or if they determine such an adjournment is desirable for any other reason. Business may be conducted once a quorum is present and may continue until adjournment of the Meeting notwithstanding the withdrawal or temporary absence of sufficient Merging Fund voting shares to reduce the number present to less than a quorum. If the accompanying proxy is executed and returned in time for the Meeting, the voting shares covered thereby will be voted in accordance with the proxy on all matters that may properly come before the meeting (or any adjournment thereof). PROXIES All Merging Fund voting shares represented by each properly signed proxy received prior to the Meeting will be voted at the Meeting. If a Merging Fund Shareholder specifies how the proxy is to be voted on any of the business to come before the Meeting, it will be voted in accordance with such specifications. If a Merging Fund Shareholder returns its proxy but no direction is made on the proxy, the proxy will be voted FOR each Proposal described in this Combined Prospectus/Proxy Statement. The Merging Fund Shareholders voting to ABSTAIN on the Proposals will be treated as present for purposes of achieving a quorum and in determining the votes cast on the Proposals, but not as having voted FOR (and therefore will have the effect of a vote against) the Proposals. A properly signed proxy on which a broker has indicated that it has no authority to vote on the Proposals on behalf of the beneficial owner (a "broker non-vote") will be treated as present for purposes of achieving a quorum but will not be counted in determining the votes cast on (and therefore will have the effect of a vote against) the Proposals. A proxy granted by any Merging Fund Shareholder may be revoked by such Merging Fund Shareholder at any time prior to its use by written notice to JPMIF, by submission of a later dated Proxy or by voting in 25 person at the Meeting. If any other matters come before the Meeting, proxies will be voted by the persons named as proxies in accordance with their best judgment. EXPENSES OF PROXY SOLICITATION JPMC, and not the Merging Fund or the Surviving Fund (or shareholders of either Fund) will pay the cost of the preparation, printing and mailing to its shareholders of the Combined Prospectus/Proxy Statement, accompanying Notice of Meeting, form of proxy and any supplementary solicitation of its shareholders. It is expected that the cost of retaining D.F. King & Co., Inc., to assist in the proxy solicitation process for the fund complex will not exceed $200,000, which cost will be borne by JPMC. INTERESTED PARTIES On the Record Date, the Trustees and officers of JPMIF as a group owned less than 1% of the outstanding shares of the Merging Fund. On the record date, the name, addresss and percentage ownership of the persons who owned beneficially more than 5% of the shares of the Merging Fund and the percentage of the shares of the Surviving Fund that would be owned by such persons upon consummation of the Reorganization and the Concurrent Reorganization based upon their holdings at April 6, 2001, are as follows:
PERCENTAGE OF PERCENTAGE OF AMOUNT MERGING FUND SURVIVING FUND OF SHARES OWNED ON OWNED UPON NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION - ----------------------------------- ------------------ ------------- -------------- The Chicago Trust Co. 266,171,499.9900 51.76% 0.53% Attn Wyckliffe Pattishall 171 N. Clark St Chicago, IL 60601-3203 The Chicago Trust Company of CA 136,312,769.9100 26.51% 0.27% Attn Marva Gesell PO Box 121589 San Diego, CA 92112-1589
On the record date, the Trustees and officers of MFT as a group owned less than 1% of the outstanding shares of the Surviving Fund. On the record date, the name, address and percentage ownership of the persons who owned beneficially more than 5% of the shares of the Surviving Fund and the percentage of shares of the Surviving Fund that would be owned by such persons upon consummation of the Reorganization and the Concurrent Reorganization based upon their holdings at April 6, 2001 are as follows:
PERCENTAGE OF PERCENTAGE OF AMOUNT MERGING FUND SURVIVING FUND OF SHARES OWNED ON OWNED UPON NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION - ----------------------------------- ------------------ ------------- -------------- Chase Manhattan Bank N/A 4,047,731,644.6700 12.85% 8.14% Global Investor Services Omnibus AC Attn Barrington A Miller 3 Chase Metro Tech Center--7th Flr Brooklyn NY 11245 Chase Manhattan Bank N/A 2,770,184,655.3900 8.79% 5.57% Global Investor Services Omnibus AC Attn Barrington A Miller 3 Chase Metro Tech Center--7th Flr Brooklyn NY 11245
PROPOSALS TO BE SUBMITTED BY SHAREHOLDERS The Merging Fund does not generally hold an Annual Meeting of Shareholders. Shareholders wishing to submit proposals for inclusion in a proxy statement for a subsequent shareholders' meeting should send their written proposals to the Secretary of the Merging Fund at the address set forth on the cover of this Combined Prospectus/Proxy Statement. ADDITIONAL INFORMATION ABOUT MFT Information about the Surviving Fund is included in its Prospectus, which is incorporated by reference and enclosed herein. Additional information about the Surviving Fund is also included in MFT's Statement 26 of Additional Information, which has been filed with the Commission and which is incorporated herein by reference. Copies of the Statement of Additional information may be obtained without charge by calling 1-800-348-4782. MFT is subject to the requirements of the 1940 Act and, in accordance with such requirements, files reports and other information with the Commission. These materials can be inspected and copied at the Public Reference Facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained from the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates, and are also available on the Commission's web site at http://www.sec.gov. ADDITIONAL INFORMATION ABOUT JPMIF Information about the Merging Fund is included in its Prospectus, which is incorporated by reference herein. Additional information about the Merging Fund is also included in JPMIF's Statement of Additional Information which has been filed with the Commission and which is incorporated herein by reference. Copies of the Statement of Additional information may be obtained without charge by calling 1-800-766-7722. JPMIF is subject to the requirements of the 1940 Act and, in accordance with such requirements, files reports and other information with the Commission. These materials can be inspected and copied at the Public Reference Facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained from the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates, and are also available on the Commission's web site at http://www.sec.gov. FINANCIAL STATEMENTS AND EXPERTS The audited financial highlights, financial statements and notes thereto of the Merging Fund for the fiscal year ended November 30, 2000, and the Surviving Fund for the fiscal year ended August 31, 2000, and the audited financial statements, notes thereto and supplementary data for the Master Portfolio for the fiscal year ended November 30, 2000, are incorporated by reference herein and into the Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The audited financial highlights, financial statements, notes thereto and supplementary data, as applicable, for the Merging Fund, the Surviving Fund and the Master Portfolio have been incorporated herein by reference in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on their authority as experts in auditing and accounting. The unaudited financial highlights, financial statements and notes thereto of the Surviving Fund for the fiscal period ended February 28, 2001 are incorporated by reference herein and into the Statement of Additional Information related to this Combined Prospectus/Proxy Statement. OTHER BUSINESS The JPMIF Board knows of no other business to be brought before the Meeting. However, if any other matters come before the Meeting, it is the intention of the JPMIF Board that proxies that do not contain specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named in the enclosed form of proxy. LITIGATION Neither MFT nor JPMIF is involved in any litigation that would have any material adverse effect upon either the Merging Fund or the Surviving Fund. 27 SHAREHOLDER INQUIRIES Shareholder inquiries may be addressed to JPMIF in writing at the address on the cover page of this Combined Prospectus/Proxy Statement or by telephoning 1-800-766-7722. * * * SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. 28 APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this 11th day of May, 2001 by and among J.P. Morgan Institutional Funds (the "Transferor Trust"), a Massachusetts business trust, on behalf of the J.P. Morgan Prime Cash Management Fund (the "Transferor Portfolio"), Mutual Fund Trust (the "Acquiring Trust"), a Massachusetts business trust, on behalf of JPMorgan Prime Money Market Fund II (formerly, Chase Vista Prime Money Market Fund) (the "Acquiring Portfolio"). WHEREAS, the Board of Trustees of each of the Transferor Trust and the Acquiring Trust has determined that the transfer of all of the assets and liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the best interests of the Transferor Portfolio and the Acquiring Portfolio, as well as the best interests of shareholders of the Transferor Portfolio and the Acquiring Portfolio, and that the interests of existing shareholders would not be diluted as a result of this transaction; WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to provide for the reorganization of the Transferor Portfolio (the "Reorganization") through the acquisition by the Acquiring Portfolio of all of the assets, subject to all of the liabilities, of the Transferor Portfolio in exchange for shares of beneficial interest of the Acquiring Portfolio (the "Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and the distribution to Transferor Portfolio shareholders of such Acquiring Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code"); NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows: 1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE ACQUIRING PORTFOLIO SHARES AND LIQUIDATION AND TERMINATION OF THE TRANSFEROR PORTFOLIO (a) PLAN OF REORGANIZATION. (i) The Transferor Trust on behalf of the Transferor Portfolio listed above, will convey, transfer and deliver to the Acquiring Portfolio all of the then existing assets of the Transferor Portfolio (consisting, without limitation, of portfolio securities and instruments, dividend and interest receivables, cash and other assets). In consideration thereof, the Acquiring Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the extent that they exist on or after the Effective Time of the Reorganization (as defined in Section 1(b)(i) hereof), all of the obligations and liabilities of the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio full and fractional shares of beneficial interest of the Acquiring Portfolio, with respect to the Acquiring Portfolio equal to that number of full and fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio shall be of the Cash Management Class share class in exchange for shares of the Transferor Portfolio, with the amounts of shares of each share class to be determined by the parties. Any shares of beneficial interest (if any) of the Transferor Portfolio ("Transferor Portfolio Shares") held in the treasury of the Transferor Trust at the Effective Time of the Reorganization shall thereupon be retired. Such transactions shall take place on the date provided for in Section 1(b) hereof (the "Exchange Date"). All computations for the Transferor Portfolio and the Acquiring Portfolio shall be performed by their respective custodians and J.P. Morgan Chase & Co. The determination of said parties shall be conclusive and binding on all parties in interest. (ii) As of the Effective Time of the Reorganization, the Transferor Trust will liquidate and distribute pro rata to its shareholders of record ("Transferor Portfolio Shareholders") as of the Effective Time of the Reorganization the Acquiring Portfolio Shares received by such Transferor Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the shares of the Transferor Portfolio held by the Transferor Portfolio shareholders. Such liquidation and distribution will be accomplished by the transfer of the Acquiring Portfolio Shares then credited to the account of the Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts on the share records of the Acquiring Portfolio in the names of the Transferor Portfolio Shareholders and representing the respective pro rata number of the Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will not issue certificates representing the Acquiring Portfolio Shares in connection with such exchange. A-1 (iii) As soon as practicable after the Effective Time of the Reorganization, the Transferor Trust shall take all the necessary steps under Massachusetts law, the Transferor Trust's Declaration of Trust and any other applicable law to effect a complete termination of the Transferor Portfolio. (b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION. (i) Subject to the satisfaction of the conditions to the Reorganization specified in this Plan, the Reorganization shall occur as of the close of regularly scheduled trading on the New York Stock Exchange (the "Effective Time of the Reorganization") on September 1, 2001, or such later date as may be agreed upon by the parties (the "Exchange Date"). (ii) All acts taking place on the Exchange Date shall be deemed to take place simultaneously as of the Effective Time of the Reorganization unless otherwise provided. (iii) In the event that on the proposed Exchange Date (A) the New York Stock Exchange shall be closed to trading or trading thereon shall be restricted, or (B) trading or the reporting of trading on said Exchange or elsewhere shall be disrupted so that accurate valuation of the net assets of the Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. (iv) On the Exchange Date, portfolio securities of the Transferor Portfolio shall be transferred by the Custodian to the accounts of the Acquiring Portfolio duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. (c) VALUATION. (i) The net asset value of the shares of the Acquiring Portfolio and the net value of the assets of the Transferor Portfolio to be transferred in exchange therefore shall be determined as of the Effective Time of the Reorganization. The net asset value of the Acquiring Portfolio Shares shall be computed by the Custodian in the manner set forth in the Acquiring Trust's Declaration of Trust or By-laws and then current prospectus and statement of additional information and shall be computed to not less than two decimal places. The net value of the assets of the Transferor Portfolio to be transferred shall be computed by the Custodian by calculating the value of the assets transferred by the Transferor Portfolio and by subtracting therefrom the amount of the liabilities assigned and transferred to the Acquiring Portfolio, said assets and liabilities to be valued in the manner set forth in the Transferor Trust's Declaration of Trust or By-laws and then current prospectus and statement of additional information. (ii) The number of Cash Management Class shares of the Acquiring Portfolio to be issued (including fractional shares, if any) by the Acquiring Portfolio in exchange for the Transferor Portfolio's assets attributable to the Transferor Portfolio's shares shall be determined by an exchange ratio computed by dividing the net value of the Transferor Portfolio's assets attributable to its shares by the net asset value per share of the Cash Management Class shares of the Acquiring Portfolio, both as determined in accordance with Section 1(c)(i). (iii) All computations of value shall be made by the Custodian in accordance with its regular practice as pricing agent for the Acquiring Portfolio and the Transferor Portfolio. 2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST The Acquiring Trust represents and warrants as follows: (a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to carry on its business as it is now being conducted. The Acquiring Portfolio is a validly existing series of shares of such business trust representing interests therein under the laws of Massachusetts. Each of the Acquiring Portfolio and the Acquiring Trust have all necessary federal, state and local authorization to own all of its properties and assets and to carry on its business as now being conducted. (b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end investment company of the management type; such registration has not been revoked or rescinded and is in full force and effect. A-2 (c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of additional information of the Acquiring Trust, as amended, included in the Acquiring Trust's registration statement on Form N-1A filed with the Securities and Exchange Commission, comply in all material respects with the requirements of the Securities Act of 1933, as amended (the "Securities Act") and the Act and do not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) CAPITALIZATION. The Acquiring Trust has an unlimited number of authorized shares of which as of February 28, 2001 there were no Cash Management Class shares of the Acquiring Portfolio outstanding, and no shares of such Portfolio were held in the treasury of the Acquiring Trust. All of the outstanding shares of the Acquiring Trust have been duly authorized and are validly issued, fully paid and nonassessable (except as disclosed in the Acquiring Trust's prospectus and recognizing that under Massachusetts law, shareholders of an Acquiring Trust portfolio could, under certain circumstances, be held personally liable for the obligations of such Acquiring Trust portfolio). Because the Acquiring Trust is an open-end investment company engaged in the continuous offering and redemption of its shares, the number of outstanding shares may change prior to the Effective Time of the Reorganization. All of the issued and outstanding shares of the Acquiring Portfolio have been offered and sold in compliance in all material respects with applicable registration requirements of the Securities Act and applicable state securities laws. (e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust with respect to the Acquiring Portfolio for the fiscal year ended August 31, 2000, which have been audited by PricewaterhouseCoopers LLP, fairly present the financial position of the Acquiring Portfolio as of the dates thereof and the respective results of operations and changes in net assets for each of the periods indicated in accordance with generally accepted accounting principles ("GAAP"). The financial statements of the Acquiring Trust with respect to the Acquiring Portfolio for the fiscal period ended February 28, 2001 fairly present the financial position of the Acquiring Portfolio as of the dates thereof and the respective results of operations and changes in net assets for each of the periods indicated in accordance with GAAP. (f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares to be issued in connection with the Reorganization will be duly authorized and upon consummation of the Reorganization will be validly issued, fully paid and nonassessable (except as disclosed in the Trust's prospectus and recognizing that under Massachusetts law, shareholders of an Acquiring Trust portfolio could, under certain circumstances, be held personally liable for the obligations of such portfolio). (g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the Acquiring Portfolio, has the power to enter into this Plan and to carry out its obligations hereunder. The execution and delivery of this Plan and the consummation of the transactions contemplated hereby have been duly authorized by the Acquiring Trust's Board of Trustees and no other proceedings by the Acquiring Trust other than those contemplated under this Plan are necessary to authorize its officers to effectuate this Plan and the transactions contemplated hereby. The Acquiring Trust is not a party to or obligated under any provision of its Declaration of Trust or By-laws, or under any indenture or contract provision or any other commitment or obligation, or subject to any order or decree, which would be violated by or which would prevent its execution and performance of this Plan in accordance with its terms. (h) LIABILITIES. There are no liabilities of the Acquiring Portfolio, whether actual or contingent and whether or not determined or determinable, other than liabilities disclosed or provided for in the Acquiring Trust's financial statements with respect to the Acquiring Portfolio and liabilities incurred in the ordinary course of business subsequent to February 28, 2001 or otherwise previously disclosed to the Acquiring Trust with respect to the Acquiring Portfolio, none of which has been materially adverse to the business, assets or results of operations of the Acquiring Portfolio. (i) NO MATERIAL ADVERSE CHANGE. Since February 28, 2001, there has been no material adverse change in the financial condition, results of operations, business, properties or assets of the Acquiring Portfolio, other than those occurring in the ordinary course of business (for these purposes, a decline in net asset value and a decline in net assets due to redemptions do not constitute a material adverse change). (j) LITIGATION. There are no claims, actions, suits or proceedings pending or, to the knowledge of the Acquiring Trust, threatened which would adversely affect the Acquiring Trust or the Acquiring Portfolio's assets or business or which would prevent or hinder consummation of the transactions contemplated hereby, there are no facts which would form the basis for the institution of administrative proceedings against the Acquiring Trust or the Acquiring Portfolio and, to the knowledge of the Acquiring Trust, there are no A-3 regulatory investigations of the Acquiring Trust or the Acquiring Portfolio, pending or threatened, other than routine inspections and audits. (k) CONTRACTS. No default exists under any material contract or other commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio, is subject. (l) TAXES. The federal income tax returns of the Acquiring Trust with respect to the Acquiring Portfolio, and all other income tax returns required to be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have been filed, and all taxes payable pursuant to such returns have been paid. To the knowledge of the Acquiring Trust, no such return is under audit and no assessment has been asserted in respect of any such return. All federal and other taxes owed by the Acquiring Trust with respect to the Acquiring Portfolio have been paid so far as due. The Acquiring Portfolio has elected to qualify and has qualified as a "regulated investment company" under Subchapter M of the Code as of and since its first taxable year and intends to continue to so qualify. (m) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's shareholders (referred to in Section 6(a) hereof), no consents, approvals, authorizations, registrations or exemptions under federal or state laws are necessary for the consummation by the Acquiring Trust of the Reorganization, except such as have been obtained as of the date hereof. 3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST The Transferor Trust represents and warrants as follows: (a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business trust that is duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to carry on its business as it is now being conducted. The Transferor Portfolio is a validly existing series of shares of such business trust representing interests therein under the laws of Massachusetts. Each of Transferor Portfolio and the Transferor Trust has all necessary federal, state and local authorization to own all of its properties and assets and to carry on its business as now being conducted. (b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is registered under the Act as an open-end investment company of the management type; such registration has not been revoked or rescinded and is in full force and effect. (c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statements of additional information of the Transferor Trust, as amended, included in the Transferor Trust's registration statement on Form N-1A filed with the Commission, comply in all material respects with the requirements of the Securities Act and the Act and do not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (d) CAPITALIZATION. The Transferor Trust has an unlimited number of authorized shares of beneficial interest, of which as of February 28, 2001 there were 533,344,000 outstanding shares of the Transferor Portfolio, and no shares of such Portfolio were held in the treasury of the Transferor Trust. All of the outstanding shares of the Transferor Trust have been duly authorized and are validly issued, fully paid and nonassessable (except as disclosed in the Transferor Trust's prospectus and recognizing that under Massachusetts law, shareholders of a Trust portfolio could, under certain circumstances, be held personally liable for the obligations of such Trust portfolio). Because the Transferor Trust is an open-end investment company engaged in the continuous offering and redemption of its shares, the number of outstanding shares may change prior to the Effective Time of the Reorganization. All such shares will, at the Exchange Date, be held by the shareholders of record of the Transferor Portfolio as set forth on the books and records of the Transferor Trust in the amounts set forth therein, and as set forth in any list of shareholders of record provided to the Acquiring Portfolio for purposes of the Reorganization, and no such shareholders of record will have any preemptive rights to purchase any Transferor Portfolio shares, and the Transferor Portfolio does not have outstanding any options, warrants or other rights to subscribe for or purchase any Transferor Portfolio shares (other than any existing dividend reinvestment plans of the Transferor Portfolio or as set forth in this Plan), nor are there outstanding any securities convertible into any shares of the Transferor Portfolio (except pursuant to any existing exchange privileges described in the current prospectus and statement of additional information of the Transferor Trust). All of the Transferor Portfolio's issued and outstanding shares have been offered and sold in compliance in all material respects with applicable registration requirements of the Securities Act and applicable state securities laws. A-4 (e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust with respect to the Transferor Portfolio and for The Prime Money Market Portfolio for the fiscal year ended November 30, 2000 which have been audited by PricewaterhouseCoopers LLP fairly present the financial position of the Transferor Portfolio and The Prime Money Market Portfolio as of the dates thereof and the respective results of operations and changes in net assets for each of the periods indicated in accordance with GAAP. (f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the Transferor Portfolio, has the power to enter into this Plan and to carry out its obligations hereunder. The execution and delivery of this Plan and the consummation of the transactions contemplated hereby have been duly authorized by the Transferor Trust's Board of Trustees and no other proceedings by the Transferor Trust other than those contemplated under this Plan are necessary to authorize its officers to effectuate this Plan and the transactions contemplated hereby. The Transferor Trust is not a party to or obligated under any provision of its Declaration of Trust or By-laws, or under any indenture or contract provision or any other commitment or obligation, or subject to any order or decree, which would be violated by or which would prevent its execution and performance of this Plan in accordance with its terms. (g) LIABILITIES. There are no liabilities of the Transferor Portfolio, whether actual or contingent and whether or not determined or determinable, other than liabilities disclosed or provided for in the Transferor Trust's Financial Statements with respect to the Transferor Portfolio and liabilities incurred in the ordinary course of business subsequent to November 30, 2000 or otherwise previously disclosed to the Transferor Trust with respect to the Transferor Portfolio, none of which has been materially adverse to the business, assets or results of operations of the Transferor Portfolio. (h) NO MATERIAL ADVERSE CHANGE. Since November 30, 2000, there has been no material adverse change in the financial condition, results of operations, business, properties or assets of the Transferor Portfolio, other than those occurring in the ordinary course of business (for these purposes, a decline in net asset value and a decline in net assets due to redemptions do not constitute a material adverse change). (i) LITIGATION. There are no claims, actions, suits or proceedings pending or, to the knowledge of the Transferor Trust, threatened which would adversely affect the Transferor Trust or the Transferor Portfolio's assets or business or which would prevent or hinder consummation of the transactions contemplated hereby, there are no facts which would form the basis for the institution of administrative proceedings against the Transferor Trust or the Transferor Portfolio and, to the knowledge of the Transferor Trust, there are no regulatory investigations of the Transferor Trust or the Transferor Portfolio, pending or threatened, other than routine inspections and audits. (j) CONTRACTS. The Transferor Trust, on behalf of the Transferor Portfolio, is not subject to any contracts or other commitments (other than this Plan) which will not be terminated with respect to the Transferor Portfolio without liability to the Transferor Trust or the Transferor Portfolio as of or prior to the Effective Time of the Reorganization. (k) TAXES. The federal income tax returns of the Transferor Trust with respect to the Transferor Portfolio, and all other income tax returns required to be filed by the Transferor Trust with respect to the Transferor Portfolio, have been, and all taxes payable pursuant to such returns have been paid. To the knowledge of the Transferor Trust, no such return is under audit and no assessment has been asserted in respect of any such return. All federal and other taxes owed by the Transferor Trust with respect to the Transferor Portfolio have been paid so far as due. The Transferor Portfolio has elected to qualify as a "regulated investment company" under Subchapter M of the Code, as of and since its first taxable year, and shall continue to so qualify until the Effective Time of the Reorganization. (l) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's shareholders referred to in Section 6(a) hereof, no consents, approvals, authorizations, registrations or exemptions under federal or state laws are necessary for the consummation by the Transferor Trust of the Reorganization, except such as have been obtained as of the date hereof. 4. COVENANTS OF THE ACQUIRING TRUST The Acquiring Trust covenants to the following: (a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the Acquiring Trust shall file with the Commission a Registration Statement on Form N-14 (the "Registration Statement") under the Securities Act relating to the Acquiring Portfolio Shares issuable hereunder and the proxy statement of the Transferor A-5 Portfolio relating to the meeting of the Transferor Portfolio's shareholders referred to in Section 5(a) herein. At the time the Registration Statement becomes effective, the Registration Statement (i) will comply in all material respects with the provisions of the Securities Act and the rules and regulations of the Commission thereunder (the "Regulations") and (ii) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at the time the Registration Statement becomes effective, at the time of the Transferor Portfolio shareholders' meeting referred to in Section 5(a) hereof, and at the Effective Time of the Reorganization, the prospectus/proxy statement (the "Prospectus") and statement of additional information (the "Statement of Additional Information") included therein, as amended or supplemented by any amendments or supplements filed by the Trust, will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to use all reasonable efforts to effectuate the Reorganization, to continue in operation thereafter, and to obtain any necessary regulatory approvals for the Reorganization. The Acquiring Trust shall furnish such data and information relating to the Acquiring Trust as shall be reasonably requested for inclusion in the information to be furnished to the Transferor Portfolio shareholders in connection with the meeting of the Transferor Portfolio's shareholders for the purpose of acting upon this Plan and the transactions contemplated herein. (c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by this Plan, the Acquiring Trust shall conduct the business of the Acquiring Portfolio in the ordinary course until the consummation of the Reorganization, it being understood that such ordinary course of business will include the declaration and payment of customary dividends and distributions. 5. COVENANTS OF THE TRANSFEROR TRUST The Transferor Trust covenants to the following: (a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor Trust shall call and hold a meeting of the shareholders of the Transferor Portfolio for the purpose of acting upon this Plan and the transactions contemplated herein. (b) PORTFOLIO SECURITIES. With respect to the assets to be transferred in accordance with Section 1(a), the Transferor Portfolio's assets shall consist of all property and assets of any nature whatsoever, including, without limitation, all cash, cash equivalents, securities, claims and receivables (including dividend and interest receivables) owned, and any deferred or prepaid expenses shown as an asset on the Transferor Trust's books maintained on behalf of the Transferor Portfolio. At least five (5) business days prior to the Exchange Date, the Transferor Portfolio will provide the Acquiring Trust, for the benefit of the Acquiring Portfolio, with a list of its assets and a list of its stated liabilities. The Transferor Portfolio shall have the right to sell any of the securities or other assets shown on the list of assets prior to the Exchange Date but will not, without the prior approval of the Acquiring Trust, on behalf of the Acquiring Portfolio, acquire any additional securities other than securities which the Acquiring Portfolio is permitted to purchase, pursuant to its investment objective and policies or otherwise (taking into consideration its own portfolio composition as of such date). In the event that the Transferor Portfolio holds any investments that the Acquiring Portfolio would not be permitted to hold, the Transferor Portfolio will dispose of such securities prior to the Exchange Date to the extent practicable, to the extent permitted by its investment objective and policies and to the extent that its shareholders would not be materially affected in an adverse manner by such a disposition. In addition, the Transferor Trust will prepare and deliver immediately prior to the Effective Time of the Reorganization, a Statement of Assets and Liabilities of the Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule"). All securities to be listed in the Schedule for the Transferor Portfolio as of the Effective Time of the Reorganization will be owned by the Transferor Portfolio free and clear of any liens, claims, charges, options and encumbrances, except as indicated in such Schedule, and, except as so indicated, none of such securities is or, after the Reorganization as contemplated hereby, will be subject to any restrictions, legal or contractual, on the disposition thereof (including restrictions as to the public offering or sale thereof under the Securities Act) and, except as so indicated, all such securities are or will be readily marketable. (c) REGISTRATION STATEMENT. In connection with the preparation of the Registration Statement, the Transferor Trust will cooperate with the Acquiring Trust and will furnish to the Acquiring Trust the information relating to the Transferor Portfolio required by the Securities Act and the Regulations to be set forth in the Registration Statement (including the Prospectus and Statement of Additional Information). At A-6 the time the Registration Statement becomes effective, the Registration Statement, insofar as it relates to the Transferor Portfolio, (i) will comply in all material respects with the provisions of the Securities Act and the Regulations and (ii) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at the time the Registration Statement becomes effective, at the time of the Transferor Portfolio's shareholders' meeting referred to in Section 5(a) and at the Effective Time of the Reorganization, the Prospectus and Statement of Additional Information, as amended or supplemented by any amendments or supplements filed by the Transferor Trust, insofar as they relate to the Transferor Portfolio, will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall apply only to statements in or omissions from the Registration Statement, Prospectus or Statement of Additional Information made in reliance upon and in conformity with information furnished by the Transferor Portfolio for use in the registration statement, prospectus or statement of additional information as provided in this Section 5(c). (d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust agrees to use all reasonable efforts to effectuate the Reorganization and to obtain any necessary regulatory approvals for the Reorganization. (e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by this Plan, the Transferor Trust shall conduct the business of the Transferor Portfolio in the ordinary course until the consummation of the Reorganization, it being understood that such ordinary course of business will include the declaration and payment of customary dividends and distributions. (f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in any case within 60 days after the Exchange Date, the Transferor Trust on behalf of the Transferor Portfolio, shall prepare a statement of the earnings and profits of the Transferor Portfolio for federal income tax purposes, and of any capital loss carryovers and other items that the Acquiring Portfolio will succeed to and take into account as a result of Section 381 of the Code. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST The obligations of the Transferor Trust with respect to the consummation of the Reorganization are subject to the satisfaction of the following conditions: (a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and the transactions contemplated by the Reorganization shall have been approved by the requisite vote of the shares of the Transferor Portfolio entitled to vote on the matter ("Transferor Shareholder Approval"). (b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust shall have complied with each of its covenants contained herein, each of the representations and warranties contained herein shall be true in all material respects as of the Effective Time of the Reorganization (except as otherwise contemplated herein), and there shall have been no material adverse change (as described in Section 2(i)) in the financial condition, results of operations, business, properties or assets of the Acquiring Portfolio since August 31, 2000. (c) REGULATORY APPROVAL. The Registration Statement shall have been declared effective by the Commission and no stop orders under the Securities Act pertaining thereto shall have been issued, and all other approvals, registrations, and exemptions under federal and state laws considered to be necessary shall have been obtained (collectively, the "Regulatory Approvals"). (d) TAX OPINION. The Transferor Trust shall have received the opinion of Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed to and in form and substance satisfactory to the Transferor Trust, as to certain of the federal income tax consequences under the Code of the Reorganization, insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio, and to shareholders of the Transferor Portfolio (the "Tax Opinion"). For purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely exclusively and without independent verification, as to factual matters, upon the statements made in this Plan, the Prospectus and Statement of Additional Information, and upon such other written representations as the President or Treasurer of the Transferor Trust will have verified as of the Effective Time of the Reorganization. The Tax Opinion will be to the effect that, based on the facts and assumptions stated therein, for federal income tax purposes: (i) the Reorganization will constitute a reorganization within the meaning of section 368(a)(1) of the Code with respect to the Transferor Portfolio and the Acquiring Portfolio; (ii) no gain or loss will be recognized by any of the Transferor Portfolio or the Acquiring Portfolio upon the transfer of all the assets and liabilities, if any, of the Transferor Portfolio to the Acquiring Portfolio A-7 solely in exchange for shares of the Acquiring Portfolio or upon the distribution of the shares of the Acquiring Portfolio to the holders of the shares of the Transferor Portfolio solely in exchange for all of the shares of the Transferor Portfolio; (iii) no gain or loss will be recognized by shareholders of the Transferor Portfolio upon the exchange of shares of such Transferor Portfolio solely for shares of the Acquiring Portfolio; (iv) the holding period and tax basis of the shares of the Acquiring Portfolio received by each holder of shares of the Transferor Portfolio pursuant to the Reorganization will be the same as the holding period and tax basis of shares of the Transferor Portfolio held by such holder immediately prior to the Reorganization (provided the shares of the Transferor Portfolio were held as a capital asset on the date of the Reorganization); and (v) the holding period and tax basis of the assets of the Transferor Portfolio acquired by the Acquiring Portfolio will be the same as the holding period and tax basis of those assets to the Transferor Portfolio immediately prior to the Reorganization. (e) CONCURRENT REORGANIZATION. The Reorganization of each of J.P. Morgan Prime Money Market Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of J.P. Morgan Institutional Funds, into the Acquiring Portfolio shall have been consummated. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST The obligations of the Acquiring Trust with respect to the consummation of the Reorganization are subject to the satisfaction of the following conditions: (a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor Shareholder Approval shall have been obtained. (b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall have complied with each of its covenants contained herein, each of the representations and warranties contained herein shall be true in all material respects as of the Effective Time of the Reorganization (except as otherwise contemplated herein), and there shall have been no material adverse change (as described in Section 3(h)) in the financial condition, results of operations, business, properties or assets of the Transferor Portfolio since November 30, 2000. (c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring Portfolio in the Reorganization shall have been approved for acquisition by J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM"), in its capacity as investment adviser to the Acquiring Portfolio, as consistent with the investment policies of the Acquiring Portfolio. (d) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained. (e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the Transferor Portfolio shall have distributed to the shareholders of the Transferor Portfolio all of the Transferor Portfolio's investment company taxable income (determined without regard to the deduction for dividends paid) as defined in Section 852(b)(2) of the Code for its taxable year ending on the Exchange Date and all of its net capital gain as such term is used in Section 852(b)(3) of the Code, after reduction by any capital loss carry forward, for its taxable year ending on the Exchange Date. (f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion. (g) CONCURRENT REORGANIZATION. The reorganization of each of J.P. Morgan Prime Money Market Fund, a series of J.P. Morgan Funds, and J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Cash Money Market Fund, J.P. Morgan Institutional Direct Prime Money Market Fund and J.P. Morgan Prime Money Market Reserves Fund, each a series of J.P. Morgan Institutional Funds, into the Acquiring Portfolio shall have been consummated. 8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND REPRESENTATIONS (a) AMENDMENTS. The parties hereto may, by agreement in writing authorized by their respective Boards of Trustees amend this Plan at any time before or after approval hereof by the shareholders of the Transferor Portfolio, but after such approval, no amendment shall be made which substantially changes the terms hereof. (b) WAIVERS. At any time prior to the Effective Time of the Reorganization, either the Transferor Trust or the Acquiring Trust may by written instrument signed by it (i) waive any inaccuracies in the A-8 representations and warranties made to it contained herein and (ii) waive compliance with any of the covenants or conditions made for its benefit contained herein, except that conditions set forth in Sections 6(c) and 7(d) may not be waived. (c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on behalf of the Transferor Portfolio, may terminate this Plan with respect to the Transferor Portfolio at any time prior to the Effective Time of the Reorganization by notice to the Acquiring Trust and JPMFAM if (i) a material condition to the performance of the Transferor Trust hereunder or a material covenant of the Acquiring Trust contained herein shall not be fulfilled on or before the date specified for the fulfillment thereof or (ii) a material default or material breach of this Plan shall be made by the Acquiring Trust. In addition, this Plan may be terminated by the Transferor Trust at any time prior to the Effective Time of the Reorganization, whether before or after approval of this Plan by the shareholders of the Transferor Portfolio, without liability on the part of any party hereto, its Trustees, officers or shareholders or J.P. Morgan Investment Management Inc. ("JPMIM") on notice to the other parties in the event that the Board of Trustees determines that proceeding with this Plan is not in the best interests of the shareholders of the Transferor Portfolio. (d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring Portfolio at any time prior to the Effective Time of the Reorganization by notice to the Transferor Trust and JPMIM if (i) a material condition to the performance of the Acquiring Trust hereunder or a material covenant of the Transferor Trust contained herein shall not be fulfilled on or before the date specified for the fulfillment thereof or (ii) a material default or material breach of this Plan shall be made by the Transferor Trust. In addition, this Plan may be terminated by the Acquiring Trust at any time prior to the Effective Time of the Reorganization, whether before or after approval of this Plan by the shareholders of the Transferor Portfolio, without liability on the part of any party hereto, its Trustees, officers or shareholders or JPMIM on notice to the other parties in the event that the Board of Trustees determines that proceeding with this Plan is not in the best interests of the shareholders of the Acquiring Portfolio. (e) SURVIVAL. No representations, warranties or covenants in or pursuant to this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan, shall survive the Reorganization. 9. EXPENSES The expenses of the Reorganization will be borne by J.P. Morgan Chase & Co. ("JPMC"). Such expenses include, without limitation, (i) expenses incurred in connection with the entering into and the carrying out of the provisions of this Plan; (ii) expenses associated with the preparation and filing of the Registration Statement; (iii) fees and expenses of preparing and filing such forms as are necessary under any applicable state securities laws in connection with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii) legal fees and (viii) solicitation costs relating to the Reorganization. In addition, JPMC or an affiliate will waive fees payable to it or reimburse expenses to the extent necessary such that the actual (post-waiver) total expense ratios of the Select Class, Reserve Class, Agency Class, Cash Management Class, Premier Class, and Institutional Class Shares of the Acquiring Portfolio are not higher than those as set forth in the Registration Statement for a period of three years, or one year with respect to the Class B, Class C and Morgan Class Shares, after the Exchange Date. 10. NOTICES Any notice, report, statement or demand required or permitted by any provision of this Plan shall be in writing and shall be given by hand, certified mail or by facsimile transmission, shall be deemed given when received and shall be addressed to the parties hereto at their respective addresses listed below or to such other persons or addresses as the relevant party shall designate as to itself from time to time in writing delivered in like manner: if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio): 1211 Avenue of the Americas, 41st Floor New York, New York 10036 A-9 with a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: Sarah E. Cogan, Esq. if to the Transferor Trust (for itself or on behalf of the Transferor Portfolio): 60 State Street Suite 1300 Boston, Massachusetts 02109 with a copy to: Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attention: John E. Baumgardner, Jr., Esq. if to the adviser of the Transferor Trust: 522 Fifth Avenue New York, NY 10036 if to the adviser of the Acquiring Trust: 522 Fifth Avenue New York, NY 10036 if to J.P. Morgan Chase & Co.: 522 Fifth Avenue New York, NY 10036 11. RELIANCE All covenants and agreements made under this Plan shall be deemed to have been material and relied upon by the Transferor Trust and the Acquiring Trust notwithstanding any investigation made by such party or on its behalf. 12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT (a) The section and paragraph headings contained in this Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of this Plan. (b) This Plan may be executed in any number of counterparts, each of which shall be deemed an original. (c) This Plan shall be governed by and construed in accordance with the laws of The State of New York. (d) This Plan shall bind and inure to the benefit of the Transferor Trust, the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Plan. (e) The name "J.P. Morgan Institutional Funds" is the designation of its Trustees under a Declaration of Trust dated November 4, 1992, as amended, and all persons dealing with the Transferor Trust must look solely to the Transferor Trust's property for the enforcement of any claims against the Transferor Trust, as none of the Transferor Trustees, officers, agents or shareholders assumes any personal liability for obligations entered into on behalf of the Transferor Trust. No series of the Transferor Trust shall be liable for claims against any other series of the Transferor Trust. (f) The name "Mutual Fund Trust" is the designation of its Trustees under a Declaration of Trust dated February 1, 1994, as amended, and all persons dealing with the Acquiring Trust must look solely to the A-10 Acquiring Trust's property for the enforcement of any claims against the Acquiring Trust, as none of the Acquiring Trustees, officers, agents or shareholders assumes any personal liability for obligations entered into on behalf of the Acquiring Trust. No series of the Acquiring Trust shall be liable for claims against any other series of the Acquiring Trust. IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first above written. J.P. MORGAN INSTITUTIONAL FUNDS on behalf of J.P. Morgan Prime Cash Management Fund By: /s/ Sharon Weinberg -------------------------------------------- Name: Sharon Weinberg Title: Vice President and Secretary MUTUAL FUND TRUST on behalf of JPMorgan Prime Money Market Fund II By: /s/ Fergus Reid, III -------------------------------------------- Name: Fergus Reid, III Title: Chairman Agreed and acknowledged with respect to Section 9: J.P. MORGAN CHASE & CO. By: /s/ George Gatch -------------------------------------------- Name: George Gatch Title: Managing Director
A-11 STATEMENT OF ADDITIONAL INFORMATION (SPECIAL MEETING OF SHAREHOLDERS OF J.P. MORGAN PRIME CASH MANAGEMENT FUND, A SERIES OF J.P. MORGAN INSTITUTIONAL FUNDS) This Statement of Additional Information is not a prospectus but should be read in conjunction with the Combined Prospectus/Proxy Statement dated May 12, 2001 for the Special Meeting of Shareholders of J.P. Morgan Prime Cash Management Fund (the "Merging Fund"), a series of J.P. Morgan Institutional Funds ("JPMIF"), to be held on July 3, 2001. Copies of the Combined Prospectus/Proxy Statement may be obtained at no charge by calling the Merging Fund at 1-800-766-7722. Unless otherwise indicated, capitalized terms used herein and not otherwise defined have the same meanings as are given to them in the Combined Prospectus/Proxy Statement. Further information about the Surviving Fund and the Merging Fund is contained in each of MFT's and JPMIF's Statements of Additional Information, which are incorporated herein by reference. The date of this Statement of Additional Information is May 12, 2001. 1 GENERAL INFORMATION The Shareholders of the Merging Fund are being asked to consider and vote on two proposals. With respect to an Agreement and Plan of Reorganization (the "Reorganization Plan") dated as of __________, 2001 by and among JPMIF, on behalf of the Merging Fund, MFT, on behalf of the Surviving Fund, and JPMC, and the transactions contemplated thereby, the Reorganization Plan contemplates the transfer of all of the assets and liabilities of the Merging Fund to the Surviving Fund in exchange for shares issued by MFT in the Surviving Fund that will have an aggregate net asset value equal to the aggregate net asset value of the shares of the Merging Fund that are outstanding immediately before the Effective Time of the Reorganization. Following the exchange, the Merging Fund will make a liquidating distribution of the Surviving Fund shares to its Shareholders, so that a holder of shares in the Merging Fund will receive Cash Management Class shares of the Surviving of equal value, plus the right to receive any unpaid dividends and distributions that were declared before the Effective Time of the Reorganization. At the Meeting, shareholders will also be asked to consider and vote upon the election of Trustees of JPMIF. A Special Meeting of Shareholders of the Merging Fund to consider the proposals and the related transaction will be held at the offices of J.P. Morgan Chase & Co., 1211 Avenue of the Americas, 41st Floor, New York, NY, on July 3, 2001 at 9:00 a.m., Eastern time. For further information about the transaction, see the Combined Prospectus/Proxy Statement. 2 FINANCIAL STATEMENTS The audited financial statements and notes thereto of the Merging Fund and the Master Portfolio contained in its Annual Report dated November 30, 2000 are incorporated by reference into this Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The audited financial statements and notes thereto of the Surviving Fund contained in its Annual Report dated August 31, 2000 are incorporated by reference into this Statement of Additional Information related to this Combined Prospectus/Proxy Statement. The financial statements and notes thereto which appear in each of the Merging Fund's and the Surviving Fund's Annual Report have been audited by PricewaterhouseCoopers LLP, whose reports thereon also appear in such Annual Reports and are also incorporated herein by reference. The financial statements and notes thereto for the Merging Fund and the Master Portfolio for the fiscal year ended November 30, 2000 and for the Surviving Fund for the fiscal year ended August 31, 2000 have been incorporated herein by reference in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on their authority as experts in auditing and accounting. The unaudited financial highlights, financial statements and notes thereto of the Surviving Fund for the fiscal period ended February 28, 2001 are incorporated by reference herein and into the Statement of Additional Information related to this Combined Prospectus/Proxy Statement. 3 PRO FORMA FINANCIAL STATEMENTS THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- -------------------------------- CERTIFICATES OF DEPOSIT 8.06% ------------------------------- 125,000 125,000 Banc One NA, 5.67%, $ - $125,000 $125,000 5/7/2001 Banca Commerciale Italiana (Italy), 100,000 100,000 (Yankee), 5.75%, 4/9/2001 100,000 100,000 Banco Santander Central Hispano SA (Spain), 50,000 50,000 (Yankee), 6.50%, 6/6/2001 50,000 50,000 Bank Austria AG, Floating Rate, (Austria), (Yankee), 75,000 200,000 275,000 5.63%, 7/16/2001 74,994 199,978 274,972 Bank of Nova Scotia, 50,000 50,000 5.47%, 4/23/2001 (Canada) 50,000 50,000 100,000 100,000 5.53%, 4/27/2001 (Canada) 100,000 100,000 Bank One NA, 70,000 70,000 5.13%, 7/17/2001 70,000 70,000 40,000 40,000 6.65%, 3/22/2001 40,000 40,000 Barclays Bank PLC (United Kingdom), (Yankee), 120,000 120,000 5.53%, 4/10/2001 119,973 119,973 Floating Rate, 5.57%, 260,000 260,000 12/12/2001 259,941 259,941 Floating Rate, 5.59%, 210,000 210,000 9/24/2001 209,937 209,937 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 100,000 100,000 5.58%, 4/27/2001 100,000 100,000 Bayerische Landesbank Girozentrale, 5.22%, 150,000 145,000 295,000 2/20/2002 (Germany) 149,958 144,959 294,917 Canadian Imperial Bank, 100,000 100,000 5.51%, 3/6/2001 (Canada) 100,000 100,000 Commerzbank AG, 7.00%, 25,000 25,000 7/17/2001 (Germany) 25,158 25,158 Credit Agricole Indosuez SA (France), (Yankee), 141,000 101,000 242,000 5.23%, 2/20/2002 140,974 100,981 241,955 Credit Communal de Belgique, 7.06%, 20,000 20,000 5/3/2001 (Belgium) 19,999 19,999 Deutsche Bank AG, (Germany), (Yankee), 150,000 150,000 6.73%, 3/16/2001 149,996 149,996 Dexia Bank (Belgium), 23,600 23,600 5.59%, 4/11/2001 23,602 23,602 Dresdner Bank, 5.27%, 125,000 125,000 7/16/2001 (Germany) 125,009 125,009 Landesbank Baden Wurttenberg, 5.74%, 75,000 75,000 4/9/2001 (Germany) 75,000 75,000 Landesbank Hessen-Thueringen, 205,000 205,000 7.14%, 5/8/2001 (Germany) 204,997 204,997 Landesbank Hessen-Thuringen Girozentrale (Germany), (Yankee), 75,000 75,000 6.54%, 4/6/2001 75,000 75,000 110,000 110,000 6.89%, 4/30/2001 109,997 109,997 Lloyds Bank Plc, 7.20%, 160,000 160,000 6/15/2001(United Kingdom) 159,987 159,987 Rabobank Nederland NV, 6.66%, 105,000 105,000 3/9/2001(Netherlands) 104,999 104,999 Rabobank Nederland NV, 7.05%, 100,000 100,000 5/2/2001(Netherlands) 99,995 99,995 Societe Generale, 5.52%, 32,800 32,800 4/9/2001(France) 32,799 32,799 Suntrust Bank Atlanta, 95,000 95,000 6.77%, 4/18/2001 95,002 95,002 Svenska Handelsbanken, Inc. (Sweden), (Yankee), 50,000 40,000 90,000 5.12%, 8/2/2001 49,996 39,997 89,993 Toronto Dominion Bank, 20,000 20,000 5.53%, 4/9/2001(Canada) 19,999 19,999 UBS (Switzerland) (Yankee), 100,000 100,000 5.10%, 8/2/2001 99,983 99,983
4 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 130,000 130,000 6.88%, 4/30/2001 129,996 129,996 40,000 40,000 7.03%, 7/19/2001 39,996 39,996 Westdeutsche Landesbank Girozentrale (Germany), (Yankee), 6.66%, 100,000 100,000 11/16/2001 100,005 100,005 World Savings Bank, 160,000 160,000 5.32%, 5/31/2001 160,000 160,000 ------------------------------------ ------------- TOTAL CERTIFICATES OF DEPOSIT 1,950,754 2,127,453 - 4,078,207 ------------------------------- COMMERCIAL PAPER 50.36% ------------------------------- Abbey National North America Corp. (United Kingdom), 170,000 170,000 5.20%, 8/20/2001 165,882 165,882 168,250 168,250 5.40%, 4/24/2001 166,865 166,865 Alliance & Leicester Plc (United Kingdom), 50,000 50,000 5.18%, 4/23/2001 49,601 49,601 100,000 100,000 5.19%, 4/24/2001 99,187 99,187 50,000 50,000 5.19%, 4/25/2001 49,587 49,587 25,000 25,000 5.19%, 4/26/2001 24,790 24,790 30,000 30,000 5.34%, 3/12/2001 29,942 29,942 50,000 50,000 5.34%, 3/13/2001 49,894 49,894 Allied Irish Banks North America (Ireland), 85,000 85,000 5.62%, 3/19/2001 84,761 84,761 70,000 70,000 5.62%, 4/9/2001 69,574 69,574 Alpine Securitization Corp., 40,500 40,500 5.25%, 3/22/2001 40,370 40,370 100,000 100,000 5.52%, 3/22/2001 99,679 99,679 143,191 143,191 5.52%, 3/23/2001 142,710 142,710 Amstel Funding Corp., 30,000 30,000 5.12%, 5/2/2001 29,727 29,727 50,000 50,000 5.32%, 3/16/2001 49,885 49,885 152,000 152,000 5.37%, 5/9/2001 150,456 150,456 95,000 95,000 5.56%, 3/7/2001 94,912 94,912 48,000 48,000 6.67%, 3/15/2001 47,878 47,878 Amsterdam Funding Corp., 125,000 125,000 5.26%, 3/21/2001 124,620 124,620 70,000 70,000 5.34%, 3/12/2001 69,883 69,883 25,000 25,000 5.43%, 4/4/2001 24,873 24,873 50,000 50,000 5.51%, 3/7/2001 49,954 49,954 Aspen Funding Corp., 45,000 45,000 5.32%, 3/16/2001 44,894 44,894 34,085 34,085 5.34%, 3/12/2001 34,028 34,028 Asset Portfolio Funding 37,300 37,300 Corp., 6.47%, 3/16/2001 37,201 37,201 Asset Securitization Corp., 50,000 50,000 6.49%, 3/7/2001 49,953 49,953 3,000 3,000 6.49%, 4/27/2001 2,974 2,974 Associates Corp. of North America, 20,000 20,000 6.68%, 3/2/2001 19,996 19,996 109,000 109,000 ECN, 6.50%, 3/2/2001 108,981 108,981 Associates First Capital Corp., 25,000 25,000 5.26%, 3/21/2001 24,924 24,924 25,000 25,000 5.27%, 3/20/2001 24,928 24,928 11,000 11,000 5.32%, 3/16/2001 10,971 10,971 Atlantis One Funding Corp.,
5 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 35,806 35,806 5.13%, 5/9/2001 35,446 35,446 113,295 113,295 5.16%, 5/4/2001 112,239 112,239 50,000 50,000 5.30%, 5/4/2001 49,534 49,534 50,000 50,000 5.31%, 5/4/2001 49,534 49,534 Banco B.I. Creditanstalt SA (United Kingdom), 15,000 15,000 5.01%, 8/22/2001 14,638 14,638 25,000 25,000 6.73%, 3/9/2001 24,964 24,964 Banco Rio De La Plata SA (Argentina), 6.78%, 20,000 20,000 3/8/2001 19,975 19,975 Banco Santander Central Hispano SA (Spain), 50,000 50,000 (Yankee), 5.17%, 8/6/2001 48,894 48,894 Bank of America Corp., 40,000 40,000 4.91%, 7/26/2001 39,200 39,200 29,000 29,000 5.34%, 3/7/2001 28,969 28,969 Bank of America N.A., 75,000 75,000 6.52%, 5/10/2001 74,075 74,075 250,000 250,000 6.69%, 3/12/2001 249,505 249,505 Banque & Caisse d' Epargne de l'Etat (Luxemburg), 38,000 38,000 5.00%, 8/15/2001 37,103 37,103 20,000 20,000 5.17%, 4/9/2001 19,869 19,869 100,000 100,000 4.93%, 8/30/2001 97,568 97,568 Banque Generale du Luxembourg SA (Luxemburg), 100,000 100,000 4.84%, 8/27/2001 97,608 97,608 50,000 50,000 5.50%, 7/16/2001 48,982 48,982 Barton Capital Corp., 31,308 31,308 5.33%, 3/15/2001 31,241 31,241 49,485 49,485 5.33%, 3/2/2001 49,477 49,477 100,000 100,000 5.34%, 3/8/2001 99,893 99,893 115,000 115,000 5.50%, 3/7/2001 114,895 114,895 74,366 74,366 5.52%, 3/13/2001 74,230 74,230 140,154 140,154 5.52%, 3/7/2001 140,026 140,026 BASF AG (Germany), 53,000 53,000 5.09%, 6/5/2001 52,112 52,112 75,000 75,000 6.68%, 3/29/2001 74,623 74,623 Bavaria TRR Corp., 100,000 100,000 5.18%, 4/17/2001 99,159 99,159 49,212 49,212 5.34%, 3/12/2001 49,129 49,129 15,876 15,876 5.51%, 3/5/2001 15,866 15,866 Bavaria Universal Funding Co., Floating 50,000 50,000 Rate, 5.54%, 8/10/2001 50,000 50,000 Bayerische Hypo Vereinsbank (Germany), 75,000 75,000 5.60%, 3/13/2001 74,860 74,860 90,000 90,000 5.60%, 5/21/2001 88,811 88,811 BBL North American Funding Corp., 5.20%, 50,000 50,000 3/26/2001 49,806 49,806 BCI Funding Corp., 100,000 100,000 5.41%, 4/24/2001 99,189 99,189 Beta Finance Corp., Inc. (Channel Islands), 50,000 50,000 6.73%, 3/22/2001 49,810 49,810 Bills Securitization 82,500 82,500 LTD, 5.33%, 5/8/2001 81,680 81,680 Blue Ridge Asset Funding Corp., 23,000 23,000 5.34%, 3/7/2001 22,979 22,979 83,478 83,478 5.48%, 3/23/2001 83,199 83,199 50,015 50,015 5.52%, 3/14/2001 49,916 49,916
6 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 23,000 23,000 5.53%, 3/9/2001 22,972 22,972 Bradford & Bingley Plc (United Kingdom), 40,000 40,000 6.38%, 3/8/2001 39,950 39,950 25,000 25,000 6.38%, 4/4/2001 24,867 24,867 50,000 50,000 6.38%, 4/9/2001 49,695 49,695 Brahms Funding Corp., 90,000 90,000 5.27%, 3/20/2001 89,737 89,737 40,000 40,000 5.45%, 4/25/2001 39,670 39,670 140,000 140,000 5.61%, 3/26/2001 139,459 139,459 Canada (Government of), 65,000 65,000 5.08%, 6/7/2001 63,885 63,885 35,000 35,000 6.52%, 6/7/2001 34,400 34,400 CBA Finance, 5.45%, 47,650 47,650 4/11/2001 47,354 47,354 CC USA Inc., 30,000 30,000 5.00%, 8/15/2001 29,290 29,290 35,000 35,000 5.02%, 8/6/2001 34,229 34,229 Certain Funding Corp., 45,815 45,815 5.46%, 5/1/2001 45,397 45,397 59,000 59,000 6.51%, 3/12/2001 58,885 58,885 Charta Corp., 5.34%, 50,000 50,000 3/14/2001 49,901 49,901 Christiania Capital 40,000 40,000 Corp., 4.93%, 8/28/2001 39,038 39,038 Ciesco L.P., 31,000 31,000 5.18%, 4/12/2001 30,807 30,807 30,000 30,000 5.18%, 4/18/2001 29,786 29,786 50,000 50,000 5.39%, 4/12/2001 49,688 49,688 50,000 50,000 5.39%, 4/18/2001 49,643 49,643 Citibank Capital Markets Assets LLC, 5.34%, 65,000 65,000 3/14/2001 64,848 64,848 Citibank Credit Card Master Trust, 100,000 100,000 0.00%, 3/2/2001 99,985 99,985 100,000 100,000 0.00%, 3/7/2001 99,908 99,908 Citicorp, 300,000 300,000 5.51%, 3/2/2001 299,955 299,955 200,000 200,000 5.52%, 3/5/2001 199,878 199,878 Clipper Receivables 105,000 105,000 Corp., 5.26%, 3/21/2001 104,680 104,680 Comision Federal De Electricdad (Mexico), 150,000 150,000 6.48%, 3/20/2001 149,495 149,495 Commerzbank US Finance, 95,500 95,500 5.50%, 3/13/2001 95,325 95,325 100,000 100,000 5.50%, 3/7/2001 99,908 99,908 100,000 100,000 5.50%, 3/8/2001 99,893 99,893 200,000 200,000 5.53%, 3/13/2001 199,633 199,633 Compass Securitization LLC, 7,191 7,191 5.19%, 4/25/2001 7,131 7,131 56,000 56,000 5.25%, 3/22/2001 55,820 55,820 44,424 44,424 5.34%, 3/12/2001 44,337 44,337 30,000 30,000 5.34%, 3/15/2001 29,925 29,925 120,000 120,000 5.52%, 3/16/2001 119,725 119,725 60,000 60,000 6.50%, 3/15/2001 59,851 59,851 Corporate Asset Funding, 60,000 60,000 5.17%, 4/3/2001 59,704 59,704 Corporate Receivables 60,000 60,000 Corp., 5.32%, 5/10/2001 59,388 59,388 Credit Suisse First Boston, Inc., 100,000 100,000 6.71%, 3/12/2001 99,802 99,802
7 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 75,000 75,000 6.71%, 3/14/2001 74,824 74,824 70,000 70,000 5.24%, 7/20/2001 68,594 68,594 Credit Suisse First Boston, Inc. (Switzerland), 40,000 40,000 5.02%, 8/6/2001 39,122 39,122 40,000 40,000 5.12%, 5/25/2001 39,496 39,496 50,000 50,000 5.12%, 5/29/2001 49,336 49,336 40,000 40,000 5.18%, 4/12/2001 39,699 39,699 75,000 75,000 5.18%, 4/20/2001 74,327 74,327 26,000 26,000 5.33%, 3/5/2001 25,981 25,981 50,000 50,000 5.34%, 3/13/2001 49,892 49,892 Credit Suisse First Boston International, (Switzerland), 36,000 36,000 6.63%, 4/16/2001 35,703 35,703 20,000 20,000 6.66%, 5/7/2001 19,760 19,760 CXC Inc., 105,000 105,000 5.11%, 5/15/2001 103,596 103,596 70,000 70,000 5.17%, 4/2/2001 69,615 69,615 100,000 100,000 5.18%, 4/23/2001 99,199 99,199 50,000 50,000 5.19%, 4/24/2001 49,592 49,592 50,000 50,000 5.19%, 4/27/2001 49,568 49,568 174,000 174,000 5.34%, 3/8/2001 173,783 173,783 75,000 75,000 5.59%, 4/4/2001 74,609 74,609 Dakota Certificate Program (Citibank Credit Card Master Trust I), 147,956 147,956 5.51%, 3/7/2001 147,821 147,821 Danske Corp. (Denmark), 80,000 80,000 5.01%, 8/20/2001 78,064 78,064 75,000 75,000 5.34%, 3/13/2001 74,860 74,860 Den Danske Corp. (Denmark), 6.37%, 40,000 40,000 3/14/2001 39,908 39,908 Den Norske Bank (Norway), 75,000 75,000 5.03%, 8/2/2001 73,386 73,386 50,000 50,000 5.13%, 5/11/2001 49,416 49,416 162,000 162,000 5.17%, 5/2/2001 160,535 160,535 Depfa Bank Europe Plc (United Kingdom), 65,000 65,000 5.09%, 6/6/2001 63,975 63,975 125,000 125,000 5.13%, 5/10/2001 123,459 123,459 35,000 35,000 5.16%, 5/4/2001 34,605 34,605 65,000 65,000 5.17%, 4/4/2001 64,604 64,604 100,000 100,000 5.17%, 5/1/2001 98,921 98,921 40,000 40,000 5.18%, 4/12/2001 39,741 39,741 18,000 18,000 5.18%, 4/16/2001 17,869 17,869 75,000 75,000 5.18%, 4/17/2001 74,385 74,385 25,000 25,000 5.27%, 3/20/2001 24,916 24,916 42,839 42,839 5.28%, 3/19/2001 42,703 42,703 125,000 125,000 5.32%, 3/16/2001 124,668 124,668 75,000 75,000 5.33%, 3/6/2001 74,942 74,942 75,500 75,500 5.34%, 3/13/2001 75,340 75,340 Deutsche Bank Financial Inc. (Germany), 5.16%, 193,500 193,500 5/4/2001 191,467 191,467 Dexia CLF Finance Co. (France), 100,000 100,000 5.60%, 3/20/2001 99,704 99,704 50,000 50,000 5.60%, 4/27/2001 49,569 49,569 Dexia Delaware LLC, 70,000 70,000 5.16%, 8/10/2001 68,416 68,416 Diageo Plc (United Kingdom), 5.17%, 50,000 50,000 4/10/2001 49,664 49,664
8 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Dorada Finance, Inc., 47,000 47,000 5.44%, 4/19/2001 46,656 46,656 30,890 30,890 5.47%, 4/24/2001 30,640 30,640 31,000 31,000 5.47%, 4/25/2001 30,744 30,744 40,500 40,500 5.47%, 4/30/2001 40,136 40,136 Dresdner U.S. Finance Inc. (Germany), 5.34%, 10,000 10,000 3/12/2001 9,983 9,983 Edison Asset Securitization LLC, 100,000 100,000 5.34%, 3/7/2001 99,906 99,906 80,000 80,000 5.34%, 3/9/2001 79,900 79,900 150,000 150,000 5.50%, 3/6/2001 149,886 149,886 Edison Asset Securitization LLC, 150,000 150,000 5.50%, 3/7/2001 149,863 149,863 Enterprise Funding Corp., 38,235 38,235 6.52%, 3/9/2001 38,180 38,180 75,274 75,274 6.52%, 3/15/2001 75,088 75,088 31,725 31,725 6.52%, 3/19/2001 31,622 31,622 5,007 5,007 6.52%, 4/25/2001 4,965 4,965 Fairway Finance Corp., 45,000 45,000 4.89%, 8/23/2001 43,937 43,937 15,000 15,000 5.01%, 8/8/2001 14,664 14,664 6,392 6,392 5.48%, 4/16/2001 6,348 6,348 40,000 40,000 6.48%, 3/15/2001 39,901 39,901 Falcon Asset Securitization Corp., 37,955 37,955 5.33%, 3/15/2001 37,874 37,874 75,000 75,000 5.34%, 3/7/2001 74,931 74,931 45,000 45,000 5.51%, 3/13/2001 44,916 44,916 171,000 171,000 5.64%, 3/13/2001 170,682 170,682 57,100 57,100 5.65%, 3/9/2001 57,029 57,029 Forrestal Funding Master Trust, 102,140 102,140 5.47%, 4/24/2001 101,313 101,313 140,000 140,000 6.64%, 3/16/2001 139,621 139,621 Forrestral Funding Master Trust, 30,000 30,000 5.45%, 4/12/2001 29,809 29,809 35,000 35,000 5.45%, 4/24/2001 34,717 34,717 Four Winds Funding Corp., 13,000 13,000 5.17%, 4/10/2001 12,921 12,921 70,000 70,000 5.28%, 3/19/2001 69,807 69,807 26,480 26,480 5.49%, 4/10/2001 26,320 26,320 50,000 50,000 #, 5.52%, 3/21/2001 49,847 49,847 73,000 73,000 5.54%, 3/19/2001 72,799 72,799 Galaxy Funding, Inc., 29,500 29,500 5.01%, 8/10/2001 28,832 28,832 50,000 50,000 5.04%, 7/30/2001 48,943 48,943 90,000 90,000 5.17%, 8/10/2001 87,963 87,963 64,000 64,000 5.33%, 3/15/2001 63,863 63,863 73,000 73,000 5.56%, 3/15/2001 72,843 72,843 50,000 50,000 5.56%, 3/16/2001 49,885 49,885 General Electric Capital Corp., 100,000 100,000 5.00%, 7/11/2001 98,167 98,167 80,000 80,000 5.11%, 7/11/2001 78,534 78,534 50,000 50,000 5.18%, 4/19/2001 49,630 49,630 115,000 115,000 5.18%, 4/20/2001 114,133 114,133 33,000 33,000 5.19%, 4/25/2001 32,728 32,728
9 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 50,000 50,000 6.66%, 3/7/2001 49,946 49,946 Giro Funding U.S. Corp., 2,164 2,164 5.52%, 3/1/2001 2,164 2,164 Giro Multi Funding Corp., 60,000 60,000 5.27%, 3/20/2001 59,826 59,826 3,365 3,365 5.52%, 3/1/2001 3,365 3,365 121,000 121,000 5.53%, 3/20/2001 120,648 120,648 Goldman Sachs Group Inc., 225,000 225,000 5.18%, 4/12/2001 223,529 223,529 125,000 125,000 5.18%, 4/16/2001 124,109 124,109 200,000 200,000 5.76%, 4/12/2001 198,677 198,677 Govco, Inc., 90,000 90,000 5.16%, 5/4/2001 89,160 89,160 60,000 60,000 5.32%, 5/16/2001 59,335 59,335 Grand Funding Corp., 60,000 60,000 5.34%, 3/13/2001 59,890 59,890 75,000 75,000 5.34%, 3/14/2001 74,851 74,851 40,000 40,000 #, 5.51%, 3/12/2001 39,933 39,933 Greenwich Funding Corp., 85,000 85,000 5.33%, 3/6/2001 84,935 84,935 40,000 40,000 5.34%, 3/7/2001 39,963 39,963 100,000 100,000 #, 5.52%, 3/6/2001 99,919 99,919 57,468 57,468 #, 6.54%, 3/6/2001 57,421 57,421 Greyhawk Funding LLC, 53,000 53,000 5.51%, 4/24/2001 52,568 52,568 90,000 90,000 5.52%, 3/14/2001 89,821 89,821 220,000 220,000 #, 5.47%, 5/4/2001 217,891 217,891 136,300 136,300 #, 6.40%, 6/8/2001 133,976 133,976 Halifax PLC (United Kingdom), 25,000 25,000 5.17%, 4/3/2001 24,861 24,861 75,000 75,000 5.45%, 7/16/2001 73,487 73,487 30,000 30,000 5.60%, 4/10/2001 29,816 29,816 150,000 150,000 6.61%, 5/2/2001 148,347 148,347 HD Real Estate Funding 160,263 160,263 Corp., 5.17%, 5/22/2001 157,923 157,923 HomeSide Lending, Inc., 25,000 25,000 5.50%, 3/21/2001 24,924 24,924 12,775 12,775 5.50%, 3/22/2001 12,734 12,734 14,716 14,716 5.50%, 3/23/2001 14,667 14,667 Ing America Insurance Holdings, 5.01%, 73,000 73,000 8/22/2001 71,211 71,211 Jupiter Securitization Corp., 21,409 21,409 5.32%, 3/16/2001 21,360 21,360 32,755 32,755 5.34%, 3/8/2001 32,720 32,720 20,870 20,870 5.34%, 3/13/2001 20,832 20,832 50,000 50,000 5.34%, 3/14/2001 49,901 49,901 98,710 98,710 5.52%, 3/7/2001 98,620 98,620 211,167 211,167 5.52%, 3/12/2001 210,812 210,812 47,435 47,435 5.53%, 3/8/2001 47,384 47,384 41,880 41,880 6.40%, 6/12/2001 41,137 41,137 K2 (USA) LLC, 38,000 38,000 5.01%, 8/10/2001 37,142 37,142 28,000 28,000 5.15%, 8/7/2001 27,379 27,379 38,000 38,000 5.17%, 5/2/2001 37,653 37,653 52,000 52,000 5.17%, 8/9/2001 50,828 50,828 14,000 14,000 5.47%, 4/25/2001 13,884 13,884
10 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 50,000 50,000 6.94%, 4/17/2001 49,569 49,569 Kitty Hawk Funding Corp., 50,000 50,000 5.00%, 8/15/2001 48,829 48,829 69,647 69,647 5.18%, 8/15/2001 68,015 68,015 Landesbank Schleswig Holstein (Germany), 55,000 55,000 5.03%, 7/31/2001 53,553 53,553 40,000 40,000 5.09%, 6/6/2001 39,322 39,322 50,000 50,000 5.10%, 6/4/2001 49,165 49,165 100,000 100,000 5.11%, 6/1/2001 98,382 98,382 215,000 215,000 5.19%, 4/25/2001 213,216 213,216 Liberty Street Funding Corp., 32,000 32,000 5.26%, 3/21/2001 31,902 31,902 19,880 19,880 5.55%, 4/20/2001 19,729 19,729 Links Finance LLC, 100,000 100,000 5.01%, 8/21/2001 97,552 97,552 20,000 20,000 #, 5.16%, 8/1/2001 19,572 19,572 Lloyds Bank Plc (United Kingdom), 70,000 70,000 5.59%, 3/12/2001 69,880 69,880 65,000 65,000 5.59%, 3/16/2001 64,848 64,848 Lloyds TSB Bank PLC (United Kingdom), 5.14%, 40,000 40,000 8/1/2001 39,148 39,148 Market Street Funding, 22,064 22,064 5.34%, 3/13/2001 22,024 22,024 Mont Blanc Capital 20,000 20,000 Corp., 5.33%, 3/6/2001 19,985 19,985 Montauk Funding Corp., 40,000 40,000 5.34%, 3/9/2001 39,951 39,951 100,000 100,000 5.51%, 3/9/2001 99,878 99,878 Monte Rosa Capital Corp., 10,000 10,000 5.20%, 3/26/2001 9,962 9,962 26,233 26,233 5.25%, 3/22/2001 26,149 26,149 42,000 42,000 5.26%, 3/21/2001 41,872 41,872 36,000 36,000 5.51%, 3/19/2001 35,901 35,901 Morgan Stanley Dean Witter & Co., 150,000 150,000 5.18%, 4/23/2001 148,792 148,792 80,000 80,000 5.33%, 3/15/2001 79,825 79,825 Floating Rate, 5.64%, 75,000 75,000 5/30/2001 75,000 75,000 Moriarty LLC, 60,000 60,000 5.00%, 8/13/2001 58,603 58,603 65,000 65,000 5.16%, 8/9/2001 63,538 63,538 65,000 65,000 5.21%, 8/13/2001 63,487 63,487 250,000 250,000 5.33%, 5/8/2001 247,515 247,515 26,400 26,400 5.36%, 7/16/2001 25,876 25,876 89,000 89,000 5.56%, 4/9/2001 88,472 88,472 80,000 80,000 5.92%, 7/5/2001 78,390 78,390 National Rural Utilities Cooperative Finance 45,000 45,000 Corp., 5.04%, 7/19/2001 43,913 43,913 Nationwide Building Society (United Kingdom), 100,000 100,000 5.18%, 8/13/2001 97,685 97,685 65,000 65,000 5.73%, 4/3/2001 64,663 64,663 Nationwide Building Society (United Kingdom), 117,700 117,700 6.60%, 3/1/2001 117,700 117,700 46,000 46,000 6.60%, 3/22/2001 45,826 45,826 Ness Limited, 100,000 100,000 5.45%, 4/20/2001 99,243 99,243
11 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 57,900 57,900 5.52%, 3/16/2001 57,768 57,768 New Castle Certificate Program (Discover Card Master Trust I, Ser. 2000-A), 40,000 40,000 5.55%, 3/22/2001 39,871 39,871 175,000 175,000 ECN, 6.66%, 3/6/2001 174,840 174,840 Newport Funding Corp., 65,000 65,000 5.17%, 4/6/2001 64,643 64,643 16,534 16,534 5.32%, 3/16/2001 16,495 16,495 20,000 20,000 5.34%, 3/7/2001 19,982 19,982 50,000 50,000 5.34%, 3/12/2001 49,916 49,916 68,000 68,000 5.58%, 4/11/2001 67,574 67,574 Nordbanken NA Inc. (Sweden), 6.37%, 85,000 85,000 3/14/2001 84,804 84,804 Northern Rock Plc (United Kingdom), 25,000 25,000 5.18%, 4/17/2001 24,823 24,823 25,000 25,000 5.33%, 3/6/2001 24,978 24,978 Old Line Funding Corp., 39,372 39,372 5.34%, 3/8/2001 39,330 39,330 35,000 35,000 5.34%, 3/14/2001 34,931 34,931 65,556 65,556 5.52%, 3/14/2001 65,426 65,426 Parthenon Receivables Funding LLC, 25,116 25,116 4.87%, 8/28/2001 24,508 24,508 31,050 31,050 5.33%, 3/5/2001 31,031 31,031 25,000 25,000 5.34%, 3/13/2001 24,953 24,953 Pennine Funding LLC, 40,000 40,000 5.15%, 8/1/2001 39,147 39,147 45,000 45,000 5.49%, 4/19/2001 44,668 44,668 Pooled Accounts Receivable Capital Corp., 50,000 50,000 5.32%, 3/16/2001 49,885 49,885 50,000 50,000 5.52%, 3/16/2001 49,885 49,885 Preferred Rec Funding (PREFCO), 110,000 110,000 5.32%, 3/16/2001 109,749 109,749 65,640 65,640 5.62%, 3/13/2001 65,518 65,518 Procter & Gamble Co., 50,000 50,000 ECN, 5.60%, 4/5/2001 49,731 49,731 Quincy Capital Corp., 100,032 100,032 5.51%, 3/12/2001 99,864 99,864 34,212 34,212 5.51%, 3/9/2001 34,170 34,170 Receivables Capital Corp., 25,320 25,320 5.18%, 4/16/2001 25,145 25,145 35,000 35,000 5.34%, 3/12/2001 34,941 34,941 90,462 90,462 5.51%, 3/9/2001 90,352 90,352 60,000 60,000 5.52%, 3/12/2001 59,899 59,899 Repeat Offering Securitization Entity 71,340 71,340 (ROSE), 5.53%, 4/23/2001 70,768 70,768 Salomon Smith Barney Inc., 35,000 35,000 5.17%, 4/10/2001 34,788 34,788 100,000 100,000 5.18%, 4/17/2001 99,292 99,292 50,000 50,000 5.18%, 4/18/2001 49,639 49,639 60,000 60,000 5.23%, 3/2/2001 59,991 59,991 125,000 125,000 5.33%, 3/5/2001 124,913 124,913 100,000 100,000 5.33%, 3/6/2001 99,911 99,911 San Paolo IMI US Financial Co. (Brazil), 84,000 84,000 5.02%, 8/6/2001 82,146 82,146
12 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Santander Hispano Finance Delaware Inc. 40,000 40,000 (Spain), 5.02%, 8/6/2001 39,115 39,115 SBC Communications Inc., 34,000 34,000 5.17%, 4/11/2001 33,793 33,793 Sheffield Receivables Corp., 52,900 52,900 5.33%, 3/5/2001 52,868 52,868 75,000 75,000 5.33%, 3/15/2001 74,840 74,840 40,000 40,000 5.34%, 3/8/2001 39,957 39,957 53,500 53,500 5.52%, 3/12/2001 53,405 53,405 175,000 175,000 5.52%, 3/15/2001 174,625 174,625 150,000 150,000 5.53%, 3/19/2001 149,588 149,588 150,000 150,000 5.62%, 3/20/2001 149,559 149,559 26,800 26,800 6.50%, 3/12/2001 26,753 26,753 Sigma Finance Corp. (Channel Islands), 150,000 150,000 #, 5.14%, 8/2/2001 146,778 146,778 83,500 83,500 #, 5.16%, 8/2/2001 81,707 81,707 66,400 66,400 #, 5.47%, 4/23/2001 65,872 65,872 45,000 45,000 #, 6.37%, 6/11/2001 44,213 44,213 Sigma Finance Corp., 100,000 100,000 5.03%, 8/2/2001 97,857 97,857 50,000 50,000 5.16%, 5/4/2001 49,532 49,532 Silver Tower U.S. Funding LLC, 135,000 135,000 4.98%, 8/29/2001 131,701 131,701 95,000 95,000 5.25%, 8/17/2001 92,721 92,721 Societe Generale NA (France), 100,000 100,000 5.19%, 4/26/2001 99,152 99,152 124,700 124,700 5.34%, 3/7/2001 124,567 124,567 Special Purpose Accounts Receivable Cooperative Corp., 25,000 25,000 5.16%, 5/3/2001 24,770 24,770 117,000 117,000 5.47%, 4/26/2001 116,017 116,017 18,320 18,320 5.54%, 4/12/2001 18,203 18,203 Spintab-Swedmortgage AB (Sweden), 60,000 60,000 5.13%, 5/9/2001 59,396 59,396 78,669 78,669 5.16%, 5/3/2001 77,945 77,945 Surrey Funding Corp., 43,500 43,500 5.16%, 5/3/2001 43,099 43,099 30,000 30,000 5.49%, 3/26/2001 29,886 29,886 Svenska Handelsbanken, Inc. (Sweden), 16,500 16,500 5.03%, 8/1/2001 16,149 16,149 65,000 65,000 5.20%, 8/15/2001 63,471 63,471 25,000 25,000 5.28%, 3/19/2001 24,930 24,930 69,760 69,760 5.32%, 3/16/2001 69,597 69,597 25,000 25,000 5.33%, 3/15/2001 24,938 24,938 156,500 156,500 5.34%, 3/12/2001 156,195 156,195 Swedish Export Credit 10,300 10,300 (Sweden), 5.03%, 8/1/2001 10,083 10,083 Thames Asset Global Securitization (TAGS), 22,573 22,573 5.11%, 5/15/2001 22,326 22,326 32,000 32,000 5.61%, 4/17/2001 31,769 31,769 86,394 86,394 6.51%, 3/15/2001 86,179 86,179 Total Fina Elf SA 202,000 202,000 (France), 5.57%, 3/1/2001 202,000 202,000 Triple-A One Funding Corp., 82,107 82,107 5.51%, 3/8/2001 82,019 82,019 24,963 24,963 5.61%, 4/5/2001 24,829 24,829
13 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Tulip Funding Corp., 62,500 62,500 5.16%, 5/4/2001 61,917 61,917 56,749 56,749 5.34%, 3/8/2001 56,688 56,688 35,000 35,000 5.34%, 3/13/2001 34,936 34,936 150,000 150,000 5.49%, 5/1/2001 148,625 148,625 46,687 46,687 #, 5.07%, 8/28/2001 45,534 45,534 UBS Finance LLC (Switzerland), 5.03%, 85,000 85,000 8/1/2001 83,190 83,190 Unibanco - Grand Cayman, Series A, (Germany), 60,000 60,000 5.55%, 7/11/2001 58,812 58,812 Variable Funding Capital Corp., 45,000 45,000 5.13%, 5/10/2001 44,541 44,541 100,000 100,000 5.47%, 4/27/2001 99,145 99,145 Victory Receivables Corp., 68,000 68,000 5.42%, 4/25/2001 67,437 67,437 50,000 50,000 5.57%, 4/11/2001 49,687 49,687 Wal-Mart Funding Corp., 116,000 116,000 5.25%, 3/22/2001 115,628 115,628 25,000 25,000 5.53%, 3/22/2001 24,920 24,920 WCP Funding Inc., 29,000 29,000 5.11%, 5/14/2001 28,687 28,687 50,000 50,000 5.33%, 5/14/2001 49,460 49,460 Wells Fargo & Co., 45,000 45,000 5.38%, 5/4/2001 44,575 44,575 Windmill Funding Corp., 69,000 69,000 5.26%, 3/21/2001 68,790 68,790 8,000 8,000 5.28%, 3/19/2001 7,977 7,977 25,000 25,000 5.34%, 3/13/2001 24,953 24,953 110,800 110,800 5.51%, 3/7/2001 110,699 110,699 40,000 40,000 5.52%, 3/7/2001 39,963 39,963 75,000 75,000 5.52%, 3/20/2001 74,782 74,782 ------------------------------------ TOTAL COMMERCIAL PAPER 12,287,567 13,183,427 - 25,470,994 ------------------------------- CORPORATE BONDS & NOTES 21.63% ------------------------------- ASSET BACK SECURITIES 3.65% ACE Overseas Corp., FRN, 47,000 47,000 6.51%, 3/16/2001 46,999 46,999 Beta Finance Corp., Inc., (Channel Islands), 75,000 75,000 FRN, 5.56%, 8/14/2001 74,998 74,998 30,000 30,000 MTN, #, 6.90%, 3/30/2001 30,000 30,000 85,000 85,000 MTN, #, 6.94%, 5/2/2001 85,000 85,000 MTN, FRN, 5.36%, 50,000 50,000 4/30/2001 50,000 50,000 MTN, FRN, #, 5.55%, 125,000 125,000 5/8/2001 125,000 125,000 MTN, FRN, #, 6.11%, 50,000 50,000 3/30/2001 50,000 50,000 CC USA Inc., (Centauri 0 Corp.), 100,000 100,000 MTN, #, 7.07%, 7/25/2001 100,000 100,000 35,000 35,000 MTN, #, 7.12%, 5/7/2001 35,000 35,000 75,000 75,000 MTN, #, 7.48%, 6/7/2001 75,000 75,000 MTN, FRN, #, 5.56%, 50,000 50,000 4/20/2001 50,000 50,000 Ciesco L.P., Ser. A, MTN, FRN, 5.54%, 120,000 120,000 10/15/2001 120,000 120,000 MTN, FRN, #, 5.54%, 80,000 80,000 9/20/2001 80,000 80,000 Dorada Finance Inc., 70,000 70,000 MTN, #, 7.06%, 7/17/2001 70,000 70,000 K2 (USA) LLC, MTN, FRN, #, 5.57%, 55,000 55,000 7/16/2001 55,000 55,000
14 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- MTN, FRN, #, 5.57%, 100,000 100,000 8/15/2001 100,000 100,000 Liberty Lighthouse U.S. Capital Co., MTN, FRN, 120,000 120,000 #, 5.36%, 3/5/2001 120,000 120,000 Links Finance LLC, MTN, 75,000 75,000 FRN, #, 5.55%, 5/11/2001 74,998 74,998 Restructured Asset Securities with Enhanced Returns (RACERS), 1999 Ser. MM-35, FRN, #, 37,000 37,000 5.60%, 12/17/2001 37,000 37,000 Restructured Asset Securities with Enhanced Returns (RACERS), 2000 Ser. MM-7, FRN, #, 90,000 90,000 5.40%, 5/30/2001 89,988 89,988 Restructured Asset Securities with Enhanced Returns (RACERS), 2000 Ser. MM-10, FRN, #, 100,000 100,000 5.59%, 6/22/2001 100,000 100,000 Sigma Finance Corp., (Channel Islands), MTN, FRN, #, 5.46%, 100,000 100,000 5/2/2001 100,000 100,000 MTN, FRN, #, 5.56%, 75,000 75,000 3/5/2001 75,000 75,000 MTN, FRN, #, 5.57%, 100,000 100,000 5/15/2001 100,000 100,000 ------------------------------------ TOTAL ASSET BACKED SECURITIES 1,843,983 - - 1,843,983 AUTOMOTIVE 0.48% American Honda Finance Corp., MTN, FRN, #, 60,000 60,000 6.55%, 6/19/2001 60,000 60,000 General Motors Acceptance Corp., MTN, FRN, 5.61%, 5,000 5,000 7/27/2001 5,000 5,000 MTN, FRN, 5.81%, 30,000 30,000 4/30/2001 30,006 30,006 Toyota Motor Credit Corp., MTN, FRN, 6.37%, 150,000 150,000 4/23/2001 149,992 149,992 ------------------------------------ TOTAL AUTOMOTIVE 244,998 - - 244,998 BANKING 6.92% ABBEY NATIONAL TREASURY SERVICES PLC (UNITED KINGDOM), (YANKEE), 210,000 210,000 FRN, 5.44%, 10/25/2001 209,932 209,932 MTN, FRN, 5.47%, 350,000 350,000 6/15/2001 349,921 349,921 American Express Centurion Bank, 100,000 100,000 FRN, 5.54%, 2/14/2002 100,000 100,000 MTN, FRN, 5.53%, 50,000 50,000 4/12/2001 49,999 49,999 200,000 200,000 MTN, FRN, 5.54%, 5/8/2001 200,000 200,000 MTN, FRN, 5.56%, 50,000 50,000 11/20/2001 50,000 50,000 Bank of America, N.A., 50,000 50,000 5.13%, 7/17/2001 50,000 50,000 23,600 23,600 6.60%, 10/30/2001 23,775 23,775 50,000 50,000 FRN, 6.71%, 9/6/2001 50,019 50,019 MTN, FRN, 5.66%, 70,000 70,000 7/11/2001 70,002 70,002 Bank One, N.A., 39,000 39,000 FRN, 5.60%, 12/17/2001 39,011 39,011 100,000 100,000 FRN, 5.60%, 9/10/2001 100,013 100,013 85,000 85,000 FRN, 5.62%, 2/15/2002 85,040 85,040 MTN, FRN, 5.64%, 85,000 85,000 12/12/2001 84,981 84,981 Bayerische Landesbank Girozentrale, FRN, (Germany), (Yankee), 190,000 190,000 5.64%, 3/1/2001 190,000 190,000
15 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Commerzbank AG (Germany), (Yankee), 160,000 160,000 FRN, 5.34%, 6/29/2001 159,968 159,968 200,000 500,000 700,000 FRN, 5.48%, 4/26/2001 199,991 499,985 699,976 240,000 240,000 FRN, 5.50%, 3/19/2001 239,994 239,994 Credit Suisse First Boston Inc. (Switzerland), MTN, FRN, 100,000 100,000 5.54%, 5/9/2001 99,998 99,998 Dexia Bank (Belgium), (Yankee), FRN, 5.63%, 100,000 100,000 3/1/2001 100,000 100,000 Dresdner Bank AG, (Germany), (Yankee), 246,000 246,000 FRN, 5.31%, 3/28/2001 245,993 245,993 Fleet National Bank, MTN, FRN, 5.77%, 85,000 85,000 5/24/2001 85,019 85,019 National City Bank, 44,000 44,000 6.98%, 8/2/2001 43,993 43,993 70,000 70,000 FRN, 5.54%, 12/4/2001 70,000 70,000 50,000 50,000 MTN, FRN, 6.27%, 7/5/2001 49,992 49,992 Wachovia Bank, N.A., 50,000 50,000 FRN, 5.55%, 1/7/2002 50,000 50,000 ------------------------------------ TOTAL BANKING 2,953,648 543,978 - 3,497,626 DIVERSIFIED 0.37% Abbott Labs, 5.25%, 100,000 100,000 3/1/2002 100,000 100,000 General Electric Capital Corp., Series A, 7.38%, 85,000 85,000 5/23/2001 85,000 85,000 ------------------------------------ TOTAL DIVERSIFIED - 185,000 - 185,000 FINANCIAL SERVICES 7.71% Associates Corp. of North America, 26,000 26,000 FRN, 5.48%, 2/22/2002 26,045 26,045 75,000 75,000 FRN, 6.46%, 6/26/2001 75,000 75,000 SUB, FRN, 6.58%, 110,000 110,000 3/15/2001 110,000 110,000 Bear Stearns Companies, Inc., FRN, 5.78%, 85,000 85,000 8/1/2001 85,065 85,065 Bollingbrent L.P., Ser. 1999, FRDO, 5.67%, 5,000 5,000 3/6/2001 5,000 5,000 Citigroup Inc., 175,000 140,000 315,000 MTN, FRN, 5.52%, 4/4/2001 175,000 140,000 315,000 250,000 150,000 400,000 MTN, FRN, 5.54%, 6/6/2001 250,000 150,000 400,000 Goldman Sachs Group, Inc., 244,000 244,000 FRN, #, 5.80%, 3/15/2002 244,000 244,000 MTN, FRN, 5.59%, 67,000 67,000 2/11/2002 67,113 67,113 Homeside Lending, Inc., MTN, FRN, 5.68%, 5,000 5,000 4/24/2001 5,001 5,001 Household Finance Corp., MTN, FRN, 5.36%, 50,000 50,000 3/30/2001 49,995 49,995 MTN, FRN, 5.76%, 25,000 25,000 7/16/2001 25,004 25,004 MTN, FRN, 6.62%, 100,000 100,000 6/22/2001 100,027 100,027 MTN, FRN, 6.65%, 37,000 37,000 6/21/2001 37,011 37,011 Merrill Lynch & Co., Inc., MTN, FRN, 5.48%, 4,885 4,885 8/10/2001 4,887 4,887 350,000 350,000 MTN, FRN, 5.52%, 3/6/2001 349,999 349,999 MTN, FRN, 5.56%, 75,000 75,000 11/19/2001 75,000 75,000 70,000 70,000 MTN, FRN, 5.64%,1/4/2002 69,98 69,982
16 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- MTN, FRN, 5.65%, 70,000 70,000 3/11/2002 70,065 70,065 Morgan Stanley Dean Witter & Co., 260,000 260,000 FRN, 5.59%, 3/15/2002 260,000 260,000 50,000 50,000 FRN, 6.73%, 12/17/2001 50,124 50,124 MTN, FRN, 5.55%, 150,000 150,000 3/16/2001 150,000 150,000 MTN, FRN, 6.62%, 50,000 50,000 9/14/2001 50,061 50,061 MTN, FRN, 5.64%, 55,000 55,000 5/15/2001 55,000 55,000 MTN, FRN, 6.67%, 35,000 35,000 3/13/2001 35,000 35,000 MTN, FRN, 6.68%, 75,000 75,000 3/15/2001 75,000 75,000 Wells Fargo Bank, N.A., MTN, FRN, 5.51%, 175,000 30,000 205,000 7/24/2001 174,973 29,995 204,968 MTN, FRN, 5.55%, 330,000 500,000 830,000 3/15/2002 329,999 500,000 829,999 Westpac Banking Corp., (Australia), (Yankee), 75,000 75,000 FRN, 5.43%, 5/8/2001 75,005 75,005 ------------------------------------ TOTAL FINANCIAL SERVICES 3,079,356 819,995 - 3,899,351 INSURANCE 0.10% Prudential Funding Corp., MTN, FRN, 5.82%, 50,000 50,000 4/17/2001 50,004 - 50,004 ------------------------------------ MACHINERY & ENGINEERING EQUIPMENT 0.18% Caterpillar Financial Services Corp., 10,000 10,000 MTN, FRN, 5.83%, 7/9/2001 10,003 10,003 75,000 75,000 MTN, FRN, 5.92%, 7/9/2001 75,001 75,001 5,000 5,000 MTN, FRN, 6.79%, 6/1/2001 5,000 5,000 ------------------------------------ TOTAL MACHINERY & ENGINEERING EQUIPMENT 90,004 - - 90,004 TELECOMMUNICATION 2.23% AT&T Corp., 250,000 250,000 FRN, #, 5.51%, 3/8/2001 249,999 249,999 273,000 273,000 FRN, #, 5.61%, 7/19/2001 273,000 273,000 BellSouth Telecommunications, 250,000 250,000 Inc., FRN, 6.56%,1/4/2002 250,00 250,000 SBC Communications, Inc., FRN, #, 5.34%, 356,000 356,000 5/15/2001 355,986 355,986 ------------------------------------ TOTAL TELECOMMUNICATION 1,128,985 - - 1,128,985 ------------------------------------ TOTAL CORPORATE NOTES & BONDS 21.63% 9,390,978 1,548,973 - 10,939,951 ------------------------------- FLOATING RATE NOTES 8.17% ------------------------------- American Express Centurion, 21,500 21,500 5.54%, 3/16/2001 21,500 21,500 100,000 100,000 5.67%, 3/1/2001 100,000 100,000 25,000 25,000 MTN, 5.53%, 4/12/2001 25,000 25,000 Associates Corp. NA, 325,000 325,000 6.43%, 3/29/2001 325,000 325,000 Bank of America Corp., 130,000 130,000 5.65%, 3/1/2001 129,997 129,997 470,000 470,000 5.67%, 3/1/2001 470,000 470,000 Bank of Scotland (Scotland), 144A, 6.65%, 384,500 384,500 3/5/2001 384,500 384,500
17 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- Bayerische Hypo Vereinsbank (Germany), 300,000 300,000 5.59%, 3/1/2001 299,919 299,919 Bayerische Landesbank Girozentrale (Germany), 200,000 200,000 5.61%, 3/1/2001 199,957 199,957 Commerzbank AG (Germany), 5.80%, 10,000 10,000 3/1/2001 10,000 10,000 First Union National Bank, 45,000 45,000 5.66%, 3/1/2001 45,000 45,000 500,000 500,000 5.67%, 3/1/2001 500,000 500,000 Household Bank FSB, 15,000 15,000 5.88%, 4/9/2001 15,003 15,003 5,000 5,000 6.55%, 4/3/2001 5,001 5,001 Lehman RACERS 144A, Series 1999-35-MM, 165,000 165,000 5.60%, 3/15/01 165,000 165,000 Lehman RACERS 144A, Series 2000-15-MM-MBS, 175,000 175,000 5.59%, 3/13/2001 175,000 175,000 SPARCS, Series 2000-1, 447,000 447,000 5.70%, 4/24/2001 447,000 447,000 Unilever (Netherlands), 135,000 135,000 6.71%, 3/7/2001 135,000 135,000 US Bank NA Minnesota, 75,000 75,000 5.63%, 3/1/2001 74,997 74,997 US Bank North Dakota, 100,000 100,000 5.65%, 3/1/2001 99,997 99,997 Wells Fargo & Co., 8,000 8,000 6.78%, 3/15/2001 8,010 8,010 52,000 52,000 MTN, 6.49%, 3/19/2001 51,994 51,994 Wells Fargo Financial Inc., MTN, Series C, 100,000 100,000 5.62%, 3/1/2001 99,981 99,981 Westdeutsche Landesbank New York (Germany), Series CD, 5.48%, 342,000 342,000 3/23/2001 341,989 341,989 ------------------------------------ TOTAL FLOATING RATE NOTES - 4,129,845 - 4,129,845 ------------------------------- FUNDING AGREEMENT/GIC 1.74% ------------------------------- 50,000 50,000 AIG Funding Inc., 50,000 50,000 Floating Rate, 6.63%, 10/1/2001 First Allmerica Financial Life Insurance Co., Floating Rate, 25,000 25,000 5.72%, 4/6/2001 25,000 25,000 G E Financial Assurance, Floating Rate, 6.81%, 150,000 150,000 3/1/2001 150,000 150,000 Jackson National Life Insurance Co., Floating Rate, 5.83%, 100,000 100,000 1/18/2002 100,000 100,000 Floating Rate, 5.86%, 80,000 80,000 9/1/2003 80,000 80,000 MetLife Funding Inc., Floating Rate, #, 6.81%, 100,000 100,000 6/1/2001 100,000 100,000 Security Life of Denver Insurance Co., Floating 275,000 275,000 Rate, 5.43%, 2/27/2002 275,000 275,000 Travelers Insurance Co., Floating Rate, 5.71%, 50,000 50,000 4/24/2001 50,000 50,000 United of Omaha Life Insurance Company, Floating Rate, 5.72%, 50,000 50,000 5/17/2002 50,000 50,000 ------------------------------------ TOTAL FUNDING AGREEMENT/GIC 880,000 - - 880,000 ------------------------------- REPURCHASE AGREEMENT 0.69% -------------------------------
18 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 51,206 51,206 Deutsche Bank 51,206 51,206 Securities, Tri-Party, 5.47%, due 3/1/2001 (Dated 2/28/2001, Proceeds $51,214, Secured by Federal National Mortgage Association, $51,808, 5.75%, due 2/15/2008, Market Value $52,230) Goldman Sachs Repurchase Agreement, 5.41%, 300,000 300,000 3/1/2001 300,000 300,000 ------------------------------------ TOTAL REPURCHASE AGREEMENT 51,206 300,000 - 351,206 ------------------------------- RESIDENTIAL MORTGAGE BACKED SECURITIES 0.57% ------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS Merrill Lynch Mortgage Investors, Ser. 2000-WM2, Class A1, FRN, 231,069 231,069 5.41%, 11/27/2001 231,069 231,069 Ser. 2000-WM2, Class A2, 6.68%, 57,583 57,583 11/27/2001 57,583 57,583 ------------------------------------ TOTAL RESIDENTIAL MORTGAGE BACKED SECURITIES 288,652 - - 288,652 ------------------------------- STATE AND MUNICIPAL OBLIGATIONS 0.31% ------------------------------- California Housing Finance Agency, Single Family Housing, Home Mortgage, Taxable, Ser. M, Rev., 20,205 20,205 FRDO, 5.31%, 3/5/2001 20,205 20,205 33,530 33,530 FRDO, 5.31%, 3/5/2001 33,530 33,530 California Pollution Control Financing Authority, Environmental Improvement, Shell Oil Co. Project, Taxable, Ser. B, 20,000 20,000 Rev., FRDO, 5.46%, 3/7/2001 20,000 20,000 Sacramento County, California, Taxable, Rev., FRDO, 5.45%, 22,000 22,000 3/7/2001 22,000 22,000 Sault Sainte Marie, Michigan, Tribe Building Authority, Taxable, Rev., FRDO, 7.04%, 3,636 3,636 6/1/2001 3,636 3,636 SSM Healthcare, Missouri Health Facilities, Taxable, Ser. E, 16,200 16,200 Rev., FRDO, 5.50%, 3/6/2001 16,200 16,200 Texas State, Veterans Housing Assistance, Taxable, Ser. A-2, 32,500 32,500 GO, FRDO, 5.45%, 3/7/2001 32,500 32,500 Wake Forest University, Series 1997, 5.28%, 3/7/2001 (LOC: 6,200 6,200 Wachovia Bank) 6,200 6,200 ------------------------------------ TOTAL STATE AND MUNICIPAL OBLIGATIONS 148,071 6,200 - 154,271 ------------------------------- TIME DEPOSITS 6.12% ------------------------------- ABN AMRO Bank N.V. (Netherlands), 300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) - Allied Irish Banks PLC (United 50,000 50,000 Kingdom), 6.66%, 3/30/2001 50,000 50,000 Bank of Brussels (Belgium), 250,000 250,000 5.56%, 3/1/2001 250,000 250,000 Bank of Ireland (Ireland), 5.38%, 120,000 120,000 7/2/2001 120,000 120,000 Bank of Nova Scotia (Canada), 100,000 100,000 5.50%, 7/16/2001 100,000 100,000 Banque & Caisse d'Epargne de 460,896 460,896 l'Etat, 5.53%, 3/1/2001 460,896 460,896 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 5.66%, 134,000 134,000 3/1/2001 134,000 134,000 Caisse des Depots et Consignations (France), - 750,000 (750,000)(a) - 5.53%, 3/1/2001 750,000 (750,000) (a) -
19 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- 300,000 (300,000)(a) - 5.54%, 3/1/2001 300,000 (300,000) (a) - Caja De Madrid Bank (Spain), - 59,000 59,000 5.38%, 7/10/2001 59,000 59,000 60,000 60,000 6.64%, 4/27/2001 60,000 60,000 37,000 37,000 6.65%, 4/24/2001 37,000 37,000 110,000 110,000 6.65%, 7/24/2001 110,000 110,000 75,000 75,000 6.67%, 11/19/2001 75,000 75,000 Canadian Bank (Canada), 5.66%, 200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (a) - Credit Suisse First Boston (Swiss Bank), (Switzerland), 5.56%, 200,000 (200,000)(a) - 3/1/2001 200,000 (200,000) (A) - Deutsche Bank (Germany), 5.53%, 375,000 (375,000)(a) - 3/1/2001 375,000 (375,000) (a) - ING Bank N.V. (Netherlands), 275,000 (275,000)(a) - 5.63%, 3/1/2001 275,000 (275,000) (a) - Landesbank Baden-Wuerttemberg 100,000 (67,646)(a) 32,354 (Germany), 5.56%, 3/1/2001 100,000 (65,646) 34,354 Landesbank Schleswig Holstein 100,000 100,000 (Germany), 6.69%, 4/17/2001 100,000 100,000 Societe Generale, (France), 192,050 192,050 5.53%, 3/1/2001 192,050 192,050 250,000 250,000 5.53%, 3/1/2001 250,000 250,000 200,280 200,280 5.63%, 3/1/2001 200,280 200,280 417,044 417,044 5.63%, 3/1/2001 417,044 417,044 Svenska Handelsbanken, Inc. 175,000 175,000 (Sweden), 5.53%, 3/1/2001 175,000 175,000 223,500 223,500 Swedbank (Sweden), 5.59%, 3/1/2001 223,500 223,500 Wells Fargo Bank, N.A., 5.55%, 48,000 48,000 4/30/2001 48,000 48,000 ------------------------------------ TOTAL TIME DEPOSITS 3,883,544 1,678,226 (2,465,646) 3,096,124 ------------------------------- U.S. GOVERNMENT AGENCY SECURITIES 2.90% ------------------------------- 25,000 25,000 Federal Farm Credit Bank, DN, 24,426 24,426 4.86%, 8/22/2001 Federal Home Loan Bank, 13,702 13,702 DN, 4.95%, 8/3/2001 13,416 13,416 5,488 5,488 DN, 4.96%, 8/10/2001 5,368 5,368 20,375 20,375 DN, 4.96%, 8/15/2001 19,917 19,917 10,105 10,105 DN, 4.97%, 8/17/2001 9,875 9,875 40,456 40,456 DN, 4.97%, 8/24/2001 39,497 39,497 75,000 75,000 DN, 6.51%, 3/15/2001 74,822 74,822 Federal Home Loan Mortgage Corp., 160,000 160,000 DN, 4.86%, 7/27/2001 156,869 156,869 23,000 23,000 DN, 4.86%, 8/16/2001 22,482 22,482 165,000 165,000 DN, 4.92%, 7/27/2001 161,734 161,734 39,295 39,295 DN, 4.95%, 7/13/2001 38,578 38,578 192,000 192,000 DN, 4.95%, 8/16/2001 187,671 187,671 Federal National Mortgage Association, 100,000 100,000 DN, 4.83%, 7/30/2001 98,003 98,003 20,000 20,000 DN, 4.84%, 8/16/2001 19,556 19,556 334,120 334,120 DN, 4.89%, 8/23/2001 326,298 326,298 100,000 100,000 DN, 4.95%, 8/16/2001 97,741 97,741 98,856 98,856 DN, 4.97%, 8/2/2001 96,801 96,801 76,762 76,762 DN, 4.97%, 8/9/2001 75,094 75,094 ----------------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY SECURITIES 823,979 644,169 1,466,148 -----------------------------------------------------------------------------------------
20 THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINED SCHEDULE OF INVESTMENTS FOR THE YEAR ENDED FEBRUARY 28, 2001 (Unaudited) (AMOUNTS IN THOUSANDS)
SHARES MARKET VALUE - ------------------------------------------ ---------------------------------------------------- PRO FORMA PRO FORMA COMBINED COMBINED JPMORGAN THE JPMORGAN JPMORGAN THE JPMORGAN PRIME PRIME PRIME PRIME PRIME PRIME MONEY MONEY MONEY MONEY MONEY MONEY MARKET MARKET PRO FORMA MARKET MARKET MARKET PRO FORMA MARKET FUND II FUND ADJUSTMENTS FUND FUND II FUND ADJUSTMENTS FUND - ------------------------------------------ ---------------------------------------------------- ----------------------------------------------------------------------------------------- TOTAL INVESTMENTS 100.55% $29,704,751 $23,618,293 $(2,465,646) $50,857,398 ----------------------------------------------------------------------------------------- TOTAL COST $29,704,751 $23,618,293 $(2,465,646) $50,857,398 ----------------------------------------------------------------------------------------- TOTAL NET ASSETS $50,576,945 -----------------------------------------------------------------------------------------
DN - Discount Notes ECN - Extendible Commercial Note. The maturity date shown is the call date. The interest rate shown is the effective yield at the date of purchase. FRDO - Floating Rate Demand Obligation. The maturity date shown is the actual maturity date. The rate shown is the rate in effect at February 28, 2001. FRN - Floating Rate Note. The maturity shown is the actual Maturity date. The rate shown is the rate in effect at February 28, 2001. FSB - GIC - Guaranteed Insurance Contract GO - General Obligation LOC - Letter of Credit MM-MBS MTN - Medium Term Note RACERS - Restructured Asset Certificates Rev. - Revenue Bond Ser. - Series SPARCS - Structured Product Asset Return 144A - Securities restricted for resale to Qualified Institutional Buyers # - SECURITY MAY ONLY BE SOLD TO QUALIFIED INSTITUTIONAL BUYERS (a) REFLECTS THE REDEMPTION OF SHORT-TERM SECURITIES OF THE J.P. MORGAN MANAGER'S MONEY MARKET FUND, JPM INSTITUTIONAL MONEY MARKET FUND, LTD. AND J.P. MORGAN INSTITUTIONAL SERVICE MONEY MARKET FUND, LTD. 21 J.P. MORGAN PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND J.P. MORGAN PRIME MONEY MARKET RESERVES FUND / J.P. MORGAN INSTITUTIONAL DIRECT PRIME MONEY MARKET FUND J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET PORTFOLIO/ JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES AS OF FEBRUARY 28, 2001 (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND ASSETS: Investment Securities, at Value $ - $ - $ - $ - $ - Investment in The Prime Money Market Portfolio ("Portfolio"), at Value 4,681,811 14,165,871 1,368,882 280,538 20,431 Cash - - - - - Deferred Organization Expenses - - 4 - - Prepaid Trustees' Fees and Expenses 4 8 2 - - Other Assets 4 4 1 - - Receivable: - - - - - Interest - - - - - Fund Shares Sold - - - - - Expense Reimbursements - 1,561 105 38 17 ------------------------------------------------------------------------------ Total Assets 4,681,819 14,167,444 1,368,994 280,576 20,448 ------------------------------------------------------------------------------ LIABILITIES: Payables: Investment Securities Purchased - - - - - Fund Shares Redeemed - - - - - Dividends 18,639 63,295 7,351 1,189 85 Accrued Liabilities: Investment Advisory Fees - - - - - Administrative Services Fees 80 274 30 6 - Shareholder Servicing Fees 865 1,208 67 14 1 Distribution Fees - - - 67 - Custody Fees - - - - - Administration Fees 5 7 2 - - Service Organization Fees - - 335 67 2 Fund Services Fees - 3 - - - Other 143 45 112 73 53 ------------------------------------------------------------------------------ Total Liabilities 19,732 64,832 7,897 1,416 141 ------------------------------------------------------------------------------ NET ASSETS: Paid-in Capital 4,662,391 14,102,966 1,361,171 279,169 20,307 Accumulated Undistributed /(Distributions in Excess of) Net Investment Income - 62 5 - - Accumulated Net Realized Loss on Investment (304) (416) (79) (9) - ------------------------------------------------------------------------------ Net Assets $4,662,087 $14,102,612 $ 1,361,097 $ 279,160 $ 20,307 ============================================================================== PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND ASSETS: Investment Securities, at Value $ - $23,618,293 $29,704,751 $ (2,465,646)(f) $50,857,398 Investment in The Prime Money Market Portfolio("Portfolio"), at Value 535,496 - - (21,053,029)(a) - Cash - 1 146 - 147 Deferred Organization Expenses - - - (4)(b) - Prepaid Trustees' Fees and Expenses - 18 - - 32 Other Assets 1 12 143 - 165 Receivable: - - - - - Interest - 101,001 116,304 - 217,305 Fund Shares Sold - - 13 - 13 Expense Reimbursements - - 7 4(b) 1,732 --------------------------------------------------------------------------------- Total Assets 535,497 23,719,325 29,821,364 (23,518,675) 51,076,792 --------------------------------------------------------------------------------- LIABILITIES: Payables: Investment Securities Purchased - 198,003 70,252 - 268,255 Fund Shares Redeemed - - 31 - 31 Dividends 1,806 - 122,404 - 214,769 Accrued Liabilities: Investment Advisory Fees - 2,024 2,331 - 4,355 Administrative Services Fees 8 446 2,096 - 2,940 Shareholder Servicing Fees 91 - 3,718 - 5,964 Distribution Fees 183 - 7 - 257 Custody Fees - 103 204 - 307 Administration Fees 1 20 - - 35 Service Organization Fees - - - - 404 Fund Services Fees - 4 - - 7 Other 69 50 1,978 - 2,523 --------------------------------------------------------------------------------- Total Liabilities 2,158 200,650 203,021 - 499,847 --------------------------------------------------------------------------------- NET ASSETS: Paid-in Capital 533,344 - 29,619,555 - 50,578,903 Accumulated Undistributed / (Distributions in Excess of) Net Investment Income - - (152) - (85) Accumulated Net Realized Loss on Investment (5) - (1,060) - (1,873) --------------------------------------------------------------------------------- Net Assets $ 533,339 $ 23,518,675 $29,618,343 $(23,518,675) $50,576,945 =================================================================================
(a) Reflects reallocation of investment from the feeder funds to master portfolio. (b) Reflects write-off of deferred organization expense. (c) Reflects the additional number of shares outstanding due to the Concurrent Reorganization. (d) Reallocation of the fund's shares of beneficial interest outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (e) Reallocation of the fund's shares outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (f) Reflects the redemption in short-term investments of J.P. Morgan Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd. and J.P. Morgan Institutional Service Money Market Fund, Ltd. * All classes See Notes to Pro Forma Financial Statements 22
J.P. MORGAN J.P. MORGAN J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND Shares of Beneficial Interest Outstanding ($.001 par value; unlimited number of shares authorized) 4,662,032 14,102,955 1,361,177 279,169 20,307 Shares Outstanding Premier Vista (renamed Morgan) Class B Class C Institutional (renamed Agency) Reserves Net Asset Value Per Share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 PRO FORMA WITH CONCURRENT REORGANIZATION JP MORGAN PRIME MONEY MARKET FUND SHARES OUTSTANDING Cash Management - - - - - Reserves - - - - - Morgan - - - - - Premier - - - - - Retail - - - - - Agency - - - - - Class B - - - - - Class C - - - - - Institutional - - - - - NET ASSET VALUE PER SHARE Cash Management - - - - Reserves - - - - Morgan - - - - Premier - - - - Retail - - - - Agency - - - - Class B - - - - Class C - - - - Institutional - - - - ------------------------------------------------------------------------------ Cost of Investments $ - $ - $ - $ - $ - ============================================================================== PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND Shares of Beneficial Interest Outstanding ($.001 par value; unlimited number of shares authorized) 533,344 - - (20,958,984)(d) - Shares Outstanding Premier 2,059,160 (2,059,160)(e) - Vista (renamed Morgan) 10,213,350 (10,213,350)(e) - Class B 12,496 (12,496)(e) - Class C 309 (309)(e) - Institutional (renamed Agency) 17,334,106 (17,334,106)(e) - Reserves 123 (123)(e) - Net Asset Value Per Share $ 1.00 - $ 1.00* - $ - PRO FORMA WITH CONCURRENT REORGANIZATION JP MORGAN PRIME MONEY MARKET FUND SHARES OUTSTANDING Cash Management - - - 533,344(c) 533,344 Reserves - - - 279,169(c) 279,169 Morgan - - - 10,213,473(c) 10,213,473 Premier - - - 3,420,337(c) 3,420,337 Retail - - - 4,662,032(c) 4,662,032 Agency - - - 17,354,413(c) 17,354,413 Class B - - - 12,496(c) 12,496 Class C - - - 309(c) 309 Institutional - - - 14,102,955(c) 14,102,955 NET ASSET VALUE PER SHARE Cash Management - - - - $ 1.00 Reserves - - - - $ 1.00 Morgan - - - - $ 1.00 Premier - - - - $ 1.00 Retail - - - - $ 1.00 Agency - - - - $ 1.00 Class B - - - - $ 1.00 Class C - - - - $ 1.00 Institutional - - - - $ 1.00 --------------------------------------------------------------------------------- Cost of Investments $ - $23,618,293 $ 29,704,751 $(2,465,646) $50,857,398 =================================================================================
(a) Reflects reallocation of investment from the feeder funds to master portfolio. (b) Reflects write-off of deferred organization expense. (c) Reflects the additional number of shares outstanding due to the Concurrent Reorganization. (d) Reallocation of the fund's shares of beneficial interest outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (e) Reallocation of the fund's shares outstanding to Cash Management, Reserves, Morgan, Premier, Retail, Agency, Class B, Class C, and Institutional Shares due to the Concurrent Reorganization. (f) Reflects the redemption in short-term investments of J.P. Morgan Manager's Money Market Fund, JPM Institutional Money Market Fund, Ltd. and J.P. Morgan Institutional Service Money Market Fund, Ltd. * All classes See Notes to Pro Forma Financial Statements 23 J.P. MORGAN PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND / J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND / J.P. MORGAN PRIME MONEY MARKET RESERVES FUND / J.P. MORGAN INSTITUTIONAL PRIME DIRECT MONEY MARKET FUND / J.P. MORGAN PRIME CASH MANAGEMENT FUND / THE PRIME MONEY MARKET PORTFOLIO / JPMORGAN PRIME MONEY MARKET FUND II PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED FEBRUARY 28, 2001 (UNAUDITED) (AMOUNTS IN THOUSANDS)
J.P. MORGAN J.P. MORGAN J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL J.P. MORGAN INSTITUTIONAL SERVICE PRIME DIRECT PRIME PRIME PRIME MONEY PRIME MONEY MONEY MONEY MARKET MONEY MARKET MARKET MARKET RESERVES MARKET FUND FUND FUND FUND FUND INCOME: Interest Income $ - $ - $ - $ - $ - Allocated Interest Income 263,803 646,625 125,099 23,337 1,186 Allocated Portfolio Expenses (5,766) (14,196) (2,722) (508) (25) ---------------------------------------------------------------------------- Investment Income 258,037 632,429 122,377 22,829 1,161 ---------------------------------------------------------------------------- EXPENSES: Shareholder Servicing Fees 10,161 10,027 957 179 9 Investment Advisory Fees - - - - - Administrative Services Fees 974 2,238 457 85 5 Service Organization Fee/Distribution Fee - - 4,789 1,786 18 Registration Expenses 394 1,684 250 77 41 Custodian Fees - - - - - Transfer Agent Fees 4 1 18 2 4 Trustees' Fees and Expenses 47 105 20 1 - Professional Fees 27 53 16 12 14 Fund Services Fee 60 143 27 5 - Printing and Postage 15 13 13 11 17 Administration Fees 42 97 20 3 - Financial and Fund Accounting Services Fee 5 5 19 5 5 Amortization of Organizational Expenses - - 2 - - Other 263 195 32 46 27 ---------------------------------------------------------------------------- Total Expenses 11,992 14,561 6,620 2,212 140 ---------------------------------------------------------------------------- Less: Amounts Waived - - - - - Less: Earnings Credits - - - - - Less: Expense Reimbursements - 8,703 721 219 112 ---------------------------------------------------------------------------- Net Expenses 11,992 5,858 5,899 1,993 28 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Investment Income 246,045 626,571 116,478 20,836 1,133 ---------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net Realized Gain (Loss) on Investments (91) (167) (20) (9) 1 Change in Net Unrealized Appreciation/ (Depreciation) of Investments - - - - - ---------------------------------------------------------------------------- Net Realized and Unrealized Appreciation/ (Depreciation) on Investments Allocated from Portfolio (91) (167) (20) (9) 1 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations $ 245,954 $ 626,404 $ 116,458 $ 20,827 $ 1,134 ============================================================================ PRO FORMA COMBINED J.P. MORGAN THE JPMORGAN JPMORGAN PRIME PRIME PRIME PRIME CASH MONEY MONEY MONEY MANAGEMENT MARKET MARKET PRO FORMA MARKET FUND PORTFOLIO FUND II ADJUSTMENT FUND INCOME: Interest Income $ - $ 1,259,669 $ 1,076,858 $ (187,055)(e) $2,149,472 Allocated Interest Income 12,602 - - (1,072,652)(c) - Allocated Portfolio Expenses (275) - - 23,492(b) - ----------------------------------------------------------------------------- Investment Income 12,327 1,259,669 1,076,858 (1,236,215) 2,149,472 ----------------------------------------------------------------------------- EXPENSES: Shareholder Servicing Fees - - 29,798 7,055(a) 58,186 Investment Advisory Fees - 20,487 16,596 (3,665)(a,e) 33,418 Administrative Services Fees 45 4,509 16,596 8,509(a) 33,418 Service Organization Fee/Distribution Fee 1,453 1,824 115 (8,046)(a) 1,939 Registration Expenses 145 - 612 - 3,203 Custodian Fees - - 987 2,795(f) 3,782 Transfer Agent Fees 4 - 1,196 - 1,229 Trustees' Fees and Expenses - 205 809 - 1,187 Professional Fees 17 127 294 (68)(g) 492 Fund Services Fee 2 279 - - 516 Printing and Postage 13 13 238 (21)(g) 312 Administration Fees 2 116 - - 280 Financial and Fund Accounting Services Fee 5 - - (44)(f) - Amortization of Organizational Expenses - - - - 2 Other 14 20 1,337 - 1,934 ----------------------------------------------------------------------------- Total Expenses 1,700 27,580 68,578 6,515 139,898 ----------------------------------------------------------------------------- Less: Amounts Waived - - 7,896 6,514 14,410 Less: Earnings Credits - - 164 164 Less: Expense Reimbursements 96 - 11 436 10,298 ----------------------------------------------------------------------------- Net Expenses 1,604 27,580 60,507 (435) 115,026 ----------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net Investment Income 10,723 1,232,089 1,016,351 (1,235,780) 2,034,446 ----------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net Realized Gain (Loss) on Investments (5) (356) (143) 291(d) (499) Change in Net Unrealized Appreciation/ (Depreciation) of Investments - - - - Net Realized and Unrealized Appreciation/ (Depreciation) on Investments Allocated from Portfolio (5) (356) (143) 291 (499) ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations $ 10,718 $1,231,733 $ 1,016,208 $(1,235,489) $2,033,947 =============================================================================
(a) Reflects adjustments to investment advisory fee, administrative fees and shareholder servicing fees and/or related waivers based on the surviving Fund's revised fee schedule. (b) Reflects the elimination of master portfolio expenses which have been (c) Reallocation of investments income to feeder funds (d) Reallocation of realized and unrealized loss to feeder funds. (e) Reflects elimination of J.P. Morgan Institutional Money Market Fund, Ltd, J.P. Morgan Institutional Service Money Market Fund, Ltd. and J.P. Morgan Manager's Money Market Fund allocated expenses/income. (f) Reflects new combined custodial agreement. (g) Reduction reflects expected benefits from combined operations. See Notes to Pro Forma Statements. 24 J.P. MORGAN PRIME MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL PRIME MONEY MARKET FUND, J.P. MORGAN INSTITUTIONAL SERVICE PRIME MONEY MARKET FUND, J.P. MORGAN PRIME MONEY MARKET RESERVES FUND, J.P. MORGAN INSTITUTIONAL DIRECT PRIME MONEY MARKET FUND, J.P. MORGAN PRIME CASH MANAGEMENT FUND, THE PRIME MONEY MARKET PORTFOLIO, JPMORGAN PRIME MONEY MARKET FUND II NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF COMBINATION: The Pro Forma Combining Statement of Assets and Liabilities, Statement of Operations and Schedule of Investments ("Pro Forma Statements") reflect the accounts of The Prime Money Market Portfolio ("Master Portfolio"), J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund, (collectively the "feeder funds" of the Master Portfolio) and JPMorgan Prime Money Market Fund II ("JPMPMMF II") as if the proposed Concurrent Reorganization occurred as of and for the twelve months ended February 28, 2001. Under the Concurrent Reorganization, the Pro Forma Statements give effect to the proposed transfer of all assets and liabilities of Master Portfolio, J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund and JPMPMMF II in exchange for shares in JP Morgan Prime Money Market II. The Pro Forma Statements should be read in conjunction with the historical financial statements of each Fund, which have been incorporated by reference in their respective Statements of Additional Information. 2. SHARES OF BENEFICIAL INTEREST: Immediately prior to the Concurrent Reorganization, JPMPMMF II would commence offering Cash Management Shares, Reserves Shares, Morgan Shares, Premier Shares, Retail Shares, Agency Shares, Institutional Shares, Class B Shares and Class C Shares. The net asset value per share for Cash Management Reserves, Morgan, Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement of offering would be identical to the closing net asset value per share for the JPMPMMF II Institutional Class prior to Concurrent Reorganization. Under the Concurrent Reorganization, the existing shares of J.P. Morgan Prime Cash Management Fund would be renamed Cash Management Shares, the existing shares of J.P. Morgan Prime Money Market Reserves Fund would be renamed Reserves Shares, the existing shares of JPMPMMF II Reserves and Vista Classes would be renamed Morgan Class, the existing shares of J.P. Morgan Institutional Service Prime Money Market Fund and JPMPMMF II Premier Class would be renamed as Premier Class, the existing shares of J.P. Morgan Prime Money Market Fund would be renamed as Retail Class, the existing shares of J.P. Morgan Institutional Direct Prime Money Market Fund and JPMPMMF II Institutional Class would be renamed as Agency Class, the existing shares of J.P. Morgan Institutional Prime Money Market Fund would be renamed Institutional Class, and the existing shares of JPMPMMF II Class B and Class C would remain as such respectively. The net asset values per share for the following classes: Cash Management, Reserves, Morgan, Premier, Retail, Agency, Institutional, Class B and Class C, at the commencement of offering would be identical to the closing net asset value per share for the JPMPMMF II Institutional Class immediately prior to the Concurrent Reorganization. Under the proposed Concurrent Reorganization, each shareholder of J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, and J.P. Morgan Prime Cash Management Fund would receive shares of JPMPMMF II with a value equal to their holding in their respective funds. Holders of the J.P. Morgan Prime Cash Management Fund will receive Cash Management Shares. Holders of the J.P. Morgan Prime Money Market Reserves Fund will receive Reserve Shares. Holders of Reserves and Vista Classes in JPMPMMF II will receive Morgan Shares. Holders of J.P. Morgan Institutional Service Prime Money Market Fund and holders of Premier Class in JPMPMMF II will receive Premier Shares. Holders of J.P. Morgan Prime Money Market Fund will receive 25 Retail Shares. Holders of J.P. Morgan Institutional Direct Prime Money Market Fund and Institutional Class in JPMPMMF II will receive Agency Shares. Holders of J.P. Morgan Institutional Prime Money Market Fund will receive Institutional Shares. Holders of Class B and Class C in JPMPMMF II will receive Class B and Class C Shares respectively. Shareholders of the J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, and J.P. Morgan Prime Cash Management Fund will become shareholders of JPMPMMF II. The Pro Forma net asset value per share assumes the issuance of additional shares of JPMPMMF II, which would have been issued on February 28, 2001 in connection with the proposed Concurrent Reorganization. The amount of additional shares assumed to be issued under the Concurrent Reorganization was calculated based on February 28, 2001 net assets of J.P. Morgan Prime Money Market Fund, J.P. Morgan Institutional Prime Money Market Fund, J.P. Morgan Institutional Service Prime Money Market Fund, J.P. Morgan Prime Money Market Reserves Fund, J.P. Morgan Institutional Direct Prime Money Market Fund, J.P. Morgan Prime Cash Management Fund and net asset value per share of JPMPMMF II - Institutional Class. JPMORGAN PRIME MONEY MARKET WITH CONCURRENT REORGANIZATION (Amounts in Thousands, Except per share Amounts)
Cash Reserves Premier Retail Agency Institutional Management Increase in 533,344 279,169 1,361,177 4,662,032 20,307 14,102,955 Shares Issued Net Assets $533,339 $279,160 $1,361,097 $4,662,087 $20,307 $14,102,612 2/28/01 Pro Forma $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Net Asset Value 2/28/01
3. PRO FORMA OPERATIONS: The Pro Forma Statement of Operations assumes similar rates of gross investment income for the investments of each Fund. Accordingly, the combined gross investment income is equal to the sum of each Fund's gross investment income. Certain expenses have been adjusted to reflect the expected expenses of the combined entity. The pro forma investment advisory, administration, shareholder servicing and distribution fees of the combined Fund and/are based on the fee schedule in effect for the Surviving Fund at the combined level of average net assets for the twelve months ended February 28, 2001. 26 FORM N-14 PART C - OTHER INFORMATION Item 15. Indemnification. Reference is hereby made to Article V of the Registrant's Declaration of Trust. The Trustees and officers of the Registrant and the personnel of the Registrant's investment adviser, administrator and distributor are insured under an errors and omissions liability insurance policy. The Registrant and its officers are also insured under the fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940. Under the terms of the Registrant's Declaration of Trust, the Registrant may indemnify any person who was or is a Trustee, officer or employee of the Registrant to the maximum extent permitted by law; provided, however, that any such indemnification (unless ordered by a court) shall be made by the Registrant only as authorized in the specific case upon a determination that indemnification of such persons is proper in the circumstances. Such determination shall be made (i) by the Trustees, by a majority vote of a quorum which consists of Trustees who are neither described in Section 2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding, or (ii) if the required quorum is not obtainable or, if a quorum of such Trustees so directs, by independent legal counsel in a written opinion. No indemnification will be provided by the Registrant to any Trustee or officer of the Registrant for any liability to the Registrant or shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of duty. Insofar as the conditional advancing of indemnification monies for actions based upon the Investment Company Act of 1940 may be concerned, such payments will be made only on the following conditions: (i) the advances must be limited to amounts used, or to be used, for the preparation or presentation of a defense to the action, including costs connected with the preparation of a settlement; (ii) advances may be made only upon receipt of a written promise by, or on behalf of, the recipient to repay that amount of the advance which exceeds that amount to which it is ultimately determined that he is entitled to receive from the Registrant by reason of indemnification; and (iii) (a) such promise must be secured by a surety bond, other suitable insurance or an equivalent form of security which assures that any repayments may be obtained by the Registrant without delay or litigation, which bond, insurance or other form of security must be provided by the recipient of the advance, or (b) a majority of a quorum of the Registrant's disinterested, non-party Trustees, or an independent legal counsel in a written opinion, shall determine, based upon a review of readily available facts, that the recipient of the advance ultimately will be found entitled to indemnification. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 16. Exhibits. Declaration of Trust. 1 Declaration of Trust, as amended. (1) 2 By-laws. (1) 3 None. 4 Agreement and Plan of Reorganization filed herewith as Appendix A to the Combined Prospectus/Proxy Statement. 5 None. 6 Form of Investment Advisory Agreement.(6) 7 Distribution and Sub-Administration Agreement dated August 21, 1995.(6) 8(a) Retirement Plan for Eligible Trustees.(6) 8(b) Deferred Compensation Plan for Eligible Trustees.(6) 9 Custodian Agreement. (1) 10(a) Rule 12b-1 Distribution Plan of Mutual Funds including Selected Dealer Agreement and Shareholder Service Agreement. (1) and (3) 10(b) Rule 12b-1 Distribution Plan - Class B Shares (including forms of Selected Dealer Agreement and Shareholder Servicing Agreement).(6) 10(c) Form of Rule 12b-1 Distribution Plan - Class C Shares (including forms of Shareholder Servicing Agreements).(12) 10(d) Form of Rule 18f-3 Multi-Class Plan.(12) 11 None. 12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax Consequences to be filed by Amendment. 13(a) Transfer Agency Agreement. (1) 13(b) Form of Shareholder Servicing Agreement. (6) 13(c) Form of Administration Agreement.(6) 14 None. 15 None. 16 Powers of Attorney for: Fergus Reid, III, H. Richard Vartabedian, William J. Armstrong, John R.H. Blum, Stuart W. Cragin, Jr., Roland R. Eppley, Jr., Joseph J. Harkins, W.D. MacCallan, W. Perry Neff, Richard E. Ten Haken, Irving L. Thode, George E. McDavid. (12) 16(b) Powers of Attorney for: Sarah E. Jones and Leonard M. Spalding, Jr. (12) 17(a) Form of Proxy Card. 17(b) Preliminary Prospectus for the Surviving Fund filed herewith. 17(c) Prospectus for the Merging Fund. 17(d) Preliminary Statement of Additional Information for the Surviving Fund filed herewith. 17(e) Statement of Additional Information for the Merging Fund. (12) 17(f) Annual Report of the Surviving Fund dated August 31, 2000. (12) 17(g) Semi-Annual Report of the Surviving Fund dated February 28, 2001 filed herewith. 17(h) Annual Report of the Merging Fund and the Master Portfolio dated November 30, 2000. (12) - -------------- (1) Filed as an Exhibit to the Registration Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with the Securities and Exchange Commission on February 14, 1994. (2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with the Securities and Exchange Commission on August 29, 1994. (3) Filed as an Exhibit to Post-Effective Amendment No. 2 to the Registration Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with the Securities and Exchange Commission on October 28, 1994. (4) Filed as an Exhibit to Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A of the Registrant (File No. 33-75250) as filed with the Securities and Exchange Commission on October 31, 1995. (5) Filed as an Exhibit to Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on December 28, 1995. (6) Filed as an Exhibit to Post-Effective Amendment No. 5 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on March 7, 1996. (7) Filed as an Exhibit to Post-Effective Amendment No. 6 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on April 22, 1996. (8) Filed as an exhibit to Post-Effective Amendment No. 7 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on September 6, 1996. (9) Filed as an exhibit to Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on December 27, 1996. (10) Filed herewith. (11) Filed as an exhibit to Post-Effective Amendment No. 10 to the Registration Statement on Form N-1A of the Registrant as filed with the Securities and Exchange Commission on October 27, 1997. (12) Filed as an Exhibit to the Registration Statement of the Registrant on Form N-14 (File No. 333-59040, as filed with the Securities and Exchange Commission on April 16, 2001.) Item 17. Undertakings. - -------------- (1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, as amended (the "1933 Act"), the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. SIGNATURES As required by the Securities Act of 1933, this registration statement has been signed on behalf of the registrant, in the City of New York and the State of New York, on the 15th day of May, 2001. MUTUAL FUND TRUST Registrant By: /s/ Fergus Reid, III ----------------------------------------- Fergus Reid, III Chairman Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities indicated on May 15, 2001. * Chairman and Trustee - ------------------------------------- Fergus Reid, III * President - ------------------------------------- and Trustee H. Richard Vartabedian * Trustee - ------------------------------------- William J. Armstrong * Trustee - ------------------------------------- John R.H. Blum * Trustee - ------------------------------------- Stuart W. Cragin, Jr. * Trustee - ------------------------------------- Roland R. Eppley, Jr. * Trustee - ------------------------------------- Joseph J. Harkins * Trustee - ------------------------------------- Sarah E. Jones * Trustee - ------------------------------------- W.D. MacCallan * Trustee - ------------------------------------- W. Perry Neff * Trustee - ------------------------------------- Leonard M. Spalding, Jr. * Trustee - ------------------------------------- Irv Thode * Trustee - ------------------------------------- Richard E. Ten Haken * Trustee - ------------------------------------- George E. McDavid /s/ Martin R. Dean Treasurer and - ------------------------------------ Principal Financial Martin R. Dean Officer /s/ Peter B. Eldridge Attorney in Fact - ------------------------------------- Peter B. Eldridge EXHIBITS ITEM DESCRIPTION - ---- ----------- (17) (a) Form of Proxy Card. (b) Preliminary Prospectus for the Surviving Fund. (d) Preliminary Statement of Additional Information for the Surviving Fund (g) Semi-Annual Report of the Surviving Fund dated February 28, 2001. EX-99.17(A) 2 a2047272zex-99_17a.txt EXH. 99.17(A) PROXY CARD FORM OF PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES FOR THE SPECIAL MEETING OF THE SHAREHOLDERS TO BE HELD ON JULY 3, 2001. The undersigned hereby appoints Judy R. Bartlett, Joseph J. Bertini, and Peter B. Eldridge, and each of them, attorneys and proxies for the undersigned, with full power of substitution, and revocation to represent the undersigned and to vote on behalf of the undersigned all shares of the Fund, which the undersigned is entitled to vote at the Special Meeting of Shareholders to be held at 1211 Avenue of the Americas, 41st Floor, New York, NY. 10036 on July 3, 2001, at 9:00 a.m., and at any adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of the Special Meeting of Shareholders and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Special Meeting of Shareholders in person or by substitute (or, if only one shall be so present, then that one) and shall have and may exercise all of the power and authority of said proxies hereunder. The undersigned hereby revokes any proxy previously given. PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. Note: Please sign exactly as your name appears on this Proxy. If joint owners, EITHER may sign this proxy. When signing as attorney, executor, administrator, trustee, guardian or Corporate officer, please give your full title. HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS? - ------------------------------------ --------------------------- - ------------------------------------ --------------------------- - ------------------------------------ --------------------------- /X/ PLEASE MARK VOTES AS IN THIS EXAMPLE Mark box at right if an address change or comment has been / / noted on the reverse side of this card. CONTROL NUMBER: RECORD DATE SHARES: Please be sure to sign and date this Proxy. Date - ------------------------------------------------------------------------------- - --------Shareholder sign here--------------------------Co-owner sign here------ DETACH CARD DETACH CARD VOTE BY TELEPHONE It's fast, convenient, and immediate! Call Toll-Free on a Touch-Tone Phone FOLLOW THESE FOUR EASY STEPS: 1. READ THE ACCOMPANYING COMBINED PROSPECTUS/PROXY STATEMENT. 2. CALL THE TOLL-FREE NUMBER 1-877-PRX-VOTE (1-877-779-8683). THERE IS NO CHARGE FOR THIS CALL. 3. ENTER YOUR CONTROL NUMBER LOCATED ON YOUR PROXY CARD. 4. FOLLOW THE RECORDED INSTRUCTIONS. YOUR VOTE IS IMPORTANT! Call 1-877-PRX-VOTE anytime! 1. To approve or disapprove the Reorganization. For Against Abstain / / / / / / For All With- For All 2. To elect Trustees to serve as members of the Nominees hold Except Board of Trustees of the Trust. / / / / / / (01) William J. Armstrong (02) Roland R. Eppley, Jr. (03) Ann Maynard Gray (04) Matthew Healey (05) Fergus Reid, III (06) James J. Schonbachler (07) Leonard M. Spalding, Jr. (08) H. Richard Vartabedian NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S) OF THE NOMINEE(S). YOUR SHARES WILL BE VOTED FOR THE REMAINING NOMINEE(S). 3. To transact such other business as may properly come before the Special Meeting or any adjournment thereof. DETACH CARD VOTE BY INTERNET It's fast, convenient, and your vote is immediately confirmed and posted. FOLLOW THESE FOUR EASY STEPS: 1. READ THE ACCOMPANYING COMBINED PROSPECTUS/PROXY STATEMENT. 2. GO TO THE WEBSITE http://www.eproxyvote.com/pptxx 3. ENTER YOUR CONTROL NUMBER LOCATED ON YOUR PROXY CARD. 4. FOLLOW THE INSTRUCTIONS PROVIDED. YOUR VOTE IS IMPORTANT! Go to http://www.eproxyvote.com/pptxx anytime! DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET EX-99.17(B) 3 a2047272zex-99_17b.txt EXH. 99.17(B) PRELIMINARY PROS - SURVIVOR PROSPECTUS AUGUST , 2001 SUBJECT TO COMPLETION, DATED MAY 11, 2001 The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any state where the offer or sale is not permitted. - -------------------------------------------------------------------------------- JP MORGAN MONEY MARKET FUNDS THIS PROSPECTUS OFFERS: CASH MANAGEMENT SHARES PRIME MONEY MARKET FUND THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. [LOGO] JPMORGAN FLEMING ASSET MANAGEMENT rhp-5349 Prime Money Market Fund ..............................1 Who May Want to Invest ...............................5 The Fund's Management and Administration .............6 How Your Account Works ...............................7 Buying Fund Shares ...................................7 Selling Fund Shares ..................................8 Other Information Concerning the Funds ...............8 Distributions and Taxes ..............................9 What the Terms Mean .................................11 How To Reach Us .............................Back cover - -------------------------------------------------------------------------------- JPMORGAN PRIME MONEY MARKET FUND THE FUND'S OBJECTIVE The Fund aims to provide the highest possible level of current income while still maintaining liquidity and preserving capital. THE FUND'S MAIN INVESTMENT STRATEGY The Fund invests in high quality, short-term money market instruments which are issued and payable in U.S. dollars. The Fund principally invests in: - - high quality commercial paper and other short-term debt securities, including floating and variable rate demand notes of U.S. and foreign corporations - - debt securities issued or guaranteed by qualified banks. These are: - U.S. banks with more than $1 billion in total assets, and foreign branches of these banks - foreign banks with the equivalent of more than $10 billion in total assets and which have branches or agencies in the U.S. - other U.S. or foreign commercial banks which the Fund's adviser judges to have comparable credit standing - - securities issued or guaranteed by the U.S. Government, its agencies or authorities - - asset-backed securities - - repurchase agreements The dollar weighted average maturity of the Fund will generally be 60 days or less and the Fund will buy only those instruments which have remaining maturities of 397 days or less. The Fund may invest any portion of its assets in debt securities issued or guaranteed by U.S. banks and their foreign branches. These include certificates of deposit, time deposits and bankers' acceptances. The Fund invests only in securities issued and payable in U.S. dollars. Each investment must have the highest possible short-term rating from at least two national rating organizations, or one such rating if only one organization rates that security. Alternatively, some securities may have additional third party guarantees in order to meet the rating requirements mentioned above. If the security is not rated, it must be considered of comparable quality by the Fund's adviser. The Fund seeks to develop an appropriate portfolio by considering the differences in yields among securities of different maturities, market sectors and issuers. The Fund seeks to maintain a net asset value of $1.00 per share. The Fund may change any of its investment policies (except its investment objective) without shareholder approval. Shareholders of the Fund are currently considering a proposal that would allow the Fund to change its investment objective without shareholder approval. 1 JPMORGAN PRIME MONEY MARKET FUND - -------------------------------------------------------------------------------- THE MAIN INVESTMENT RISKS The Fund attempts to keep its net asset value constant, but there's no guarantee it will be able to do so. The value of short-term debt securities tends to fall when prevailing interest rates rise, although they're generally less sensitive to interest rate changes than longer-term securities. Repurchase agreements involve some risk to the Fund if the other party does not live up to its obligations under the agreement. The Fund's ability to concentrate its investments in the banking industry could increase risks. The profitability of banks depends largely on the availability and cost of funds, which can change depending upon economic conditions. Banks are also exposed to losses if borrowers get into financial trouble and can't repay their loans. Investments in foreign banks and other foreign issuers may be riskier than investments in the United States. That could be, in part, because of difficulty converting investments into cash, political and economic instability, the imposition of government controls, or regulations that don't match U.S. standards. Although the Fund seeks to be fully invested, it may at times hold some of its assets in cash. This would hurt the Fund's performance. [SIDENOTE] INVESTMENTS IN THE FUND ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND. SECURITIES IN THE FUND'S PORTFOLIO MAY NOT EARN AS HIGH A CURRENT INCOME AS LONGER TERM OR LOWER-QUALITY SECURITIES. 2 JPMORGAN PRIME MONEY MARKET FUND - -------------------------------------------------------------------------------- THE FUND'S PAST PERFORMANCE (UNAUDITED) This section shows the Fund's performance record with respect to the Fund's Premier Class Shares. Prior to the date of this prospectus, the Fund did not offer Cash Management Class Shares, which will be introduced as of the date of this prospectus. The bar chart shows how the performance of the Fund's shares has varied from calendar year to calendar year over the life of the Fund. This provides some indication of the risks of investing in the Fund. The table shows the average annual total returns for the past one year, five years and ten years (or if less than such periods, the life of the Fund). During these periods, the actual returns of Cash Management Class Shares would have been lower than shown because Cash Management Class Shares have higher expenses than Premier Class Shares. Past performance does not predict how any class of the Fund will perform in the future. The calculations assume that all dividends and distributions are reinvested in the Fund. Some of the companies that provide services to the Fund have in the past agreed not to collect some expenses and to reimburse others. Without these agreements, the performance figures would be lower than those shown. [CHART]
YEAR-BY-YEAR RETURNS(1),(2) 1994 4.10% 1995 5.66% 1996 5.20% 1997 5.37% 1998 5.32% 1999 4.97% 2000 6.18%
THE FUND'S YEAR-TO-DATE TOTAL RETURN AS OF 3/31/01 WAS 1.37% BEST QUARTER 1.59% - ---------------------------------- 3rd quarter, 2000 - ---------------------------------- WORST QUARTER 0.75% - ---------------------------------- 1st quarter, 1994 - ----------------------------------
AVERAGE ANNUAL TOTAL RETURN (%) Shows performance over time, for periods ended December 31, 2000(1)
LIFE OF PAST 1 YR. PAST 5 YRS. FUND - -------------------------------------------------------------------------------- PRIME MONEY MARKET FUND (AFTER EXPENSES) 6.18% 5.41% 5.20% - --------------------------------------------------------------------------------
(1) PREMIER CLASS SHARES COMMENCED OPERATIONS ON 11/15/93. (2) THE FUND'S FISCAL YEAR END IS 8/31. 3 JPMORGAN PRIME MONEY MARKET FUND - -------------------------------------------------------------------------------- ESTIMATED INVESTOR EXPENSES FOR CASH MANAGEMENT SHARES The estimated expenses of the Cash Management Class before and after reimbursement are shown below. The Cash Management Class has no sales, redemption or account fees and generally no exchange fees, although some institutions may charge you a fee for shares you buy through them. ESTIMATED ANNUAL OPERATING EXPENSES (%) (EXPENSES THAT ARE DEDUCTED FROM CASH MANAGEMENT CLASS ASSETS)
SHARE- DISTRIBUTION HOLDER TOTAL FEE WAIVER MANAGEMENT (RULE 12B-1) SERVICE OTHER OPERATING AND EXPENSE NET FEES FEES FEES EXPENSES(3) EXPENSES REIMBURSEMENT(4) EXPENSES(4) - ------------------------------------------------------------------------------------------------------------------------ CASH MANAGEMENT CLASS SHARES 0.10% 0.25% 0.50% 0.16% 1.01% 0.04% 0.97% - ------------------------------------------------------------------------------------------------------------------------
EXPENSE EXAMPLE(4) The example below is intended to help you compare the cost of investing in the Cash Management Class with the cost of investing in other mutual funds. The example assumes: - - $10,000 initial investment - - 5% return each year - - net expenses for three years and total operating expenses thereafter, and - - all shares sold at the end of each time period. The example is for comparison only; the actual return of the Cash Management Class and your actual costs may be higher or lower.
1 YR. 3 YRS. - -------------------------------------------------------------------------------- YOUR COST ($) 99 309 - --------------------------------------------------------------------------------
(3) "OTHER EXPENSES" ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR. (4) REFLECTS A WRITTEN AGREEMENT PURSUANT TO WHICH JPMORGAN CHASE AGREES THAT IT OR ONE OF ITS AFFILIATES WILL REIMBURSE THE FUND TO THE EXTENT TOTAL OPERATING EXPENSES OF THE CASH MANAGEMENT CLASS (EXCLUDING INTEREST, TAXES, EXTRAORDINARY EXPENSES AND EXPENSES RELATED TO THE DEFERRED COMPENSATION PLAN) EXCEED 0.97% OF ITS AVERAGE DAILY NET ASSETS FOR THREE YEARS. 4 - -------------------------------------------------------------------------------- WHO MAY WANT TO INVEST THE FUND IS DESIGNED FOR INVESTORS WHO: - - want an investment that strives to preserve capital - - want regular income from a high quality portfolio - - want a highly liquid investment - - are looking for an interim investment - - are pursuing a short-term goal THE FUND IS NOT DESIGNED FOR INVESTORS WHO: - - are investing for long-term growth - - are investing for high income - - require the added security of the FDIC insurance 5 - -------------------------------------------------------------------------------- THE FUND'S MANAGEMENT AND ADMINISTRATION The Fund is a series of Mutual Fund Trust, a Massachusetts business trust. The trustees of the trust are responsible for overseeing all business activities. THE FUND'S ADMINISTRATOR The Chase Manhattan Bank (the Administrator) provides administrative services, oversees the Fund's other service providers and provides Fund officers. The Administrator receives the following annual fee on behalf of the Fund for administrative services: 0.10% of the Fund's pro-rata portion of the first $100 billion of average net assets of all money market funds in the JPMorgan Funds complex plus 0.05% of average net assets over $100 billion. THE FUND'S INVESTMENT ADVISER J.P. Morgan Fleming Asset Management (USA), Inc. (JPMFAM (USA)) is the investment adviser to the Fund and makes the day-to-day investment decisions for the Fund. JPMFAM (USA) is a wholly owned subsidiary of J.P. Morgan Chase & Co. (JPMorgan Chase), a bank holding company. JPMFAM (USA) is located at 522 5th Avenue, New York, NY 10036. Prior to February 28, 2001 the adviser to the Fund was The Chase Manhattan Bank (Chase). For the fiscal year ended August 31, 2000, Chase was paid management fees (net of waivers) of 0.10% of the average daily net assets of the Fund. 6 - -------------------------------------------------------------------------------- HOW YOUR ACCOUNT WORKS BUYING FUND SHARES You don't pay any sales charge (sometimes called a load) when you buy these shares in the Fund. The price you pay for your shares is the net asset value per share (NAV). NAV is the value of everything the Fund owns, minus everything it owes, divided by the number of shares held by investors. The Fund seeks to maintain a stable NAV of $1.00. The Fund uses the amortized cost method to value its portfolio of securities. This method provides more stability in valuations. However, it may also result in periods during which the stated value of a security is different than the price the Fund would receive if it sold the investment. The NAV of each class of shares is generally calculated by 5:00 p.m. Eastern time each day the Fund is accepting orders. You'll pay the next NAV calculated after the JPMorgan Funds Service Center receives your order in proper form. An order is in proper form only after funds are converted into federal funds. INVESTING THROUGH A SERVICE ORGANIZATION Prospective investors may only purchase shares of the Fund with the assistance of a service organization. Your service organization is paid by the Fund to assist you in establishing your account, executing transactions, and monitoring your investment. The minimum amount for initial investments in the Fund by a service organization is $10,000,000 and for additional investments $25,000, although these minimums may be less for some investors. Service organizations may provide the following services in connection with their customers' investments in the Fund: - - Acting, directly or through an agent, as the sole shareholder of record - - Maintaining account records for customers - - Processing orders to purchase, redeem or exchange shares for customers - - Responding to inquiries from shareholders - - Assisting customers with investment procedures. Shares are available on any business day the Federal Reserve Bank of New York and the New York Stock Exchange are open. If we receive your order by the Fund's cut-off time, we'll process your order at that day's price and you'll be entitled to all dividends declared that day. If we receive your order after the cut-off time, we'll generally process it at the next day's price. Service organizations will be responsible for transmitting accepted orders and payments to the Fund by the cut-off time. Normally, the Fund's cut-off (in Eastern time) is 5:00 p.m. The service organization could set earlier cut-off times. The Fund may close earlier a few days each year if the Public Securities Association recommends that the U.S. Government securities market close trading early. 7 HOW YOUR ACCOUNT WORKS - -------------------------------------------------------------------------------- You must provide a Taxpayer Identification Number when you open an account. The Fund has the right to reject any purchase order. TO OPEN AN ACCOUNT, BUY OR SELL SHARES OR GET FUND INFORMATION, CALL: THE JPMORGAN FUNDS SERVICE CENTER 1-800-622-4273 Your service organization may charge you a fee and may offer additional services, such as special purchase redemption programs, "sweep" programs, cash advances and redemption checks. Your service organization may set different minimum investments and earlier cut-off times. SELLING FUND SHARES When you sell your shares you'll receive the next NAV calculated after the JPMorgan Funds Service Center accepts your order in proper form. We ask that you tell us early in the day if you plan to sell your shares so we can effectively manage the Fund. If you purchase your shares by uncertified check, you cannot sell those shares until 15 calendar days after your purchase. We will need the names of the registered shareholders and your account number before we can sell your shares. We will send the proceeds from the sale to you on the same day if we receive your request before the Fund's cut-off time. The money will be sent the next day for requests we receive after this deadline. Federal law allows the Fund to suspend a sale or postpone payment for more than seven business days under unusual circumstances. SELLING SHARES THROUGH YOUR SERVICE ORGANIZATIONS Tell your service organization that you want to sell shares. They'll send all necessary documents to the JPMorgan Funds Service Center. REDEMPTIONS-IN-KIND The Fund reserves the right to make redemptions of over $250,000 in securities rather than in cash. EXCHANGING SHARES You can exchange your shares for shares in certain other JPMorgan Funds. For tax purposes, an exchange is treated as a sale of Fund shares. Carefully read the prospectus of the Fund you want to buy before making an exchange. You should not exchange shares as a means of short-term trading as this could increase management costs and affect all shareholders. We reserve the right to limit the number of exchanges or to refuse an exchange. We may also terminate this privilege. We charge an administration fee of $5 for each exchange if you make more than 10 exchanges in a year or three in a quarter. See the Statement of Additional Information to find out more about the exchange privilege. OTHER INFORMATION CONCERNING THE FUNDS We may close your account if the balance falls below the minimum because you've sold shares. We may also close the account if you fail to meet the investment minimum over a twelve-month period. We'll give you 60 days notice before closing your account. 8 HOW YOUR ACCOUNT WORKS - -------------------------------------------------------------------------------- Unless you indicate otherwise on your account application, we are authorized to act on redemption and transfer instructions received by phone. If someone trades on your account by phone, we'll ask that person to confirm your account registration and address to make sure they match those you provided us. If they give us the correct information, we are generally authorized to follow that person's instructions. We'll take all reasonable precautions to confirm that the instructions are genuine. Investors agree that they will not hold the Fund liable for any loss or expenses from any sales request, if the Fund takes reasonable precautions. The Fund will be liable for any losses to you from an unauthorized sale or fraud against you if we do not follow reasonable procedures. You may not always reach the JPMorgan Funds Service Center by telephone. This may be true at times of unusual market changes and shareholder activity. You can mail us your instructions or contact your investment representative or agent. We may modify or cancel the sale of shares by phone without notice. J.P. Morgan Fund Distributors, Inc. (JPM) is the distributor for the Fund. It is a subsidiary of The BISYS Group, Inc. and is not affiliated with JPMorgan Chase. The Fund has adopted a Rule 12b-1 distribution plan under which it pays to JPM (and other broker-dealers) annual distribution fees of up to 0.25% of the average daily net assets attributed to Cash Management Shares. This payment covers such things as compensation for services provided by broker-dealers and expenses connected to the sale of shares. Payments are not tied to actual expenses incurred. Because 12b-1 expenses are paid out of the Fund's assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than other types of sales charges. The Fund has agreements with certain shareholder servicing agents (including The Chase Manhattan Bank) under which the shareholder servicing agents have agreed to provide certain support services to their customers. For performing these services, each shareholder servicing agent receives an annual fee of up to 0.50% of the average daily net assets of the Cash Management Shares of the Fund held by investors serviced by the shareholder servicing agent. The Board of Trustees has determined that the amount payable for "service fees" (as defined by the NASD) does not exceed 0.25% of the average annual net assets attributable to the Cash Management Shares of each Fund. JPMFAM (USA) and/or JPM may, at their own expense, make additional payments to certain selected dealers or other shareholder servicing agents for performing administrative services for their customers. The Fund may issue multiple classes of shares. This prospectus relates only to Cash Management Shares of the Fund. Each class may have different requirements for who may invest, and may have different sales charges and expense levels. A person who gets compensated for selling Fund shares may receive a different amount for each class. DISTRIBUTIONS AND TAXES The Fund can earn income and can realize capital gain. The Fund deducts 9 HOW YOUR ACCOUNT WORKS - -------------------------------------------------------------------------------- any expenses and then pays out these earnings to shareholders as distributions. The Fund declares dividends daily, so your shares can start earning dividends on the day you buy them. We distribute the dividends monthly in the form of additional shares, unless you tell us that you want payment in cash or deposited in a pre-assigned bank account. The taxation of dividends won't be affected by the form in which you receive them. We distribute any short-term capital gain at least annually. The Fund does not expect to realize long-term capital gain. Dividends are usually taxable as ordinary income at the federal, state and local levels. Dividends earned on bonds issued by the U.S. government and its agencies may also be exempt from some types of state and local taxes. If you receive distributions of net capital gain, the tax rate will be based on how long the Fund held a particular asset, not on how long you have owned your shares. Early in each calendar year, the Fund will send you a notice showing the amount of distributions you received in the preceding year and the tax status of those distributions. Any investor for whom the Fund does not have a valid taxpayer identification number will be subject to backup withholding for taxes. The tax considerations described in this section do not apply to tax-deferred accounts or other non-taxable entities. The above is only a general summary of tax implications of investing in these Funds. Please consult your tax advisor to see how investing in the Fund will affect your own tax situation. 10 - -------------------------------------------------------------------------------- WHAT THE TERMS MEAN COMMERCIAL PAPER: Short-term securities with maturities of 1 to 270 days which are issued by banks, corporations and others. DEMAND NOTES: A debt security with no set maturity date. The investor can generally demand payment of the principal at any time. DISTRIBUTION FEE: covers the cost of the distribution system used to sell shares to the public. DOLLAR WEIGHTED AVERAGE MATURITY: The average maturity of the Fund is the average amount of time until the organizations that issued the debt securities in the Fund's portfolio must pay off the principal amount of the debt. "Dollar weighted" means the larger the dollar value of debt security in the Fund, the more weight it gets in calculating this average. FLOATING RATE SECURITIES: Securities whose interest rates adjust automatically whenever a particular interest rate changes. LIQUIDITY: Liquidity is the ability to easily convert investments into cash without losing a significant amount of money in the process. MANAGEMENT FEE: a fee paid to the investment adviser to manage the Fund and make decisions about buying and selling the Fund's investments. MUNICIPAL LEASE OBLIGATIONS: These provide participation in municipal lease agreements and installment purchase contracts, but are not part of the general obligations of the municipality. OTHER EXPENSES: Miscellaneous items, including transfer agency, administration, custody and registration fees. REPURCHASE AGREEMENTS: A special type of a short-term investment. A dealer sells securities to a Fund and agrees to buy them back later for a set price. In effect, the dealer is borrowing the Fund's money for a short time, using the securities as collateral. SHAREHOLDER SERVICE FEE: a fee to cover the cost of paying shareholder servicing agents to provide certain support services for your account. VARIABLE RATE SECURITIES: Securities whose interest rates are periodically adjusted. 11 - -------------------------------------------------------------------------------- HOW TO REACH US MORE INFORMATION You'll find more information about the Fund in the following documents: ANNUAL AND SEMI-ANNUAL REPORTS Our annual and semi-annual reports contain more information about the Fund's investments and performance. STATEMENT OF ADDITIONAL INFORMATION (SAI) The SAI contains more detailed information about the Fund and its policies. It is incorporated by reference into this prospectus. That means, by law, it's considered to be part of this prospectus. You can get a free copy of these documents and other information, or ask us any questions, by calling us at 1-800-622-4273 or writing to: JPMORGAN FUNDS SERVICE CENTER P.O. BOX 219392 KANSAS CITY, MO 64121-9392 If you buy your shares through an institution, you should contact that institution directly for more information. You can also find information online at www.jpmorganfunds.com on the internet. You can write or e-mail the SEC's Public Reference Room and ask them to mail you information about the Fund, including the SAI. They'll charge you a copying fee for this service. You can also visit the Public Reference Section, and copy the documents while you're there. PUBLIC REFERENCE SECTION OF THE SEC WASHINGTON, DC 20549-0102. 1-202-942-8090 EMAIL: publicinfo@sec.gov Reports, a copy of the SAI and other information about the Funds is also available on the SEC's website at http://www.sec.gov. The Fund's Investment Company Act File No. is 811-08358. JPMorgan Funds Fulfillment Center 393 Manley Street West Bridgewater, MA 02379-1039 (C)2001 JPMorgan Chase & Co. All Rights Reserved. March 2001 rhp-5349 EX-99.17(D) 4 a2047272zex-99_17d.txt EXH. 99.17(D) PRELIMINARY SAI - SURVIVOR **************************************************************************** The information in this statement of additional information is not complete and may be changed. This statement of additional information and the accompanying prospectus are not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. **************************************************************************** JPMorgan Funds STATEMENT OF ADDITIONAL INFORMATION AUGUST , 2001 (SUBJECT TO COMPLETION, DATED MAY 11, 2001) JPMORGAN PRIME MONEY MARKET FUND JPMORGAN FEDERAL MONEY MARKET FUND JPMORGAN TREASURY PLUS MONEY MARKET FUND JPMORGAN TAX FREE MONEY MARKET FUND 522 FIFTH AVENUE, NEW YORK, NEW YORK 10036 This Statement of Additional Information sets forth information which may be of interest to investors but which is not necessarily included in the Prospectuses offering shares of the Funds. This Statement of Additional Information should be read in conjunction with the Prospectuses dated August __, 2001 offering shares of JPMorgan Prime Money Market Fund, JPMorgan Federal Money Market Fund, JPMorgan Treasury Plus Money Market Fund, and JPMorgan Tax Free Money Market Fund (collectively the "Money Market Funds"). Any reference to a "Prospectus" in this Statement of Additional Information is a reference to one or more of the foregoing Prospectuses, as the context requires. Copies of each Prospectus may be obtained by an investor without charge by contacting J.P. Morgan Fund Distributors, Inc., the Funds' distributor (the "Distributor"), at the above-listed address. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. For more information about your account, simply call or write the JPMorgan Funds Service Center at: 1-800-622-4273 JPMorgan Funds Service Center P.O. Box 419392 Kansas City, MO 64141 MFT-SAI-401
TABLE OF CONTENTS PAGE - --------------------------------------------------------------------------------------------------------------------------- The Funds..................................................................................................... 3 Investment Policies and Restrictions.......................................................................... 4 Performance Information....................................................................................... 23 Determination of Net Asset Value.............................................................................. 29 Purchases, Redemptions and Exchanges.......................................................................... 30 Distributions; Tax Matters.................................................................................... 34 Management of the Trust and Funds............................................................................. 39 Independent Accountants....................................................................................... 56 Certain Regulatory Matters.................................................................................... 56 General Information........................................................................................... 57 Appendix A--Description of Certain Obligations Issued or Guaranteed by U.S. Government Agencies or Instrumentalities.............................................................................. A-1 Appendix B--Description of Ratings............................................................................. B-1
2 THE FUNDS Mutual Fund Trust (the "Trust") is an open-end management investment company which was organized as a business trust under the laws of the Commonwealth of Massachusetts on February 4, 1994. The Trust presently consists of separate series (the "Funds"). Certain of the Funds are diversified and other Funds are non-diversified, as such term is defined in the Investment Company Act of 1940, as amended (the "1940 Act"). The shares of the Funds are collectively referred to in this Statement of Additional Information as the "Shares." On December 4, 1992, the shareholders of each of the existing classes of Shares of Vista Global Money Market Fund and Vista U.S. Government Money Market Fund approved the reorganization of each of such Funds into newly-created series of Mutual Fund Group, effective January 1, 1993. Prior to such approvals, on December 4, 1992, the shareholders of each of the five existing series of Trinity Assets Trust (Trinity Money Market Fund, Trinity Government Fund, Trinity Bond Fund, Trinity Short-Term Bond Fund and Trinity Equity Fund) (collectively, the "Trinity Funds") approved the reorganization of each of the Trinity Funds into newly-created series of the Trust, effective January 1, 1993. Vista Global Money Market Fund and Trinity Money Market Fund were reorganized into classes of Shares of "Vista Worldwide Money Market Fund", which changed its name to "Vista Global Money Market Fund" as of December 31, 1992. Vista U.S. Government Money Market Fund and Trinity Government Fund were reorganized into classes of Shares of "Vista Government Cash Fund", which changed its name to "Vista U.S. Government Money Market Fund" as of December 31, 1992. On August 25, 1994, the shareholders of each of the existing classes of Shares of the Vista U.S. Government Money Market Fund, Vista Global Money Market Fund, Vista Prime Money Market Fund, Vista Tax Free Money Market Fund, Vista California Money Market Fund, Vista New York Tax Free Money Market Fund, and the Vista California Intermediate Tax Free Fund approved the reorganization of each of such Funds into newly-created series of Mutual Fund Trust, effective October 28, 1994. Prior to such approvals, each of such Funds were series of Mutual Fund Group, an affiliated investment company. On May 3, 1996, The U.S. Treasury Money Market Fund of The Hanover Funds, Inc. ("Hanover") merged into the Vista Shares of Treasury Plus Money Market Fund, The Government Money Market Fund of Hanover merged into the Vista Shares of U.S. Government Money Market Fund, The Tax Free Money Market Fund of Hanover merged into the Vista Shares of Tax Free Money Market Fund, The New York Tax Free Money Market Fund of Hanover merged into the Vista Shares of New York Tax Free Money Market Fund, and The 100% U.S. Treasury Securities Money Market Fund of Hanover merged into the Vista Shares of The 100% U.S. Treasury Securities Money Market Fund. The foregoing mergers are referred to herein as the "Hanover Reorganization." The Board of Trustees of the Trust provides broad supervision over the affairs of the Trust including the Funds. The J.P. Morgan Fleming Asset Management (USA) Inc. is the investment adviser for the Funds. The Chase Manhattan Bank also serves as the Trust's administrator (the "Administrator") and supervises the overall administration of the Trust, including the Funds. A majority of the Trustees of the Trust are not affiliated with the investment adviser or sub-advisers. Effective February 28, 2001, the following Funds were renamed with approval of the Board of Trustees of the Trust.
New Name Former Name - -------- ----------- JPMorgan Prime Money Market Fund Chase Vista Prime Money Market Fund JPMorgan Federal Money Market Fund Chase Vista Federal Money Market Fund JPMorgan Treasury Plus Money Market Fund Chase Vista Treasury Plus Money Market Fund JPMorgan Tax Free Money Market Fund Chase Vista Tax Free Money Market Fund
3 INVESTMENT POLICIES AND RESTRICTIONS INVESTMENT POLICIES The Prospectuses set forth the various investment policies applicable to each Fund. The following information supplements and should be read in conjunction with the related sections of each Prospectus. As used in this Statement of Additional Information, with respect to those Funds and policies for which they apply, the terms "Municipal Obligations" and "tax-exempt securities" have the meanings given to them in the relevant Fund's Prospectus. For descriptions of the securities ratings of Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch"), see Appendix B. The Money Market Funds invest only in U.S. dollar-denominated high-quality obligations which are determined to present minimal credit risks. This credit determination must be made in accordance with procedures established by the Board of Trustees. The management style used for the Funds emphasizes several key factors. Portfolio managers consider the security quality that is, the ability of the debt issuer to make timely payments of principal and interest. Also important in the analysis is the relationship of a bond's yield and its maturity, in which the managers evaluate the risks of investing in long-term higher-yielding securities. Managers also use a computer model to simulate possible fluctuations in prices and yields if interest rates change. Another step in the analysis is comparing yields on different types of securities to determine relative risk/reward profiles. U.S. GOVERNMENT SECURITIES. Each Fund may invest in direct obligations of the U.S. Treasury. Each Fund other than the Treasury Plus Money Market Fund may also invest in other obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities (collectively, "U.S. Government Securities.") U.S. Government Securities include (1) U.S. Treasury obligations, which generally differ only in their interest rates, maturities and times of issuance, including U.S. Treasury bills (maturities of one year or less), U.S. Treasury notes (maturities of one to ten years) and U.S. Treasury bonds (generally maturities of greater than ten years); and (2) obligations issued or guaranteed by U.S. Government agencies and instrumentalities which are supported by any of the following: (A) the full faith and credit of the U.S. Treasury, (B) the right of the issuer to borrow any amount listed to a specific line of credit from the U.S. Treasury, (C) discretionary authority of the U.S. Government to purchase certain obligations of the U.S. Government agency or instrumentality or (D) the credit of the agency or instrumentality. Agencies and instrumentalities of the U.S. Government include but are not limited to: Federal Land Banks, Federal Financing Banks, Banks for Cooperatives, Federal Intermediate Credit Banks, Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Student Loan Marketing Association, United States Postal Service, Chrysler Corporate Loan Guarantee Board, Small Business Administration, Tennessee Valley Authority and any other enterprise established or sponsored by the U.S. Government. Certain U.S. Government Securities, including U.S. Treasury bills, notes and bonds, Government National Mortgage Association certificates and Federal Housing Administration debentures, are supported by the full faith and credit of the United States. Other U.S. Government Securities are issued or guaranteed by federal agencies or government sponsored enterprises and are not supported by the full faith and credit of the United States. In the case of securities not backed by the "full faith and credit" of the U.S. Government, the investor must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may not be able to assert a claim against the U.S. Government itself in the event the agency or instrumentality does not meet its commitment. These securities include obligations that are supported by the right of the issuer to borrow from the U.S. Treasury, such as obligations of Federal 4 Home Loan Banks, and obligations that are supported by the creditworthiness of the particular instrumentality, such as obligations of the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation. Vista Federal Money Market Fund generally limits its investments in agency and instrumentality obligations to obligations the interest on which is generally not subject to state and local income taxes by reason of federal law. Agencies and instrumentalities issuing such obligations include the Farm Credit System Financial Assistance Corporation, the Federal Financing Bank, The General Services Administration, Federal Home Loan Banks, the Tennessee Valley Authority and the Student Loan Marketing Association. For a description of certain obligations issued or guaranteed by U.S. Government agencies and instrumentalities, see Appendix A. In addition, certain U.S. Government agencies and instrumentalities issue specialized types of securities, such as guaranteed notes of the Small Business Administration, Federal Aviation Administration, Department of Defense, Bureau of Indian Affairs and Private Export Funding Corporation, which often provide higher yields than are available from the more common types of government-backed instruments. However, such specialized instruments may only be available from a few sources, in limited amounts, or only in very large denominations; they may also require specialized capability in portfolio servicing and in legal matters related to government guarantees. While they may frequently offer attractive yields, the limited-activity markets of many of these securities means that, if a Fund were required to liquidate any of them, it might not be able to do so advantageously; accordingly, each Fund investing in such securities intends normally to hold such securities to maturity or pursuant to repurchase agreements, and would treat such securities (including repurchase agreements maturing in more than seven days) as illiquid for purposes of its limitation on investment in illiquid securities. BANK OBLIGATIONS. The JPMorgan Prime Money Market Fund may invest in bank obligations, when consistent with their overall objectives and policies. The JPMorgan Tax Free Money Market Fund may invest without limitation in Municipal Obligations (as defined below) secured by letters of credit or guarantees from U.S. banks (including their foreign branches) and may also invest in Municipal Obligations backed by foreign institutions. Investments in bank obligations are limited to those of U.S. banks (including their foreign branches) which have total assets at the time of purchase in excess of $1 billion and the deposits of which are insured by either the Bank Insurance Fund or the Savings and Loan Insurance Fund of the Federal Deposit Insurance Corporation, and foreign banks (including their U.S. branches) having total assets in excess of $10 billion (or the equivalent in other currencies), and such other U.S. and foreign commercial banks which are judged by the advisers to meet comparable credit standing criteria. Bank obligations include negotiable certificates of deposit, bankers' acceptances, fixed time deposits and deposit notes. A certificate of deposit is a short-term negotiable certificate issued by a commercial bank against funds deposited in the bank and is either interest-bearing or purchased on a discount basis. A bankers' acceptance is a short-term draft drawn on a commercial bank by a borrower, usually in connection with an international commercial transaction. The borrower is liable for payment as is the bank, which unconditionally guarantees to pay the draft at its face amount on the maturity date. Fixed time deposits are obligations of branches of United States banks or foreign banks which are payable at a stated maturity date and bear a fixed rate of interest. Although fixed time deposits do not have a market, there are no contractual restrictions on the right to transfer a beneficial interest in the deposit to a third party. Fixed time deposits subject to withdrawal penalties and with respect to which a Fund cannot realize the proceeds thereon within seven days are deemed "illiquid" for the purposes of its restriction on investments in illiquid securities. Deposit notes are notes issued by commercial banks which generally bear fixed rates of interest and typically have original maturities ranging from eighteen months to five years. The dependence on the banking industry may involve certain credit risks, such as defaults or downgrades, if at some future date adverse economic conditions prevail in such industry. Banks are subject to 5 extensive governmental regulations that may limit both the amounts and types of loans and other financial commitments that may be made and the interest rates and fees that may be charged. The profitability of this industry is largely dependent upon the availability and cost of capital funds for the purpose of financing lending operations under prevailing money market conditions. Also, general economic conditions play an important part in the operations of this industry and exposure to credit losses arising from possible financial difficulties of borrowers might affect a bank's ability to meet its obligations. Bank obligations may be general obligations of the parent bank or may be limited to the issuing branch by the terms of the specific obligations or by government regulation. Investors should also be aware that securities of foreign banks and foreign branches of United States banks may involve foreign investment risks in addition to those relating to domestic bank obligations. These investment risks may involve, among other considerations, risks relating to future political and economic developments, more limited liquidity of foreign obligations than comparable domestic obligations, the possible imposition of withholding taxes on interest income, the possible seizure or nationalization of foreign assets and the possible establishment of exchange controls or other restrictions. There may be less publicly available information concerning foreign issuers, there may be difficulties in obtaining or enforcing a judgment against a foreign issuer (including branches) and accounting, auditing and financial reporting standards and practices may differ from those applicable to U.S. issuers. In addition, foreign banks are not subject to regulations comparable to U.S. banking regulations. Changes in the credit quality of banks or other financial institutions backing a Fund's securities could cause losses to these Funds and affect their share price. Credit enhancements which are supplied by foreign or domestic banks are not subject to federal deposit insurance. COMMERCIAL PAPER AND OTHER SHORT-TERM OBLIGATIONS. The commercial paper and other short-term obligations of U.S. and foreign corporations which may be purchased by the JPMorgan Prime Money Market Fund other than those of bank holding companies, include obligations which are (i) rated Prime-1 by Moody's, A-1 by S&P, or F-1 by Fitch, or comparably rated by another NRO; or (ii) determined by the advisers to be of comparable quality to those rated obligations which may be purchased by the JPMorgan Prime Money Market Fund at the date of purchase or which at the date of purchase have an outstanding debt issue rated in the highest rating category by Moody's, S&P, Fitch or another NRO. The commercial paper and other short-term obligations of U.S. banks holding companies which may be purchased by the JPMorgan Prime Money Market Fund II include obligations issued or guaranteed by bank holding companies with total assets exceeding $1 billion. For purposes of the size standards with respect to banks and bank holding companies, "total deposits" and "total assets" are determined on an annual basis by reference to an institution's then most recent annual financial statements. REPURCHASE AGREEMENTS. Each Fund other than the JPMorgan Federal Money Market Fund may enter into agreements to purchase and resell securities at an agreed-upon price and time. A Fund will enter into repurchase agreements only with member banks of the Federal Reserve System and securities dealers believed creditworthy, and only if fully collateralized by securities in which such Fund is permitted to invest. Under the terms of a typical repurchase agreement, a Fund would acquire an underlying debt instrument for a relatively short period (usually not more than one week) subject to an obligation of the seller to repurchase the instrument and the Fund to resell the instrument at a fixed price and time, thereby determining the yield during the Fund's holding period. This procedure results in a fixed rate of return insulated from market fluctuations during such period. A repurchase agreement is subject to the risk that the seller may fail to repurchase the security. Repurchase agreements are considered under the 1940 Act to be loans collateralized by the underlying securities. All repurchase agreements entered into by a Fund will be fully collateralized at all times during the period of the agreement in that the value of the underlying security will be at least equal to 6 100% of the amount of the loan, including the accrued interest thereon, and the Fund or its custodian or sub-custodian will have possession of the collateral, which the Board of Trustees believes will give it a valid, perfected security interest in the collateral. Whether a repurchase agreement is the purchase and sale of a security or a collateralized loan has not been conclusively established. This might become an issue in the event of the bankruptcy of the other party to the transaction. In the event of default by the seller under a repurchase agreement construed to be a collateralized loan, the underlying securities would not be owned by a Fund, but would only constitute collateral for the seller's obligation to pay the repurchase price. Therefore, a Fund may suffer time delays and incur costs in connection with the disposition of the collateral. The Board of Trustees believes that the collateral underlying repurchase agreements may be more susceptible to claims of the seller's creditors than would be the case with securities owned by a Fund. Repurchase agreements will give rise to income which will not qualify as tax-exempt income when distributed by a Tax Free Fund. Repurchase agreements maturing in more than seven days are treated as illiquid for purposes of the Funds' restrictions on purchases of illiquid securities. Repurchase agreements are also subject to the risks described below with respect to stand-by commitments. BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow money from banks for temporary or short-term purposes, but will not borrow to buy additional securities, known as "leveraging." Reverse repurchase agreements involve sales of portfolio securities of a Fund to member banks of the Federal Reserve System or securities dealers believed creditworthy, concurrently with an agreement by such Fund to repurchase the same securities at a later date at a fixed price which is generally equal to the original sales price plus interest. A Fund retains record ownership and the right to receive interest and principal payments on the portfolio security involved. A Fund may use this practice to generate cash for shareholder redemptions without selling securities during unfavorable market conditions. Whenever a Fund enters into a reverse repurchase agreement, it will establish a segregated account in which it will maintain liquid assets on a daily basis in an amount at least equal to the repurchase price (including accrued interest.) A Fund would be required to pay interest on amounts obtained through reverse repurchase agreements, which are considered borrowings under federal securities laws. MUNICIPAL OBLIGATIONS. The JPMorgan Prime Money Market Fund may invest in Municipal Obligations. The JPMorgan Prime Money Market Fund may invest in high-quality, short-term municipal obligations that carry yields that are competitive with those of other types of money market instruments in which they may invest. Dividends paid by these Funds that are derived from interest on municipal obligations will be taxable to shareholders for federal income tax purposes. "Municipal Obligations" are obligations issued by or on behalf of states, territories and possessions of the United States, and their authorities, agencies, instrumentalities and political subdivisions, the interest on which, in the opinion of the bond counsel, is excluded from gross income for federal tax purposes (without regard to whether the interest thereon is exempt from the personal income taxes of any state or whether the interest thereon constitutes a preference item for purposes of the federal alternative minimum tax.) Municipal Obligations are issued to obtain funds for various public purposes, such as the construction of public facilities, the payment of general operating expenses or the refunding of outstanding debts. They may also be issued to finance various private activities, including the lending of funds to public or private institutions for the construction of housing, educational or medical facilities, and may include certain types of industrial development bonds, private activity bonds or notes issued by public authorities to finance privately owned or operated facilities, or to fund short-term cash requirements. Short-term Municipal Obligations may be issued as interim financing in anticipation of tax collections, revenue receipts or bond sales to finance 7 various public purposes. The Municipal Obligations in which the Fund invests may consist of municipal notes, municipal commercial paper and municipal bonds maturing or deemed to mature in 397 days or less. The two principal classifications of Municipal Obligations are general obligation and revenue obligation securities. General obligation securities involve a pledge of the credit of an issuer possessing taxing power and are payable from the issuer's general unrestricted revenues. Their payment may depend on an appropriation by the issuer's legislative body. The characteristics and methods of enforcement of general obligation securities vary according to the law applicable to the particular issuer. Revenue obligation securities are payable only from the revenues derived from a particular facility or class of facilities, or a specific revenue source, and generally are not payable from the unrestricted revenues of the issuer. Industrial development bonds and private activity bonds are in most cases revenue obligation securities, the credit quality of which is directly related to the private user of the facilities. The JPMorgan Tax Free Money Market Fund may also invest in industrial development bonds that are backed only by the assets and revenues of the non-governmental issuers such as hospitals or airports, provided, however, that the Funds may not invest more than 25% of the value of their total assets in such bonds if the issuers are in the same industry. Interest on certain Municipal Obligations (including certain industrial development bonds), while exempt from federal income tax, is a preference item for the purpose of the alternative minimum tax. Where a mutual fund receives such interest, a proportionate share of any exempt-interest dividend paid by the mutual fund may be treated as such a preference item to shareholders. Federal tax legislation enacted over the past few years has limited the types and volume of bonds which are not AMT Items and the interest on which is not subject to federal income tax. This legislation may affect the availability of Municipal Obligations for investment by the JPMorgan Tax Free Money Market Fund. Investments by the JPMorgan Tax Free Money Market Fund will be made in unrated Municipal Obligations only if they are determined to be of comparable quality to permissable rated investments on the basis of the advisers' credit evaluation of the obligor or of the bank issuing a participation certificate, letter of credit or guaranty, or insurance issued in support of the obligation. High Quality instruments may produce a lower yield than would be available from less highly rated instruments. The Board of Trustees has determined that Municipal Obligations which are backed by the credit of the U.S. Government will be considered to have a rating equivalent to Moody's Aaa. If, subsequent to purchase by the JPMorgan Tax Free Money Market Fund, (a) an issue of rated Municipal Obligations ceases to be rated in the highest short-term rating category by at least two rating organizations (or one rating organization if the instrument was rated by only one such organization) or the Board of Trustees determines that it is no longer of comparable quality or (b) a Money Market Fund's advisers become aware that any portfolio security not so highly rated or any unrated security has been given a rating by any rating organization below the rating organization's second highest rating category, the Board of Trustees will reassess promptly whether such security presents minimal credit risk and will cause such Money Market Fund to take such action as it determines is in its best interest and that of its shareholders; provided that the reassessment required by clause (b) is not required if the portfolio security is disposed of or matures within five business days of the advisers becoming aware of the new rating and the Fund's Board is subsequently notified of the adviser's actions. To the extent that a rating given by Moody's, S&P or Fitch for Municipal Obligations may change as a result of changes in such organizations or their rating systems, the Funds will attempt to use comparable ratings as standards for their investments in accordance with the investment policies contained in the Prospectuses and this Statement of Additional Information. The ratings of Moody's, S&P and Fitch represent their opinions as to the quality of the Municipal Obligations which they undertake to rate. It should be emphasized, however, that ratings are relative and subjective and are not absolute standards of quality. Although 8 these ratings may be an initial criterion for selection of portfolio investments, the advisers also will evaluate these securities and the creditworthiness of the issuers of such securities. MUNICIPAL LEASE OBLIGATIONS. The Tax Free Funds may invest in municipal lease obligations. These typically provide a premium interest rate. Municipal lease obligations do not constitute general obligations of the municipality. Certain municipal lease obligations in which the Tax Free Funds may invest contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment payments in future years unless money is later appropriated for such purpose. The Funds will limit their investments in non-appropriation leases to 10% of its assets. Although "non-appropriation" lease obligations are secured by the leased property, disposition of the property in the event of foreclosure might prove difficult. Certain investments in municipal lease obligations may be illiquid. FORWARD COMMITMENTS. Each Fund may purchase securities for delivery at a future date, which may increase its overall investment exposure and involves a risk of loss if the value of the securities declines prior to the settlement date. In order to invest a Fund's assets immediately, while awaiting delivery of securities purchased on a forward commitment basis, short-term obligations that offer same-day settlement and earnings will normally be purchased. Although, with respect to the JPMorgan Tax Free Money Market Fund, short-term investments will normally be in tax-exempt securities or Municipal Obligations, short-term taxable securities or obligations may be purchased if suitable short-term tax-exempt securities or Municipal Obligations are not available. When a commitment to purchase a security on a forward commitment basis is made, procedures are established consistent with the General Statement of Policy of the Securities and Exchange Commission concerning such purchases. Since that policy currently recommends that an amount of the respective Fund's assets equal to the amount of the purchase be held aside or segregated to be used to pay for the commitment, a separate account of such Fund consisting of cash, cash equivalents or high quality debt securities equal to the amount of such Fund's commitments will be established at such Fund's custodian bank. For the purpose of determining the adequacy of the securities in the account, the deposited securities will be valued at market value. If the market value of such securities declines, additional cash, cash equivalents or highly liquid securities will be placed in the account daily so that the value of the account will equal the amount of such commitments by the respective Fund. Although it is not intended that such purchases would be made for speculative purposes, purchases of securities on a forward commitment basis may involve more risk than other types of purchases. Securities purchased on a forward commitment basis and the securities held in the respective Fund's portfolio are subject to changes in value based upon the public's perception of the creditworthiness of the issuer and changes, real or anticipated, in the level of interest rates. Purchasing securities on a forward commitment basis can involve the risk that the yields available in the market when the delivery takes place may actually be higher or lower than those obtained in the transaction itself. On the settlement date of the forward commitment transaction, the respective Fund will meet its obligations from then available cash flow, sale of securities held in the separate account, sale of other securities or, although it would not normally expect to do so, from sale of the forward commitment securities themselves (which may have a value greater or lesser than such Fund's payment obligations). The sale of securities to meet such obligations may result in the realization of capital gains or losses, which, for consideration by investors in the Tax Free Funds, are not exempt from federal, state or local taxation. Forward commitments involve some risk to a Fund if the other party should default on its obligation and the Fund is delayed or prevented from recovering the collateral in completing the transaction. To the extent a Fund engages in forward commitment transactions, it will do so for the purpose of acquiring securities consistent with its investment objective and policies and not for the purpose of investment leverage, and settlement of such transactions will be within 90 days from the trade date. ILLIQUID SECURITIES. For purposes of its limitation on investments in illiquid securities, each Fund may elect to treat as liquid, in accordance with procedures established by the Board of Trustees, certain invest- 9 ments in restricted securities for which there may be a secondary market of qualified institutional buyers as contemplated by Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and commercial obligations issued in reliance on the so-called "private placement" exemption from registration afforded by Section 4(2) of the Securities Act ("Section 4(2) paper"). Rule 144A provides an exemption from the registration requirements of the Securities Act for the resale of certain restricted securities to qualified institutional buyers. Section 4(2) paper is restricted as to disposition under the federal securities laws, and generally is sold to institutional investors such as a Fund who agree that they are purchasing the paper for investment and not with a view to public distribution. Any resale of Section 4(2) paper by the purchaser must be in an exempt transaction. One effect of Rule 144A and Section 4(2) is that certain restricted securities may now be liquid, though there is no assurance that a liquid market for Rule 144A securities or Section 4(2) paper will develop or be maintained. The Trustees have adopted policies and procedures for the purpose of determining whether securities that are eligible for resale under Rule 144A and Section 4(2) paper are liquid or illiquid for purposes of the limitation on investment in illiquid securities. Pursuant to those policies and procedures, the Trustees have delegated to the advisers the determination as to whether a particular instrument is liquid or illiquid, requiring that consideration be given to, among other things, the frequency of trades and quotes for the security, the number of dealers willing to sell the security and the number of potential purchasers, dealer undertakings to make a market in the security, the nature of the security and the time needed to dispose of the security. The Trustees will periodically review the Funds' purchases and sales of Rule 144A securities and Section 4(2) paper. STAND-BY COMMITMENTS. When a Fund purchases securities it may also enter into put transactions, including those referred to as stand-by commitments, with respect to such securities. Under a stand-by commitment, a bank, broker-dealer or other financial institution agrees to purchase at a Fund's option a specified security at a specified price within a specified period prior to its maturity date. A put transaction will increase the cost of the underlying security and consequently reduce the available yield. The amount payable to a Money Market Fund upon its exercise of a stand-by commitment with respect to a Municipal Obligation normally would be (i) the acquisition cost of the Municipal Obligation (excluding any accrued interest paid by the Fund on the acquisition), less any amortized market premium or plus any amortized market or original issue discount during the period the Fund owned the security, plus (ii) all interest accrued on the security since the last interest payment date during the period the security was owned by the Fund. Absent unusual circumstances relating to a change in market value, a Money Market Fund would value the underlying Municipal Obligation at amortized cost. Accordingly, the amount payable by a bank or dealer during the time a stand-by commitment is exercisable would be substantially the same as the market value of the underlying Municipal Obligation. The Money Market Funds value stand-by commitments at zero for purposes of computing their net asset value per share. The stand-by commitments that may be entered into by the Funds are subject to certain risks, which include the ability of the issuer of the commitment to pay for the securities at the time the commitment is exercised, the fact that the commitment is not marketable by a Fund, and that the maturity of the underlying security will generally be different from that of the commitment. Not more than 10% of the total assets of a Money Market Fund will be invested in Municipal Obligations that are subject to stand-by commitments from the same bank or broker-dealer. FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. Each Fund other than the JPMorgan Treasury Plus Money Market Fund may invest in floating and variable rate securities. Floating and variable rate demand instruments permit the holder to demand payment upon a specified number of days' notice of the unpaid principal balance plus accrued interest either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. 10 The floating or variable rate demand instruments in which the Money Market Funds may invest are payable on demand on not more than seven calendar days' notice. The terms of these types of securities provide that interest rates are adjustable at intervals ranging from daily to up to six months and the adjustments are based upon the prime rate of a bank or other short-term rates, such as Treasury Bills or LIBOR (London Interbank Offered Rate), as provided in the respective instruments. The Funds will decide which floating or variable rate securities to purchase in accordance with procedures prescribed by Board of Trustees of the Trust in order to minimize credit risks. In the case of a Money Market Fund, the Board of Trustees may determine that an unrated floating or variable rate security meets the Fund's high quality criteria if it is backed by a letter of credit or guarantee or is insured by an insurer that meets such quality criteria, or on the basis of a credit evaluation of the underlying obligor. If the credit of the obligor is of "high quality", no credit support from a bank or other financial institution will be necessary. The Board of Trustees will re-evaluate each unrated floating or variable rate security on a quarterly basis to determine that it continues to meet a Money Market Fund's high quality criteria. If an instrument is ever deemed to fall below a Money Market Fund's high quality standards, either it will be sold in the market or the demand feature will be exercised. The securities in which the Tax Free Funds and the JPMorgan Prime Money Market Fund may invest include participation certificates, issued by a bank, insurance company or other financial institution, in securities owned by such institutions or affiliated organizations ("Participation Certificates"), and, in the case of the JPMorgan Prime Money Market Fund, certificates of indebtedness or safekeeping. Participation Certificates are pro rata interests in securities held by others; certificates of indebtedness or safekeeping are documentary receipts for such original securities held in custody by others. A Participation Certificate gives a Fund an undivided interest in the security in the proportion that the Fund's participation interest bears to the total principal amount of the security and generally provides the demand feature described below. Each Participation Certificate is backed by an irrevocable letter of credit or guaranty of a bank (which may be the bank issuing the Participation Certificate, a bank issuing a confirming letter of credit to that of the issuing bank, or a bank serving as agent of the issuing bank with respect to the possible repurchase of the certificate of participation) or insurance policy of an insurance company that the Board of Trustees of the Trust has determined meets the prescribed quality standards for a particular Fund. A Fund may have the right to sell the Participation Certificate back to the institution and draw on the letter of credit or insurance on demand after the prescribed notice period, for all or any part of the full principal amount of the Fund's participation interest in the security, plus accrued interest. The institutions issuing the Participation Certificates would retain a service and letter of credit fee and a fee for providing the demand feature, in an amount equal to the excess of the interest paid on the instruments over the negotiated yield at which the Participation Certificates were purchased by a Fund. The total fees would generally range from 5% to 15% of the applicable prime rate or other short-term rate index. With respect to insurance, a Fund will attempt to have the issuer of the Participation Certificate bear the cost of any such insurance, although the Funds retain the option to purchase insurance if deemed appropriate. Obligations that have a demand feature permitting a Fund to tender the obligation to a foreign bank may involve certain risks associated with foreign investment. A Fund's ability to receive payment in such circumstances under the demand feature from such foreign banks may involve certain risks such as future political and economic developments, the possible establishments of laws or restrictions that might adversely affect the payment of the bank's obligations under the demand feature and the difficulty of obtaining or enforcing a judgment against the bank. 11 The advisers have been instructed by the Board of Trustees to monitor on an ongoing basis the pricing, quality and liquidity of the floating and variable rate securities held by the Funds, including Participation Certificates, on the basis of published financial information and reports of the rating agencies and other bank analytical services to which the Funds may subscribe. Although these instruments may be sold by a Fund, it is intended that they be held until maturity. The Internal Revenue Service has not ruled on whether interest on participations in floating or variable rate Municipal Obligations is tax exempt. Participation Certificates will only be purchased by the JPMorgan Tax Free Money Market Fund if, in the opinion of counsel to the issuer, interest income on such instruments will be tax-exempt when distributed as dividends to shareholders of such Fund. Past periods of high inflation, together with the fiscal measures adopted to attempt to deal with it, have seen wide fluctuations in interest rates, particularly "prime rates" charged by banks. While the value of the underlying floating or variable rate securities may change with changes in interest rates generally, the floating or variable rate nature of the underlying floating or variable rate securities should minimize changes in value of the instruments. Accordingly, as interest rates decrease or increase, the potential for capital appreciation and the risk of potential capital depreciation is less than would be the case with a portfolio of fixed rate securities. A Fund's portfolio may contain floating or variable rate securities on which stated minimum or maximum rates, or maximum rates set by state law, limit the degree to which interest on such floating or variable rate securities may fluctuate; to the extent it does, increases or decreases in value may be somewhat greater than would be the case without such limits. Because the adjustment of interest rates on the floating or variable rate securities is made in relation to movements of the applicable banks' "prime rates" or other short-term rate adjustment indices, the floating or variable rate securities are not comparable to long-term fixed rate securities. Accordingly, interest rates on the floating or variable rate securities may be higher or lower than current market rates for fixed rate obligations of comparable quality with similar maturities. The maturity of variable rate securities is deemed to be the longer of (i) the notice period required before a Fund is entitled to receive payment of the principal amount of the security upon demand or (ii) the period remaining until the security's next interest rate adjustment. With respect to a Money Market Fund, the maturity of a variable rate demand instrument will be determined in the same manner for purposes of computing the Fund's dollar-weighted average portfolio maturity. With respect to the Income Funds, if variable rate securities are not redeemed through the demand feature, they mature on a specified date which may range up to thirty years from the date of issuance. TENDER OPTION FLOATING OR VARIABLE RATE CERTIFICATES. The Money Market Funds may invest in tender option bonds. A tender option bond is a synthetic floating or variable rate security issued when long term bonds are purchased in the secondary market and are then deposited into a trust. Custodial receipts are then issued to investors, such as the Funds, evidencing ownership interests in the trust. The trust sets a floating or variable rate on a daily or weekly basis which is established through a remarketing agent. These types of instruments, to be money market eligible under Rule 2a-7, must have a liquidity facility in place which provides additional comfort to the investors in case the remarketing fails. The sponsor of the trust keeps the difference between the rate on the long term bond and the rate on the short term floating or variable rate security. SECURITIES OF FOREIGN GOVERNMENTS AND SUPRANATIONAL AGENCIES. The Prime Money Market Fund may invest a portion of its assets from time to time in securities of foreign governments and supranational agencies. The Funds will limit their investments in foreign government obligations to commercial paper and other short-term notes issued or guaranteed by the governments of Western Europe, Australia, New Zealand, Japan and Canada. Supranational agencies include organizations such as The World Bank, which was chartered to finance development projects in developing member countries; the European Community, which is a twelve-nation organization engaged in cooperative economic activities; and the Asian Development Bank, which is an international development bank established to lend funds, promote investment and 12 provide technical assistance to member nations of the Asian and Pacific regions. Obligations of supranational agencies are supported by subscribed, but unpaid, commitments of member countries. There is no assurance that these commitments will be undertaken or complied with in the future, and foreign and supranational securities are subject to certain risks associated with foreign investing. SECURITIES LOANS. Each Fund other than JPMorgan Tax Free Money Market Fund is permitted to lend its securities to broker-dealers and other institutional investors in order to generate additional income. Such loans of portfolio securities may not exceed 30% of the value of a Fund's total assets. In connection with such loans, a Fund will receive collateral consisting of cash, cash equivalents, U.S. Government securities or irrevocable letters of credit issued by financial institutions. Such collateral will be maintained at all times in an amount equal to at least 100% of the current market value plus accrued interest of the securities loaned. A Fund can increase its income through the investment of such collateral. A Fund continues to be entitled to the interest payable or any dividend-equivalent payments received on a loaned security and, in addition, to receive interest on the amount of the loan. However, the receipt of any dividend-equivalent payments by a Fund on a loaned security from the borrower will not qualify for the dividends-received deduction. Such loans will be terminable at any time upon specified notice. A Fund might experience risk of loss if the institutions with which it has engaged in portfolio loan transactions breach their agreements with such Fund. The risks in lending portfolio securities, as with other extensions of secured credit, consist of possible delays in receiving additional collateral or in the recovery of the securities or the possible loss of rights in the collateral should the borrower experience financial difficulty. Loans will be made only to firms deemed by the advisers to be of good standing and will not be made unless, in the judgment of the advisers, the consideration to be earned from such loans justifies the risk. ZERO COUPON AND STRIPPED OBLIGATIONS. Each Fund may invest up to 20% of its total assets in such stripped obligations. The principal and interest components of United States Treasury bonds with remaining maturities of longer than ten years are eligible to be traded independently under the Separate Trading of Registered Interest and Principal of Securities ("STRIPS") program. Under the STRIPS program, the principal and interest components are separately issued by the United States Treasury at the request of depository financial institutions, which then trade the component parts separately. The interest component of STRIPS may be more volatile than that of United States Treasury bills with comparable maturities. JPMorgan Prime Money Market Fund and JPMorgan Tax Free Money Market Fund may also invest in zero coupon obligations. Zero coupon obligations are sold at a substantial discount from their value at maturity and, when held to maturity, their entire return, which consists of the amortization of discount, comes from the difference between their purchase price and maturity value. Because interest on a zero coupon obligation is not distributed on a current basis, the obligation tends to be subject to greater price fluctuations in response to changes in interest rates than are ordinary interest-paying securities with similar maturities. As with STRIPS, the risk is greater when the period to maturity is longer. The value of zero coupon obligations appreciates more than such ordinary interest-paying securities during periods of declining interest rates and depreciates more than such ordinary interest-paying securities during periods of rising interest rates. Under the stripped bond rules of the Internal Revenue Code of 1986, as amended, investments in zero coupon obligations will result in the accrual of interest income on such investments in advance of the receipt of the cash corresponding to such income. Zero coupon securities may be created when a dealer deposits a U.S. Treasury or federal agency security with a custodian and then sells the coupon payments and principal payment that will be generated by this security separately. Proprietary receipts, such as Certificates of Accrual on Treasury Securities, Treasury Investment Growth Receipts and generic Treasury Receipts, are examples of stripped U.S. Treasury securities separated into their component parts through such custodial arrangements. 13 CUSTODIAL RECEIPTS. The JPMorgan Prime Money Market Fund may acquire securities in the form of custodial receipts that evidence ownership of future interest payments, principal payments or both on certain U.S. Treasury notes or bonds in connection with programs sponsored by banks and brokerage firms. These are not deemed U.S. Government securities. These notes and bonds are held in custody by a bank on behalf of the owners of the receipts. FUNDING AGREEMENTS. Each Fund may invest in short-term funding agreements. A funding agreement is a contract between an issuer and a purchaser that obligates the issuer to pay a guaranteed rate of interest on a principal sum deposited by a purchaser. Funding agreements generally will also guarantee the return of principal and may guarantee a stream of payments over time. A funding agreement has a fixed maturity date and may have either a fixed or variable interest rate that is based on an index and guaranteed for a set time period. Because there generally is no active secondary market for these investments, a funding agreement may be deemed to be illiquid. TEMPORARY DEFENSIVE POSITIONS. For temporary defensive purposes, each Tax Free Fund may invest without limitation in high quality money market instruments and repurchase agreements, the interest income from which may be taxable to shareholders as ordinary income for federal income tax purposes. OTHER INVESTMENT COMPANIES. In lieu of investing directly, each Fund is authorized to seek to achieve its objectives by investing all of its investable assets in an investment company having substantially the same investment objective and policies as the applicable Fund. Each Money Market Fund may invest up to 10% of its total assets in shares of other money market funds when consistent with its investment objective and policies, subject to applicable regulatory limitations. ADDITIONAL POLICIES REGARDING DERIVATIVE AND RELATED TRANSACTIONS INTRODUCTION. As explained more fully below, the Funds may employ derivative and related instruments as tools in the management of portfolio assets. Put briefly, a "derivative" instrument may be considered a security or other instrument which derives its value from the value or performance of other instruments or assets, interest or currency exchange rates, or indexes. For instance, derivatives include futures, options, forward contracts, structured notes and various other over-the-counter instruments. Like other investment tools or techniques, the impact of using derivatives strategies or similar instruments depends to a great extent on how they are used. Derivatives are generally used by portfolio managers in three ways: First, to reduce risk by hedging (offsetting) an investment position. Second, to substitute for another security particularly where it is quicker, easier and less expensive to invest in derivatives. Lastly, to speculate or enhance portfolio performance. When used prudently, derivatives can offer several benefits, including easier and more effective hedging, lower transaction costs, quicker investment and more profitable use of portfolio assets. However, derivatives also have the potential to significantly magnify risks, thereby leading to potentially greater losses for a Fund. Each Fund may invest its assets in derivative and related instruments subject only to the Fund's investment objective and policies and the requirement that the Fund maintain segregated accounts consisting of liquid assets, such as cash, U.S. Government securities, or other high-grade debt obligations (or, as permitted by applicable regulation, enter into certain offsetting positions) to cover its obligations under such instruments with respect to positions where there is no underlying portfolio asset so as to avoid leveraging the Fund. 14 The value of some derivative or similar instruments in which the Funds invest may be particularly sensitive to changes in prevailing interest rates or other economic factors, and like other investments of the Funds the ability of a Fund to successfully utilize these instruments may depend in part upon the ability of the advisers to forecast interest rates and other economic factors correctly. If the advisers accurately forecast such factors and has taken positions in derivative or similar instruments contrary to prevailing market trends, the Funds could be exposed to the risk of a loss. The Funds might not employ any or all of the strategies described herein, and no assurance can be given that any strategy used will succeed. Set forth below is an explanation of the various derivatives strategies and related instruments the Funds may employ along with risks or special attributes associated with them. This discussion is intended to supplement the Funds' current prospectuses as well as provide useful information to prospective investors. RISK FACTORS. As explained more fully below and in the discussions of particular strategies or instruments, there are a number of risks associated with the use of derivatives and related instruments. There can be no guarantee that there will be a correlation between price movements in a hedging vehicle and in the portfolio assets being hedged. An incorrect correlation could result in a loss on both the hedged assets in a Fund and the hedging vehicle so that the portfolio return might have been greater had hedging not been attempted. The advisers may accurately forecast interest rates, market values or other economic factors in utilizing a derivatives strategy. In such a case, the Fund may have been in a better position had it not entered into such strategy. Hedging strategies, while reducing risk of loss, can also reduce the opportunity for gain. In other words, hedging usually limits both potential losses as well as potential gains. Strategies not involving hedging may increase the risk to a Fund. Certain strategies, such as yield enhancement, can have speculative characteristics, involve leverage and may result in losses that exceed the original investment of the fund. There can be no assurance that a liquid market will exist at a time when a Fund seeks to close out an option, futures contract or other derivative or related position. Many exchanges and boards of trade limit the amount of fluctuation permitted in option or futures contract prices during a single day; once the daily limit has been reached on particular contract, no trades may be made that day at a price beyond that limit. In addition, certain instruments are relatively new and without a significant trading history. As a result, there is no assurance that an active secondary market will develop or continue to exist. Finally, over-the-counter instruments typically do not have a liquid market. Lack of a liquid market for any reason may prevent a Fund from liquidating an unfavorable position. Activities of large traders in the futures and securities markets involving arbitrage, "program trading," and other investment strategies may cause price distortions in these markets. In certain instances, particularly those involving over-the-counter transactions on forward contracts, there is a greater potential that a counterparty or broker may default or be unable to perform on its commitments. In the event of such a default, a Fund may experience a loss. SPECIFIC USES AND STRATEGIES. Set forth below are explanations various strategies involving derivatives and related instruments which may be used by the Funds. OPTIONS ON SECURITIES AND SECURITIES INDEXES. The Funds may PURCHASE, SELL or EXERCISE call and put options on (i) securities, (ii) securities indexes, and (iii) debt instruments. Although in most cases these options will be exchange-traded, the Funds may also purchase, sell or exercise over-the-counter options. Over-the-counter options differ from exchange-traded options in that they are two-party contracts with price and other terms negotiated between buyer and seller. As such, over-the-counter options generally have much less market liquidity and carry the risk of default or nonperformance by the other party. One purpose of purchasing put options is to protect holdings in an underlying or related security against a substantial decline in market value. One purpose of purchasing call options is to protect against substantial increases in prices of securities a Fund intends to purchase pending its ability to invest in such securities in an orderly manner. A Fund may also use combinations of options to minimize costs, gain expo- 15 sure to markets or take advantage of price disparities or market movements. For example, a Fund may sell put or call options it has previously purchased or purchase put or call options it has previously sold. These transactions may result in a net gain or loss depending on whether the amount realized on the sale is more or less than the premium and other transaction costs paid on the put or call option which is sold. A Fund may write a call or put option in order to earn the related premium from such transactions. Prior to exercise or expiration, an option may be closed out by an offsetting purchase or sale of a similar option. In addition to the general risk factors noted above, the purchase and writing of options involve certain special risks. During the option period, a fund writing a covered call (i.e., where the underlying securities are held by the fund) has, in return for the premium on the option, given up the opportunity to profit from a price increase in the underlying securities above the exercise price, but has retained the risk of loss should the price of the underlying securities decline. The writer of an option has no control over the time when it may be required to fulfill its obligation as a writer of the option. Once an option writer has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate its obligation under the option and must deliver the underlying securities at the exercise price. The Funds will not write uncovered options. If a put or call option purchased by a Fund is not sold when it has remaining value, and if the market price of the underlying security, in the case of a put, remains equal to or greater than the exercise price or, in the case of a call, remains less than or equal to the exercise price, such Fund will lose its entire investment in the option. Also, where a put or call option on a particular security is purchased to hedge against price movements in a related security, the price of the put or call option may move more or less than the price of the related security. There can be no assurance that a liquid market will exist when a Fund seeks to close out an option position. Furthermore, if trading restrictions or suspensions are imposed on the options markets, a Fund may be unable to close out a position. FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may purchase or sell (i) interest-rate futures contracts, (ii) futures contracts on specified instruments or indices, and (iii) options on these futures contracts ("futures options"). The futures contracts and futures options may be based on various instruments or indices in which the Funds may invest such as foreign currencies, certificates of deposit, Eurodollar time deposits, securities indices, economic indices (such as the Consumer Price Indices compiled by the U.S. Department of Labor). Futures contracts and futures options may be used to hedge portfolio positions and transactions as well as to gain exposure to markets. For example, a Fund may sell a futures contract or buy a futures option to protect against a decline in value, or reduce the duration, of portfolio holdings. Likewise, these instruments may be used where a Fund intends to acquire an instrument or enter into a position. For example, a Fund may purchase a futures contract or buy a futures option to gain immediate exposure in a market or otherwise offset increases in the purchase price of securities or currencies to be acquired in the future. Futures options may also be written to earn the related premiums. When writing or purchasing options, the Funds may simultaneously enter into other transactions involving futures contracts or futures options in order to minimize costs, gain exposure to markets, or take advantage of price disparities or market movements. Such strategies may entail additional risks in certain instances. Funds may engage in cross-hedging by purchasing or selling futures or options on a security different from the security position being hedged to take advantage of relationships between the two securities. Investments in futures contracts and options thereon involve risks similar to those associated with options transactions discussed above. The Funds will only enter into futures contracts or options on futures contracts which are traded on a U.S. or foreign exchange or board of trade, or similar entity, or quoted on an automated quotation system. 16 FORWARD CONTRACTS. A Fund may also use forward contracts to hedge against changes in interest-rates, increase exposure to a market or otherwise take advantage of such changes. An interest-rate forward contract involves the obligation to purchase or sell a specific debt instrument at a fixed price at a future date. INTEREST RATE TRANSACTIONS. The Funds may employ interest rate management techniques, including transactions in options (including yield curve options), futures, options on futures, forward exchange contracts, and interest rate swaps. A Fund will only enter into interest rate swaps on a net basis, i.e., the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the net amount of the two payments. Interest rate swaps do not involve the delivery of securities, other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that a Fund is contractually obligated to make. If the other party to and interest rate swap defaults, a Fund's risk of loss consists of the net amount of interest payments that the Fund is contractually entitled to receive. Since interest rate swaps are individually negotiated, each Fund expects to achieve an acceptable degree of correlation between its portfolio investments and its interest rate swap position. A Fund may enter into interest rate swaps to the maximum allowed limits under applicable law. A Fund will typically use interest rate swaps to shorten the effective duration of its portfolio. Interest rate swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest, such as an exchange of fixed rate payments for floating rate payments. ASSET-BACKED SECURITIES. The JPMorgan Prime Money Market Fund may also invest in asset-backed securities. Asset-backed securities represent a participation in, or are secured by and payable from, a stream of payments generated by particular assets, most often a pool of assets similar to one another, such as motor vehicle receivables or credit card receivables. STRUCTURED PRODUCTS. The Funds may invest in interests in entities organized and operated solely for the purpose of restructuring the investment characteristics of certain debt obligations. This type of restructuring involves the deposit with or purchase by an entity, such as a corporation or trust, or specified instruments (such as commercial bank loans) and the issuance by that entity of one or more classes of securities ("structured products") backed by, or representing interests in, the underlying instruments. The cash flow on the underlying instruments may be apportioned among the newly issued structured products to create securities with different investment characteristics such as varying maturities, payment priorities and interest rate provisions, and the extent of the payments made with respect to structured products is dependent on the extent of the cash flow on the underlying instruments. A Fund may invest in structured products which represent derived investment positions based on relationships among different markets or asset classes. The Funds may also invest in other types of structured products, including, among others, inverse floaters, spread trades and notes linked by a formula to the price of an underlying instrument. Inverse floaters have coupon rates that vary inversely at a multiple of a designated floating rate (which typically is determined by reference to an index rate, but may also be determined through a dutch auction or a remarketing agent or by reference to another security) (the "reference rate"). As an example, inverse floaters may constitute a class of CMOs with a coupon rate that moves inversely to a designated index, such as LIBOR (London Interbank Offered Rate) or the cost of Funds Index. Any rise in the reference rate of an inverse floater (as a consequence of an increase in interest rates) causes a drop in the coupon rate while any drop in the reference rate of an inverse floater causes an increase in the coupon rate. A spread trade is an investment position relating to a difference in the prices or interest rates of two securities where the value of the investment position is determined by movements in the difference between the prices or interest rates, as the case may be, of the respective securities. When a Fund invests in notes linked to the price of an underlying instrument, the price of the underlying security is determined by a multiple (based 17 on a formula) of the price of such underlying security. A structured product may be considered to be leveraged to the extent its interest rate varies by a magnitude that exceeds the magnitude of the change in the index rate of interest. Because they are linked to their underlying markets or securities, investments in structured products generally are subject to greater volatility than an investment directly in the underlying market or security. Total return on the structured product is derived by linking return to one or more characteristics of the underlying instrument. Because certain structured products of the type in which the Fund anticipates it will invest may involve no credit enhancement, the credit risk of those structured products generally would be equivalent to that of the underlying instruments. A Fund is permitted to invest in a class of structured products that is either subordinated or unsubordinated to the right of payment of another class. Subordinated structured products typically have higher yields and present greater risks than unsubordinated structured products. Although a Fund's purchase of subordinated structured products would have similar economic effect to that of borrowing against the underlying securities, the purchase will not be deemed to be leverage for purposes of a Fund's fundamental investment limitation related to borrowing and leverage. Certain issuers of structured products may be deemed to be "investment companies" as defined in the 1940 Act. As a result, a Fund's investments in these structured products may be limited by the restrictions contained in the 1940 Act. Structured products are typically sold in private placement transactions, and there currently is no active trading market for structured products. As a result, certain structured products in which the Funds invest may be deemed illiquid and subject to their limitation on illiquid investments. Investments in structured products generally are subject to greater volatility than an investment directly in the underlying market or security. In addition, because structured products are typically sold in private placement transactions, there currently is no active trading market for structured products. ADDITIONAL RESTRICTIONS ON THE USE OF FUTURES AND OPTION CONTRACTS. None of the Funds is a "commodity pool" (i.e., a pooled investment vehicle which trades in commodity futures contracts and options thereon and the operator of which is registered with the CFTC and futures contracts and futures options will be purchased, sold or entered into only for bona fide hedging purposes, provided that a Fund may enter into such transactions for purposes other than bona fide hedging if, immediately thereafter, the sum of the amount of its initial margin and premiums on open contracts and options would not exceed 5% of the liquidation value of the Fund's portfolio, provided, further, that, in the case of an option that is in-the-money, the in-the-money amount may be excluded in calculating the 5% limitation. When a Fund purchases a futures contract, an amount of cash or cash equivalents or high quality debt securities will be deposited in a segregated account with such Fund's custodian so that the amount so segregated, plus the initial deposit and variation margin held in the account of its broker, will at all times equal the value of the futures contract, thereby insuring that the use of such futures is unleveraged. The Funds' ability to engage in the transactions described herein may be limited by the current federal income tax requirement that a Fund derive less than 30% of its gross income from the sale or other disposition of securities held for less than three months. In addition to the foregoing requirements, the Board of Trustees has adopted an additional restriction on the use of futures contracts and options thereon, requiring that the aggregate market value of the futures contracts held by a Fund not exceed 50% of the market value of its total assets. Neither this restriction nor any policy with respect to the above-referenced restrictions, would be changed by the Board of Trustees without considering the policies and concerns of the various federal and state regulatory agencies. 18 INVESTMENT RESTRICTIONS The Funds have adopted the following investment restrictions which may not be changed without approval by a "majority of the outstanding shares" of a Fund which, as used in this Statement of Additional Information, means the vote of the lesser of (i) 67% or more of the shares of a Fund present at a meeting, if the holders of more than 50% of the outstanding shares of a Fund are present or represented by proxy, or (ii) more than 50% of the outstanding shares of a Fund. Each Fund: (1) May make loans to other persons, in accordance with the Fund's investment objective and policies and to the extent permitted by applicable law. (2) May not make loans, except that each Fund may: (i) purchase and hold debt instruments (including without limitation, bonds, notes, debentures or other obligations and certificates of deposit, bankers' acceptances and fixed time deposits) in accordance with its investment objectives and policies; (ii) enter into repurchase agreements with respect to portfolio securities; and (iii) lend portfolio securities with a value not in excess of one-third of the value of its total assets; (3) May not purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, or repurchase agreements secured thereby) if, as a result, more than 25% of the Fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry. Notwithstanding the foregoing, (i) with respect to a Fund's permissible futures and options transactions in U.S. Government securities, positions in options and futures shall not be subject to this restriction; (ii) the Money Market Funds may invest more than 25% of their total assets in obligations issued by banks, including U. S. banks; JPMorgan Tax Free Money Market Fund may invest more than 25% of its respective assets in municipal obligations secured by bank letters of credit or guarantees, including participation certificates; (4) May not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments but this shall not prevent a Fund from (i) purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities or (ii) engaging in forward purchases or sales of foreign currencies or securities; (5) May not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent a Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business). Investments by a Fund in securities backed by mortgages on real estate or in marketable securities of companies engaged in such activities are not hereby precluded; (6) May not issue any senior security (as defined in the 1940 Act), except that (a) a Fund may engage in transactions that may result in the issuance of senior securities to the extent permitted under applicable regulations and interpretations of the 1940 Act or an exemptive order; (b) a Fund may acquire other securities, the acquisition of which may result in the issuance of a senior security, to the extent permitted under applicable regulations or interpretations of the 1940 Act; and (c) subject to the restrictions set forth above, a Fund may borrow money as authorized by the 1940 Act. For purposes 19 of this restriction, collateral arrangements with respect to a Fund's permissible options and futures transactions, including deposits of initial and variation margin, are not considered to be the issuance of a senior security; or (7) underwrite securities issued by other persons except insofar as a Fund may technically be deemed to be an underwriter under the Securities Act of 1933 in selling a portfolio security. In addition, as a matter of fundamental policy, notwithstanding any other investment policy or restriction, a Fund may seek to achieve its investment objective by investing all of its investable assets in another investment company having substantially the same investment objective and policies as the Fund. For purposes of investment restriction (5) above, real estate includes Real Estate Limited Partnerships. For purposes of investment restriction (3) above, industrial development bonds, where the payment of principal and interest is the ultimate responsibility of companies within the same industry, are grouped together as an "industry." Investment restriction (3) above, however, is not applicable to investments by a Fund in municipal obligations where the issuer is regarded as a state, city, municipality or other public authority since such entities are not members of any "industry." Supranational organizations are collectively considered to be members of a single "industry" for purposes of restriction (3) above. In addition, each Fund is subject to the following nonfundamental investment restrictions which may be changed without shareholder approval: (1) Each Fund other than the JPMorgan Tax Free Money Market Fund may not, with respect to 75% of its assets, hold more than 10% of the outstanding voting securities of any issuer or invest more than 5% of its assets in the securities of any one issuer (other than obligations of the U.S. Government, its agencies and instrumentalities); each Tax Free Fund may not, with respect to 50% of its assets, hold more than 10% of the outstanding voting securities of any issuer. (2) Each Fund may not make short sales of securities, other than short sales "against the box," or purchase securities on margin except for short-term credits necessary for clearance of portfolio transactions, provided that this restriction will not be applied to limit the use of options, futures contracts and related options, in the manner otherwise permitted by the investment restrictions, policies and investment program of a Fund. The Funds have no current intention of making short sales against the box. (3) Each Fund may not purchase or sell interests in oil, gas or mineral leases. (4) Each Money Market Fund may not invest more than 10% of its net assets in illiquid securities. (5) Each Fund may not write, purchase or sell any put or call option or any combination thereof, provided that this shall not prevent (i) the writing, purchasing or selling of puts, calls or combinations thereof with respect to portfolio securities or (ii) with respect to a Fund's permissible futures and options transactions, the writing, purchasing, ownership, holding or selling of futures and options positions or of puts, calls or combinations thereof with respect to futures. (6) Each Fund may invest up to 5% of its total assets in the securities of any one investment company, but may not own more than 3% of the securities of any one investment company or invest more than 10% of its total assets in the securities of other investment companies. 20 For purposes of investment restriction (4) above, illiquid securities includes securities restricted as to resale unless they are determined to be readily marketable in accordance with procedures established by the Board of Trustees. The investment objective of each Fund is nonfundamental. For purposes of the Funds' investment restrictions, the issuer of a tax-exempt security is deemed to be the entity (public or private) ultimately responsible for the payment of the principal of and interest on the security. As a nonfundamental operating policy, the Money Market Funds will not invest more than 25% of their respective total assets in obligations issued by foreign banks (other than foreign branches of U.S. banks). As a nonfundamental operating policy, the JPMorgan Tax Free Money Market Fund will not invest in obligations secured by letters of credit or guarantees from foreign banks (other than foreign branches of U.S. banks) if, after giving effect to such investment, the value attributable to such letters of credit or guarantees, as determined by the respective Funds' advisers, would exceed 25% of the respective Funds' total assets. If a percentage or rating restriction on investment or use of assets set forth herein or in a Prospectus is adhered to at the time, later changes in percentage or ratings resulting from any cause other than actions by a Fund will not be considered a violation. If the value of a Fund's holdings of illiquid securities at any time exceeds the percentage limitation applicable at the time of acquisition due to subsequent fluctuations in value or other reasons, the Board of Trustees will consider what actions, if any, are appropriate to maintain adequate liquidity. 21 22 PERFORMANCE INFORMATION From time to time, a Fund may use hypothetical investment examples and performance information in advertisements, shareholder reports or other communications to shareholders. Performance is calculated separately for each class of shares. Because such performance information is based on past investment results, it should not be considered as an indication or representation of the performance of any classes of a Fund in the future. From time to time, the performance and yield of classes of a Fund may be quoted and compared to those of other mutual funds with similar investment objectives, unmanaged investment accounts, including savings accounts, or other similar products and to stock or other relevant indices or to rankings prepared by independent services or other financial or industry publications that monitor the performance of mutual funds. For example, the performance of a Fund or its classes may be compared to data prepared by Lipper Analytical Services, Inc. or Morningstar Mutual Funds on Disc, widely recognized independent services which monitor the performance of mutual funds. Performance and yield data as reported in national financial publications including, but not limited to, Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or in local or regional publications, may also be used in comparing the performance and yield of a Fund or its classes. A Fund's performance may be compared with indices such as the Lehman Brothers Government/Credit Bond Index, the Lehman Brothers Government Bond Index, the Lehman Government Bond 1-3 Year Index and the Lehman Aggregate Bond Index; the S&P 500 Index, the Dow Jones Industrial Average or any other commonly quoted index of common stock prices; and the Russell 2000 Index and the NASDAQ Composite Index. Additionally, a Fund may, with proper authorization, reprint articles written about such Fund and provide them to prospective shareholders. A Fund may provide period and average annual "total rates of return." The "total rate of return" refers to the change in the value of an investment in a Fund over a period (which period shall be stated in any advertisement or communication with a shareholder) based on any change in net asset value per share including the value of any shares purchased through the reinvestment of any dividends or capital gains distributions declared during such period. For Class A shares, the average annual total rate of return figures will assume payment of the maximum initial sales load at the time of purchase. For Class B and Class C shares, the average annual total rate of return figures will assume deduction of the applicable contingent deferred sales charge imposed on a total redemption of shares held for the period. One-, five-, and ten-year periods will be shown, unless the class has been in existence for a shorter-period. Unlike some bank deposits or other investments which pay a fixed yield for a stated period of time, the yields and the net asset values (in the case of the Income Funds) of the classes of shares of a Fund will vary based on market conditions, the current market value of the securities held by a Fund and changes in the Fund's expenses. The adviser, Shareholder Servicing Agents, the Administrator, the Distributor and other service providers may voluntarily waive a portion of their fees on a month-to-month basis. In addition, the Distributor may assume a portion of a Fund's operating expenses on a month-to-month basis. These actions would have the effect of increasing the net income (and therefore the yield and total rate of return) of the classes of shares of a Fund during the period such waivers are in effect. These factors and possible 23 differences in the methods used to calculate the yields and total rates of return should be considered when comparing the yields or total rates of return of the classes of shares of a Fund to yields and total rates of return published for other investment companies and other investment vehicles (including different classes of shares). The Trust is advised that certain Shareholder Servicing Agents may credit to the accounts of their customers from whom they are already receiving other fees amounts not exceeding the Shareholder Servicing Agent fees received, which will have the effect of increasing the net return on the investment of customers of those Shareholder Servicing Agents. Such customers may be able to obtain through their Shareholder Servicing Agents quotations reflecting such increased return. Each Fund presents performance information for each class thereof since the commencement of operations of that Fund, rather than the date such class was introduced. Performance information for each class introduced after the commencement of operations of the related Fund is therefore based on the performance history of a predecessor class or classes. Performance information is restated to reflect the current maximum front-end sales charge (in the case of Class A Shares) or the maximum contingent deferred sales charge (in the case of Class B Shares) when presented inclusive of sales charges. Additional performance information may be presented which does not reflect the deduction or sales charges. Historical expenses reflected in performance information are based upon the distribution, shareholder servicing fees and other expenses actually incurred during the period presented and have not been restated, for periods during which the performance information for a particular class is based upon the performancehistory of a predecessor class, to reflect the ongoing expenses currently borne by the particular class. Advertising or communications to shareholders may contain the views of the advisers as to current market, economic, trade and interest rate trends, as well as legislative, regulatory and monetary developments, and may include investment strategies and related matters believed to be of relevance to a Fund. Advertisements for JPMorgan Funds may include references to the asset size of other financial products made available by JPMC, such as the offshore assets of other funds. TOTAL RATE OF RETURN A Fund's or class's total rate of return for any period will be calculated by (a) dividing (i) the sum of the net asset value per share on the last day of the period and the net asset value per share on the last day of the period of shares purchasable with dividends and capital gains declared during such period with respect to a share held at the beginning of such period and with respect to shares purchased with such dividends and capital gains distributions, by (ii) the public offering price per share on the first day of such period, and (b) subtracting 1 from the result. The average annual rate of return quotation will be calculated by (x) adding 1 to the period total rate of return quotation as calculated above, (y) raising such sum to a power which is equal to 365 divided by the number of days in such period, and (z) subtracting 1 from the result. 24 AVERAGE ANNUAL TOTAL RETURNS* (EXCLUDING SALES CHARGES) The average annual total rate of return figures for the following Funds, reflecting the initial investment and assuming the reinvestment of all distributions (but excluding the effects of any applicable sales charges) for, where applicable, the one, five and ten year periods ended August 31, 2000 were as follows:
DATE OF DATE OF ONE FIVE TEN SINCE FUND CLASS FUND YEAR YEARS YEARS INCEPTION INCEPTION INCEPTION - --- ---- ----- ----- --------- --------- --------- JPMorgan Prime Money Market Fund JPMorgan Federal Money Market Fund JPMorgan Treasury Plus Money Market Fund JPMorgan Tax Free Money Market Fund
- ------------- * The ongoing fees and expenses borne by Class B Shares are greater than those borne by Class A Shares. As indicated above, the performance information for each class introduced after the commencement of operations of the related Fund is based on the performance history of a predecessor class or classes and historical expenses have not been restated, for periods during which the performance information for a particular class is based upon the performance history of a predecessor class, to reflect the ongoing expenses currently borne by the particular class. Accordingly, the performance information presented in the table above and in each table that follows may be used in assessing each Fund's performance history but does note reflect how the distinct classes would have performed on a relative basis prior to the introduction of those classes which would require an adjustment to the ongoing expenses. The performance quoted reflects fee waivers that subsidize and reduce the total operating expenses of certain Funds (or classes thereof). Returns on these Funds (or classes) would have been lower if there were no such waivers. With respect to certain Funds, Chase and/or other service providers are obligated to waive certain fees and/or reimburse expenses. Each Fund's Prospectus discloses the extent of any agreements to waive fees and/or reimburse expenses. 25 AVERAGE ANNUAL TOTAL RETURNS* (INCLUDING SALES CHARGES) With the current maximum sales charge for Class A shares (4.50%) reflected and the currently applicable CDSC for Class B shares for each period length, the average annual total rate of return figures for the same periods would be as follows:
ONE FIVE TEN SINCE FUND YEAR YEARS YEARS INCEPTION - ---- ---- ----- ----- --------- JPMorgan Prime Money Market Fund JPMorgan Federal Money Market Fund JPMorgan Treasury Plus Money Market Fund JPMorgan Tax Free Money Market Fund
- ------------- * See the notes to the preceding table. The Funds may also from time to time include in advertisements or other communications a total return figure that is not calculated according to the formula set forth above in order to compare more accurately the performance of a Fund with other measures of investment return. YIELD QUOTATIONS Any current "yield" quotation for a class of shares of an Income Fund shall consist of an annualized hypothetical yield, carried at least to the nearest hundredth of one percent, based on a thirty calendar day period and shall be calculated by (a) raising to the sixth power the sum of 1 plus the quotient obtained by dividing the Fund's net investment income earned during the period by the product of the average daily number of shares outstanding during the period that were entitled to receive dividends and the maximum offering price per share on the last day of the period, (b) subtracting 1 from the result, and (c) multiplying the result by 2. Any current "yield" for a class of shares of a Money Market Fund which is used in such a manner as to be subject to the provisions of Rule 482(d) under the Securities Act of 1933, as amended, shall consist of an annualized historical yield, carried at least to the nearest hundredth of one percent, based on a specific seven calendar day period and shall be calculated by dividing the net change in the value of an account having a balance of one Share at the beginning of the period by the value of the account at the beginning of the period and multiplying the quotient by 365/7. For this purpose, the net change in account value would reflect the value of additional Shares purchased with dividends declared on the original Share and dividends declared on both the original Share and any such additional Shares, but would not reflect any realized gains or losses from the sale of securities or any unrealized appreciation or depreciation on portfolio securities. In addition, any effective yield quotation for a class of shares of a Money Market Fund so used shall be calculated by compounding the current yield quotation for such period by multiplying such quotation by 7/365, adding 1 to the product, raising the sum to a power equal to 365/7, and subtracting 1 from the result. A portion of the JPMorgan Tax Free Money Market Fund's income used in calculating such yields may be taxable. Any taxable equivalent yield quotation of a class of shares of the JPMorgan Tax Free Money Market Fund shall be calculated as follows. If the entire current yield quotation for such period is tax-exempt, the tax equivalent yield will be the current yield quotation (as determined in accordance with the appropriate calculation described above) divided by 1 minus a stated income tax rate or rates. If a portion of the current yield quotation is not tax-exempt, the tax equivalent yield will be the sum of (a) that portion of 26 the yield which is tax-exempt divided by 1 minus a stated income tax rate or rates and (b) the portion of the yield which is not tax-exempt.
CURRENT EFFECTIVE COMPOUND ANNUALIZED YIELD ANNUALIZED YIELD AS OF 8/31/00 AS OF 8/31/00 ---------------- ------------------- JPMorgan Prime Money Market Fund B Shares 5.46% 5.61% C Shares 5.46% 5.61% Reserve Shares 5.90% 6.07% Morgan Shares 6.11% 6.29% Premier Shares 6.24% 6.44% Institutional Shares 6.43% 6.64% JPMorgan Federal Money Market Fund Reserve Shares 5.71% 5.87% Morgan Shares 5.80% 5.97% Premier Shares 6.02% 6.20% Institutional Shares 6.24% 6.43% JPMorgan Treasury Plus Money Market Fund Morgan Shares 5.97% 6.15% Premier Shares 6.11% 6.30% Institutional Shares 6.31% 6.51%
CURRENT EFFECTIVE ANNUALIZED ANNUALIZED COMPOUND TAX EQUIVALENT YIELD ANNUALIZED YIELD YIELD* AS OF 8/31/00 AS OF 8/31/00 AS OF 8/31/00 ------------- ---------------- --------------- JPMorgan Tax Free Money Market Fund Reserve Shares 3.52% 3.58% 5.83% Morgan Shares 3.73% 3.80% 6.18% Premier Shares 3.80% 3.87% 6.29% Institutional Shares 4.06% 4.14% 6.72%
27
THIRTY-DAY TAX EQUIVALENT YIELD THIRTY-DAY YIELD* AS OF 8/31/00 AS OF 8/31/00 ------------- ------------------
- --------------- * The tax equivalent yields assume a federal income tax rate of 39.6% for the JPMorgan Tax Free Money Market Fund. NON-STANDARDIZED PERFORMANCE RESULTS* (EXCLUDING SALES CHARGES) The table below reflects the net change in the value of an assumed initial investment of $10,000 in the following Funds (excluding the effects of any applicable sales charges) for the ten year period ending August 31, 2000. The values reflect an assumption that capital gain distributions and income dividends, if any, have been invested in additional shares of the same class. From time to time, the Funds may provide these performance results in addition to the total rate of return quotations required by the Securities and Exchange Commission. As discussed more fully in the Prospectuses, neither these performance results, nor total rate of return quotations, should be considered as representative of the performance of the Funds in the future. These factors and the possible differences in the methods used to calculate performance results and total rates of return should be considered when comparing such performance results and total rate of return quotations of the Funds with those published for other investment companies and other investment vehicles.
TOTAL VALUE -------- JPMorgan Prime Money Market Fund JPMorgan Federal Money Market Fund JPMorgan Treasury Plus Money Market Fund JPMorgan Tax Free Money Market Fund
- ---------------- * See the notes to the table captioned "Average Annual Total Return (excluding sales charges)" above. 28 NON-STANDARDIZED PERFORMANCE RESULTS* (INCLUDES SALES CHARGES) With the current maximum sales charge of 4.50% for Class A shares, and the currently applicable CDSC for Class B shares for each period length, reflected, the figures for the same periods would be as follows:
TOTAL VALUE ------- JPMorgan Prime Money Market JPMorgan Federal Money Market JPMorgan Treasury Plus Money Market Fund JPMorgan Tax Free Money Market Fund
- ------------ * See the notes to the table captioned "Average Annual Total Return (excluding sales charges)" above. DETERMINATION OF NET ASSET VALUE As of the date of this Statement of Additional Information, the New York Stock Exchange is open for trading every weekday except for the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. In addition,to the days listed above (other than Good Friday), the Funds are closed for business on the following holidays: Martin Luther King Day, Columbus Day, and Veteran's Day. Each Fund calculates its NAV once each day at the close of regular trading on the New York Stock Exchange. The Money Market Funds' portfolio securities are valued at their amortized cost. Amortized cost valuation involves valuing an instrument at its cost and thereafter accrediting discounts and amortizing premiums at a constant rate to maturity. This method increases stability in valuation, but may result in periods during which the stated value of a portfolio security is higher or lower than the price a Fund would receive if the instrument were sold. Pursuant to the rules of the Securities and Exchange Commission, the Board of Trustees has established procedures to stabilize the net asset value of each Money Market Fund at $1.00 per share. However, no assurance can be given that the Money Market Funds will be able to do so on a continuous basis. These procedures include a review of the extent of any deviation of net asset value per share, based on available market rates (and appropriate substitutes which reflect current market conditions), from the $1.00 amortized cost price per share. If fluctuating interest rates cause the market value of a Money Market Fund's portfolio to approach a deviation of more than 1/2 of 1% from the value determined on the basis of amortized cost, the Board of Trustees will consider what action, if any, should be initiated. Such action may include redemption of shares in kind (as described in greater detail below), selling portfolio securities prior to maturity, reducing or withholding dividends and utilizing a net asset value per share as determined by using available market quotations. The Money Market Funds have established procedures designed to ensure that their portfolio securities meet their high quality criteria. Bonds and other fixed income securities (other than short-term obligations) in a Fund's portfolio are valued on the basis of valuations furnished by a pricing service, the use of which has been approved by the Board of Trustees. In making such valuations, the pricing service utilizes both dealer-supplied valuations and electronic data processing techniques that take into account appropriate factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, without exclusive reliance upon quoted prices or exchange or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of such securities. Short-term 29 obligations which mature in 60 days or less are valued at amortized cost, which constitutes fair value as determined by the Board of Trustees. Futures and option contracts that are traded on commodities or securities exchanges are normally valued at the settlement price on the exchange on which they are traded. Portfolio securities (other than short-term obligations) for which there are no such quotations or valuations are valued at fair value as determined in good faith by or at the direction of the Board of Trustees. Interest income on long-term obligations in a Fund's portfolio is determined on the basis of coupon interest accrued plus amortization of discount (the difference between acquisition price and stated redemption price at maturity) and premiums (the excess of purchase price over stated redemption price at maturity). Interest income on short-term obligations is determined on the basis of interest and discount accrued less amortization of premium. PURCHASES, REDEMPTIONS AND EXCHANGES The Fund has established certain procedures and restrictions, subject to change from time to time, for purchase, redemption, and exchange orders, including procedures for accepting telephone instructions and effecting automatic investments and redemptions. The Funds' Transfer Agent may defer acting on a shareholder's instructions until it has received them in proper form. In addition, the privileges described in the Prospectuses are not available until a completed and signed account application has been received by the Transfer Agent. Telephone transaction privileges are made available to shareholders automatically upon opening an account unless the privilege is declined in Section 6 of the Account Application. The Telephone Exchange Privilege is not available if you were issued certificates for shares that remain outstanding. Upon receipt of any instructions or inquiries by telephone from a shareholder or, if held in a joint account, from either party, or from any person claiming to be the shareholder, a Fund or its agent is authorized, without notifying the shareholder or joint account parties, to carry out the instructions or to respond to the inquiries, consistent with the service options chosen by the shareholder or joint shareholders in his or their latest account application or other written request for services, including purchasing, exchanging, or redeeming shares of such Fund and depositing and withdrawing monies from the bank account specified in the Bank Account Registration section of the shareholder's latest account application or as otherwise properly specified to such Fund in writing. Subject to compliance with applicable regulations, each Fund has reserved the right to pay the redemption price of its Shares, either totally or partially, by a distribution in kind of readily marketable portfolio securities (instead of cash). The securities so distributed would be valued at the same amount as that assigned to them in calculating the net asset value for the shares being sold. If a shareholder received a distribution in kind, the shareholder could incur brokerage or other charges in converting the securities to cash. The Trust has filed an election under Rule 18f-1 committing to pay in cash all redemptions by a shareholder of record up to amounts specified by the rule (approximately $250,000). Investors in Class A shares may qualify for reduced initial sales charges by signing a statement of intention (the "Statement"). This enables the investor to aggregate purchases of Class A shares in the Fund with purchases of Class A shares of any other Fund in the Trust (or if a Fund has only one class, shares of such Fund) excluding shares of any JPMorgan Money Market fund, during a 13-month period. The sales charge is based on the total amount to be invested in Class A shares during the 13-month period. All Class A or other qualifying shares of these funds currently owned by the investor will be credited as purchases (at their current offering prices on the date the Statement is signed) toward completion of the Statement. A 90-day back-dating period can be used to include earlier purchases at the investor's cost. The 13-month period would then begin on the date of the first purchase during the 90-day period. No retroactive adjustment will be made if purchases exceed the amount indicated in the Statement. A shareholder must notify the Transfer Agent or Distributor whenever a purchase is being made pursuant to a Statement. 30 The Statement is not a binding obligation on the investor to purchase the full amount indicated; however, on the initial purchase, if required (or subsequent purchases if necessary), 5% of the dollar amount specified in the Statement will be held in escrow by the Transfer Agent in Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) registered in the shareholder's name in order to assure payment of the proper sales charge. If total purchases pursuant to the Statement (less any dispositions and exclusive of any distributions on such shares automatically reinvested) are less than the amount specified, the investor will be requested to remit to the Transfer Agent an amount equal to the difference between the sales charge paid and the sales charge applicable to the aggregate purchases actually made. If not remitted within 20 days after written request, an appropriate number of escrowed shares will be redeemed in order to realize the difference. This privilege is subject to modification or discontinuance at any time with respect to all shares purchased thereunder. Reinvested dividend and capital gain distributions are not counted toward satisfying the Statement. Class A shares of a Fund may also be purchased by any person at a reduced initial sales charge which is determined by (a) aggregating the dollar amount of the new purchase and the greater of the purchaser's total (i) net asset value or (ii) cost of any shares acquired and still held in the Fund, or any other JPMorgan fund excluding any Money Market Fund, and (b) applying the initial sales charge applicable to such aggregate dollar value (the "Cumulative Quantity Discount"). The privilege of the Cumulative Quality Discount is subject to modification or discontinuance at any time with respect to all Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) purchased thereafter. An individual who is a member of a qualified group (as hereinafter defined) may also purchase Class A shares of a Fund (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) at the reduced sales charge applicable to the group taken as a whole. The reduced initial sales charge is based upon the aggregate dollar value of Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) previously purchased and still owned by the group plus the securities currently being purchased and is determined as stated in the preceding paragraph. In order to obtain such discount, the purchaser or investment dealer must provide the Transfer Agent with sufficient information, including the purchaser's total cost, at the time of purchase to permit verification that the purchaser qualifies for a cumulative quantity discount, and confirmation of the order is subject to such verification. Information concerning the current initial sales charge applicable to a group may be obtained by contacting the Transfer Agent. A "qualified group" is one which (i) has been in existence for more than six months, (ii) has a purpose other than acquiring Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) at a discount and (iii) satisfies uniform criteria which enables the Distributor to realize economies of scale in its costs of distributing Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund). A qualified group must have more than 10 members, must be available to arrange for group meetings between representatives of the Fund and the members, must agree to include sales and other materials related to the Fund in its publications and mailings to members at reduced or no cost to the Distributor, and must seek to arrange for payroll deduction or other bulk transmission of investments in the Fund. This privilege is subject to modification or discontinuance at any time with respect to all Class A shares (or if a Fund has only one class and is subject to an initial sales charge, shares of such Fund) purchased thereafter. Investors may be eligible to buy Class A shares at reduced sales charges. One's investment representative or the JPMorgan Funds Service Center should be consulted for details about JPMorgan's combined purchase privilege, cumulative quantity discount, statement of intention, group sales plan, employee benefit plans and other plans. Sales charges are waived if an investor is using redemption proceeds received within the prior ninety days from non-JPMorgan mutual funds to buy the shares, and on which he or she paid a front-end or contingent deferred sales charge. 31 Some participant-directed employee benefit plans participate in a "multi-fund" program which offers both JPMorgan and non-JPMorgan mutual funds. The money that is invested in JPMorgan Funds may be combined with the other mutual funds in the same program when determining the plan's eligibility to buy Class A shares for purposes of the discount privileges and programs described above. No initial sales charge will apply to the purchase of a Fund's Class A shares if (i) one is investing proceeds from a qualified retirement plan where a portion of the plan was invested in the JPMorgan Funds, (ii) one is investing through any qualified retirement plan with 50 or more participants or (iii) the investor is a participant in certain qualified retirement plans and is investing (or reinvesting) the proceeds from the repayment of a plan loan made to him or her. Purchases of a Fund's Class A shares may be made with no initial sales charge through an investment adviser or financial planner that charges a fee for its services. Purchases of a Fund's Class A shares may be made with no initial sales charge (i) by an investment adviser, broker or financial planner, provided arrangements are preapproved and purchases are placed through an omnibus account with the Fund or (ii) by clients of such investment adviser or financial planner who place trades for their own accounts, if such accounts are linked to a master account of such investment adviser or financial planner on the books and records of the broker or agent. Such purchases may also be made for retirement and deferred compensation plans and trusts used to fund those plans. Purchases of a Fund's Class A shares may be made with no initial sales charge in accounts opened by a bank, trust company or thrift institution which is acting as a fiduciary exercising investment discretion, provided that appropriate notification of such fiduciary relationship is reported at the time of the investment to the Fund, the Fund's distributor or the JPMorgan Funds Service Center. A Fund may sell Class A shares without an initial sales charge to the current and retired Trustees (and their immediate families), current and retired employees (and their immediate families) of JPMC, the Distributor and transfer agent or any affiliates or subsidiaries thereof, registered representatives and other employees (and their immediate families) of broker-dealers having selected dealer agreements with the Distributor, employees (and their immediate families) of financial institutions having selected dealer agreements with the Distributor (or otherwise having an arrangement with a broker-dealer or financial institution with respect to sales of JPMorgan Fund shares) and financial institution trust departments investing an aggregate of $1 million or more in the JPMorgan Funds. Shareholders of record of any JPMorgan fund as of November 30, 1990 and certain immediate family members may purchase a Fund's Class A shares with no initial sales charge for as long as they continue to own Class A shares of any JPMorgan fund, provided there is no change in account registration. Shareholders of other JPMorgan Funds may be entitled to exchange their shares for, or reinvest distributions from their funds in, shares of the Fund at net asset value. The Funds reserve the right to change any of these policies at any time and may reject any request to purchase shares at a reduced sales charge. Investors may incur a fee if they effect transactions through a broker or agent. 32 Class B shareholders of the JPMorgan Prime Money Market Fund, who have redeemed their shares and paid a CDSC with such redemption may purchase Class A shares with no initial sales charge (in an amount not in excess of their redemption proceeds) if the purchase occurs within 90 days of the redemption of the Class B (or C) shares. Under the Exchange Privilege, shares may be exchanged for shares of tanother fund only if shares of the fund exchanged into are registered in the state where the exchange is to be made. Shares of a Fund may only be exchanged into another fund if the account registrations are identical. With respect to exchanges from any Money Market Fund, shareholders must have acquired their shares in such money market fund by exchange from one of the other JPMorgan Funds or the exchange will be done at relative net asset value plus the appropriate sales charge. Any such exchange may create a gain or loss to be recognized for federal income tax purposes. Normally, shares of the fund to be acquired are purchased on the redemption date, but such purchase may be delayed by either fund for up to five business days if a fund determines that it would be disadvantaged by an immediate transfer of the proceeds. The contingent deferred sales charge for Class B shares will be waived for certain exchanges and for redemptions in connection with a Fund's systematic withdrawal plan, subject to the conditions described in the Prospectuses. In addition, subject to confirmation of a shareholder's status, the contingent deferred sales charge will be waived for: (i) a total or partial redemption made within one year of the shareholder's death or initial qualification for Social Security disability payments; (ii) a redemption in connection with a Minimum Required Distribution form an IRA, Keogh or custodial account under section 403(b) of the Internal Revenue Code or a mandatory distribution from a qualified plan; (iii) redemptions made from an IRA, Keogh or custodial account under section 403(b) of the Internal Revenue Code through an established Systematic Redemption Plan; (iv) a redemption resulting from an over-contribution to an IRA; (v) distributions from a qualified plan upon retirement; and (vi) an involuntary redemption of an account balance under $500. Up to 12% of the value of Class B shares subject to a systematic withdrawal plan may also be redeemed each year without a CDSC, provided that the Class B account had a minimum balance of $20,000 at the time the systematic withdrawal plan was established. Class B shares automatically convert to Class A shares (and thus are then subject to the lower expenses borne by Class A shares) after a period of time specified below has elapsed since the date of purchase (the "CDSC Period"), together with the pro rata portion of all Class B shares representing dividends and other distributions paid in additional Class B shares attributable to the Class B shares then converting. The conversion of Class B shares purchased on or after May 1, 1996, will be effected at the relative net asset values per share of the two classes on the first business day of the month following the eighth anniversary of the original purchase. The conversion of Class B shares purchased prior to May 1, 1996, will be effected at the relative net asset values per share of the two classes on the first business day of the month following the seventh anniversary of the original purchase. If any exchanges of Class B shares during the CDSC Period occurred, the holding period for the shares exchanged will be counted toward the CDSC Period. At the time of the conversion the net asset value per share of the Class A shares may be higher or lower than the net asset value per share of the Class B shares; as a result, depending on the relative net asset values per share, a shareholder may receive fewer or more Class A shares than the number of Class B shares converted. 33 A Fund may require signature guarantees for changes that shareholders request be made in Fund records with respect to their accounts, including but not limited to, changes in bank accounts, for any written requests for additional account services made after a shareholder has submitted an initial account application to the Fund, and in certain other circumstances described in the Prospectuses. A Fund may also refuse to accept or carry out any transaction that does not satisfy any restrictions then in effect. A signature guarantee may be obtained from a bank, trust company, broker-dealer or other member of a national securities exchange. Please note that a notary public cannot provide a signature guarantee. DISTRIBUTIONS; TAX MATTERS The following is only a summary of certain additional tax considerations generally affecting the Funds and their shareholders that are not described in the respective Fund's Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Funds or their shareholders, and the discussions here and in each Fund's Prospectus are not intended as substitutes for careful tax planning. QUALIFICATION AS A REGULATED INVESTMENT COMPANY Each Fund has elected to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and to meet all other requirements that are necessary for it to be relieved of federal taxes on income and gains it distributes to shareholders. Net investment income for each Fund consists of all interest accrued and discounts earned, less amortization of any market premium on the portfolio assets of the Fund and the accrued expenses of the Fund. As a regulated investment company, each Fund is not subject to federal income tax on the portion of its net investment income (i.e., its investment company taxable income, as that term is defined in the Code, without regard to the deduction for dividends paid) and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) that it distributes to shareholders, provided that it distributes at least 90% of its net investment income and at least 90% of its tax-exempt income (net of expenses allocable thereto) for the taxable year (the "Distribution Requirement"), and satisfies certain other requirements of the Code that are described below. Because certain Funds invest all of their assets in Portfolios which will be classified as partnerships for federal income tax purposes, such Funds will be deemed to own a proportionate share of the income of the Portfolio into which each contributes all of its assets for purposes of determining whether such Funds satisfy the Distribution Requirement and the other requirements necessary to qualify as a regulated investment company (e.g., Income Requirement (hereinafter defined), etc.). In addition to satisfying the Distribution Requirement, a regulated investment company must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "Income Requirement"). In addition to satisfying the requirements described above, each Fund must satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of a Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers (as to which the Fund has not invested more than 5% of the value of the Fund's total assets in securities of such issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of such issuer), and no more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses. Each Fund may engage in hedging or derivatives transactions involving foreign currencies, forward contracts, options and futures contracts (including options, futures and forward contracts on 34 foreign currencies) and short sales. See "Additional Policies Regarding Derivative and Related Transactions." Such transactions will be subject to special provisions of the Code that, among other things, may affect the character of gains and losses realized by the Fund (that is, may affect whether gains or losses are ordinary or capital), accelerate recognition of income of the Fund and defer recognition of certain of the Fund's losses. These rules could therefore affect the character, amount and timing of distributions to shareholders. In addition, these provisions (1) will require a Fund to "mark-to-market" certain types of positions in its portfolio (that is, treat them as if they were closed out) and (2) may cause a Fund to recognize income without receiving cash with which to pay dividends or make distributions in amounts necessary to satisfy the Distribution Requirement and avoid the 4% excise tax (described below). Each Fund intends to monitor its transactions, will make the appropriate tax elections and will make the appropriate entries in its books and records when it acquires any option, futures contract, forward contract or hedged investment in order to mitigage the effect of these rules. If for any taxable year a Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) will be subject to tax at regular corporate rates without any deduction for distributions to shareholders, and such distributions will be taxable to the shareholders as ordinary dividends to the extent of the Fund's current and accumulated earnings and profits. Such distributions generally will be eligible for the dividends-received deduction in the case of corporate shareholders. EXCISE TAX ON REGULATED INVESTMENT COMPANIES A 4% non-deductible excise tax is imposed on a regulated investment company that fails to distribute in each calendar year an amount equal to 98% of ordinary taxable income for the calendar year and 98% of capital gain net income for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable year (a "taxable year election"))(Tax-exempt interest on municipal obligations is not subject to the excise tax). The balance of such income must be distributed during the next calendar year. For the foregoing purposes, a regulated investment company is treated as having distributed any amount on which it is subject to income tax for any taxable year ending in such calendar year. Each Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. However, investors should note that a Fund may in certain circumstances be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. FUND DISTRIBUTIONS Each Fund anticipates distributing substantially all of its net investment income for each taxable year. Such distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes, but they will not qualify for the 70% dividends-received deduction for corporations only to the extent described below. Dividends paid on Class A, Class B and Class C shares are calculated at the same time. In general, dividends on Class B and Class C shares are expected to be lower than those on Class A shares due to the higher distribution expenses borne by the Class B and Class C shares. Dividends may also differ between classes as a result of differences in other class specific expenses. If a check representing a Fund distribution is not cashed by a shareholder within a specified period, the JPMorgan Funds Service Center will notify the shareholder that he or she has the option of requesting another check or reinvesting the distribution in the Fund or in an established account of another JPMorgan Fund. If the JPMorgan Funds Service Center does not receive the shareholder's election, the distribution will be reinvested in the Fund. Similarly, if the Fund or the JPMorgan Funds Service Center sends the shareholder correspondence returned as "undeliverable," distributions will automatically be reinvested in the Fund. A Fund may either retain or distribute to shareholders its net capital gain for each taxable year. Each Fund currently intends to distribute any such amounts. If net capital gain is distributed and designated as a capital gain dividend, it will be taxable to shareholders as long-term capital gain, regardless of the length of 35 time the shareholder has held his shares or whether such gain was recognized by the Fund prior to the date on which the shareholder acquired his shares. Under current legislation, the maximum rate of tax on long-term capital gains of individuals is 20% (10% for gains otherwise taxed at 15%) for long-term capital gains realized with respect to capital assets held for more than 12 months. Additionally, beginning after December 31, 2000, the maximum tax rate for capital assets with a holding period beginning after that date and held for more than five years will be 18%. Conversely, if a Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carryovers) at the 35% corporate tax rate. If a Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders of record on the last day of its taxable year treated as if each received a distribution of his pro rata share of such gain, with the result that each shareholder will be required to report his pro rata share of such gain on his tax return as long-term capital gain, will receive a refundable tax credit for his pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for his shares by an amount equal to the deemed distribution less the tax credit. Ordinary income dividends paid by a Fund with respect to a taxable year will qualify for the 70% dividends-received deduction generally available to corporations to the extent of the amount of qualifying dividends received by a Fund from domestic corporations for the taxable year. A dividend received by a Fund will not be treated as a qualifying dividend (1) if it has been received with respect to any share of stock that the Fund has held for less than 46 days (91 days in the case of certain preferred stock) during the 90 day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 180 day period beginning 90 days before such date in the case of certain preferred stock) under the Rules of the Code section 246(c)(3) and (4); (2) to the extent that a fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property; or (3) to the extent the stock on which the dividend is paid is treated as debt-financed under the rules of Code Section 246A. Moreover, the dividends-received deduction for a corporate shareholder may be disallowed or reduced if the corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of a Fund. In the case where a Fund invests all of its assets in a Portfolio and the Fund satisfies the holding period rules pursuant to Code Section 256(C) as to its interest in the Portfolio, a corporate shareholder which satisfies the foregoing requirements with respect to its shares of the Fund should receive the dividends-received deduction. For purposes of the Corporate alternative minimum tax ("AMT"), the corporate dividends-received deduction is not itself an item of tax preference that must be added back to taxable income or is otherwise disallowed in determining a corporation's AMT. However, corporate shareholders will generally be required to take the full amount of any dividend received from a Fund into account (without a dividends-received deduction) in determining its adjusted current earnings. The JPMorgan Tax Free Money Market Fund intends to qualify to pay exempt-interest dividends by satisfying the requirement that at the close of each quarter of the JPMorgan Tax Free Money Market Fund's taxable year at least 50% of the its total assets consists of tax-exempt municipal obligations. Distributions from the JPMorgan Tax Free Money Market Fund will constitute exempt-interest dividends to the extent of its tax-exempt interest income (net of expenses and amortized bond premium). Exempt-interest dividends distributed to shareholders of the JPMorgan Tax Free Money Market Fund are excluded from gross income for federal income tax purposes. However, shareholders required to file a federal income tax return will be required to report the receipt of exempt-interest dividends on their returns. Moreover, while exempt-interest dividends are excluded from gross income for federal income tax purposes, they may be subject to alternative minimum tax in certain circumstances and may have other collateral tax consequences as discussed below. Distributions by the JPMorgan Tax Free Money Market Fund of any investment company taxable income or of any net capital gain will be taxable to shareholders as discussed above. 36 AMT is imposed in addition to, but only to the extent it exceeds, the regular tax and is computed at a maximum marginal rate of 28% for noncorporate taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's alternative minimum taxable income ("AMTI") over an exemption amount. In addition, under the Superfund Amendments and Reauthorization Act of 1986, a tax is imposed for taxable years beginning after 1986 and before 1996 at the rate of 0.12% on the excess of a corporate taxpayer's AMTI (determined without regard to the deduction for this tax and the AMT net operating loss deduction) over $2 million. Exempt-interest dividends derived from certain "private activity" municipal obligations issued after August 7, 1986 will generally constitute an item of tax preference includable in AMTI for both corporate and noncorporate taxpayers. In addition, exempt-interest dividends derived from all municipal obligations, regardless of the date of issue, must be included in adjusted current earnings, which are used in computing an additional corporate preference item (i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings over its AMTI (determined without regard to this item and the AMT net operating loss deduction)) includable in AMTI. Exempt-interest dividends must be taken into account in computing the portion, if any, of social security or railroad retirement benefits that must be included in an individual shareholder's gross income and subject to federal income tax. Further, a shareholder of the JPMorgan Tax Free Money Market Fund is denied a deduction for interest on indebtedness incurred or continued to purchase or carry shares of the Fund. Moreover, a shareholder who is (or is related to) a "substantial user" of a facility financed by industrial development bonds held by the JPMorgan Tax Free Money Market Fund will likely be subject to tax on dividends paid by the JPMorgan Tax Free Money Market Fund which are derived from interest on such bonds. Receipt of exempt-interest dividends may result in other collateral federal income tax consequences to certain taxpayers, including financial institutions, property and casualty insurance companies and foreign corporations engaged in a trade or business in the United States. Prospective investors should consult their own tax advisers as to such consequences. Net investment income that may be received by certain of the Funds from sources within foreign countries may be subject to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle any such Fund to a reduced rate of, or exemption from, taxes on such income. It is impossible to determine the effective rate of foreign tax in advance since the amount of any such Fund's assets to be invested in various countries is not known. Distributions by a Fund that do not constitute ordinary income dividends, exempt-interest dividends or capital gain dividends will be treated as a return of capital to the extent of (and in reduction of) the shareholder's tax basis in his shares; any excess will be treated as gain from the sale of his shares, as discussed below. Distributions by a Fund will be treated in the manner described above regardless of whether such distributions are paid in cash or reinvested in additional shares of the Fund (or of another fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date. In addition, if the net asset value at the time a shareholder purchases shares of a Fund reflects undistributed net investment income or recognized capital gain net income, or unrealized appreciation in the value of the assets of the Fund, distributions of such amounts will be taxable to the shareholder in the manner described above, although such distributions economically constitute a return of capital to the shareholder. Ordinarily, shareholders are required to take distributions by a Fund into account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year. A Fund will be required in certain cases to withhold and remit to the U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and the proceeds of redemption of shares, paid to any shareholder 37 (1) who has provided either an incorrect tax identification number or no number at all, (2) who is subject to backup withholding by the IRS for failure to report the receipt of interest or dividend income properly, or (3) who has failed to certify to the Fund that it is not subject to backup withholding or that it is a corporation or other "exempt recipient." SALE OR REDEMPTION OF SHARES Each Money Market Fund seeks to maintain a stable net asset value of $1.00 per share; however, there can be no assurance that a Money Market Fund will do this. In such a case, a shareholder will recognize gain or loss on the sale or redemption of shares of a Fund in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder's adjusted tax basis in the shares. All or a portion of any loss so recognized may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the sale or redemption. In general, any gain or loss arising from (or treated as arising from) the sale or redemption of shares of a Fund will be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year. However, any capital loss arising from the sale or redemption of shares held for six months or less will be disallowed to the extent of the amount of exempt-interest dividends received on such shares and (to the extent not disallowed) will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on such shares. FOREIGN SHAREHOLDERS Taxation of a shareholder who, as to the United States, is a nonresident alien individual, foreign trust or estate, foreign corporation, or foreign partnership ("foreign shareholder"), depends on whether the income from a Fund is "effectively connected" with a U.S. trade or business carried on by such shareholder. If the income from a Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder, paid to a foreign shareholder from net investment income will be subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount of the dividend. Such a foreign shareholder would generally be exempt from U.S. federal income tax on gains realized on the sale of shares of the Fund and capital gain dividends and amounts retained by the Fund that are designated as undistributed capital gains. If the income from a Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then ordinary income dividends, capital gain dividends, and any gains realized upon the sale of shares of the Fund will be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations. In the case of foreign noncorporate shareholders, a Fund may be required to withhold U.S. federal income tax at a rate of 31% on distributions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless such shareholders furnish the Fund with proper notification of their foreign status. The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisers with respect to the particular tax consequences to them of an investment in a Fund, including the applicability of foreign taxes. STATE AND LOCAL TAX MATTERS Depending on the residence of the shareholder for tax purposes, distributions may also be subject to state and local taxes or withholding taxes. Most states provide that a RIC may pass through (without restriction) to its shareholders state and local income tax exemptions available to direct owners of certain types of U.S. government securities (such as U.S. Treasury obligations). Thus, for residents of these states, distributions derived from a Fund's investment in certain types of U.S. government securities should be free from state and local income taxes to the extent that the interest income from such investments would have 38 been exempt from state and local income taxes if such securities had been held directly by the respective shareholders themselves. Certain states, however, do not allow a RIC to pass through to its shareholders the state and local income tax exemptions available to direct owners of certain types of U.S. government securities unless the RIC holds at least a required amount of U.S. government securities. Accordingly, for residents of these states, distributions derived from a Fund's investment in certain types of U.S. government securities may not be entitled to the exemptions from state and local income taxes that would be available if the shareholders had purchased U.S. government securities directly. Shareholders' dividends attributable to a Fund's income from repurchase agreements generally are subject to state and local income taxes, although states and regulations vary in their treatment of such income. The exemption from state and local income taxes does not preclude states from asserting other taxes on the ownership of U.S. government securities. To the extent that a Fund invests to a substantial degree in U.S. government securities which are subject to favorable state and local tax treatment, shareholders of such Fund will be notified as to the extent to which distributions from the Fund are attributable to interest on such securities. Rules of state and local taxation of ordinary income dividends and capital gain dividends from RICs may differ from the rules for U.S. federal income taxation in other respects. Shareholders are urged to consult their tax advisers as to the consequences of these and other state and local tax rules affecting investment in a Fund. EFFECT OF FUTURE LEGISLATION The foregoing general discussion of U.S. federal income tax consequences is based on the Code and the Treasury Regulations issued thereunder as in effect on the date of this Statement of Additional Information. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the transactions contemplated herein. MANAGEMENT OF THE TRUST AND THE FUNDS TRUSTEES AND OFFICERS The mailing address of the Trustees and Officers of the Trust, who are also the Trustees of each of the Funds, as defined below, is 522 Fifth Avenue, New York, New York 10036. Their names, principal occupations during the past five years and dates of birth are set forth below: WILLIAM J. ARMSTRONG--Trustee; Retired; formerly Vice President and Treasurer Ingersoll-Rand Company. Age: 59. ROLAND R. EPPLEY, JR.--Trustee; Retired; formerly President and Chief Executive Officer, Eastern States Bankcard Association, Inc. (1971 - 1988); Director, Janel Hydraulics, Inc.; formerly Director of The Hanover Funds, Inc. Age: 68. ANN MAYNARD GRAY--Trustee; Former President, Diversified Publishing Group and Vice President, Capital Cities/ABC, Inc. Age: 55. MATTHEW HEALEY--Trustee; Chief Executive Officer. Chariman, Pierpont Group, since prior to 1993. Age: 63. FERGUS REID, III--Trustee; Chairman and Chief Executive Officer, Lumelite Corporation, since September 1985; Trustee, Morgan Stanley Funds. Age: 68. JAMES J. SCHONBACHLER--Trustee; Retired; Prior to September, 1998, Managing Director, Bankers Trust Company and Chief Executive Officer and Director, Bankers Trust A.G., Zurich and BT Brokerage Corp. Age: 58. 39 LEONARD M. SPALDING--Trustee; Retired; formerly Chief Executive Officer of Chase Mutual Funds Corp.; formerly President and Chief Executive Officer of Vista Capital Management; and formerly Chief Investment Executive of the Chase Manhattan Private Bank. Age: 65. H. RICHARD VARTABEDIAN--Trustee; Investment Management Consultant; formerly, Senior Investment Officer, Division Executive of the Investment Management Division of the Chase Manhattan Bank, N.A., 1980-1991. Age: 65. MARTIN R. DEAN--Treasurer. Vice President, Administration Services, BISYS Fund Services, Inc.; formerly Senior Manager, KPMG Peat Marwick (1987-1994). Age: 37. Address: 3435 Stelzer Road, Columbus, OH 43219. LISA HURLEY--Secretary. Executive Vice President and General Counsel, BISYS Fund Services, Inc.; formerly Counsel to Moore Capital Management and General Counsel to Global Asset Management and Northstar Investments Management. Age: 45. Address: 90 Park Avenue, New York, NY 10016. VICKY M. HAYES--Assistant Secretary. Vice President and Global Marketing Manager, Vista Fund Distributors, Inc.; formerly Assistant Vice President, Alliance Capital Management and held various positions with J. & W. Seligman & Co. Age: 37. Address: 1211 Avenue of the Americas, 41st Floor, New York, NY 10036. 40 ALAINA METZ--Assistant Secretary. Chief Administrative Officer, BISYS Fund Services, Inc.; formerly Supervisor, Blue Sky Department, Alliance Capital Management L.P. Age: 33. Address: 3435 Stelzer Road, Columbus, OH 43219. - ------------- *Asterisks indicate those Trustees that are "interested persons" (as defined in the 1940 Act). Mr. Reid is not an interested person of the Trust's investment advisers or principal underwriter, but may be deemed an interested person of the Trust solely by reason of being chairman of the Trust. A majority of the disinterested Trustees have adopted written procedures reasonably appropriate to deal with potential conflicts of interest arising from the fact that the same individuals are Trustees of the Trust, each of the Funds and the J.P. Morgan Institutional Funds up to and including creating a separate board of trustees. The Board of Trustees of the Trust presently has an Audit Committee. The members of the Audit Committee are Messrs. Ten Haken (Chairman), Armstrong, Eppley, MacCallan and Thode. The function of the Audit Committee is to recommend independent auditors and monitor accounting and financial matters. The Audit Committee met two times during the fiscal period ended August 31, 2000. The Trustees and officers of the Trust appearing in the table above also serve in the same capacities with respect to Mutual Fund Group, Mutual Fund Variable Annuity Trust, Mutual Fund Select Group, Mutual Fund Select Trust, Mutual Fund Investment Trust, Mutual Fund Master Investment Trust, Capital Growth Portfolio, Growth and Income Portfolio, International Equity Portfolio and the other JPMorgan Funds. REMUNERATION OF TRUSTEES AND CERTAIN EXECUTIVE OFFICERS: Each Trustee is reimbursed for expenses incurred in attending each meeting of the Board of Trustees or any committee thereof. Each Trustee who is not an affiliate of the advisers is compensated for his or her services according to a fee schedule which recognizes the fact that each Trustee also serves as a Trustee of other investment companies advised by the advisers. Each Trustee receives a fee, allocated among all investment companies for which the Trustee serves, which consists of an annual retainer component and a meeting fee component. Each Trustee is currently paid an annual fee of $75,000 (adjusted as of April 1, 1997) for serving as Trustee of the Trust and the J.P. Morgan Funds. Each is reimbursed for expenses incurred in connection with service as a Trustee. The Trustees may hold various other directorships unrelated to these funds. Set forth below is information regarding compensation paid or accrued during the fiscal year ended August 31, 2000 for each Trustee of the Trust:
JPMORGAN JPMORGAN FEDERAL JPMORGAN JPMORGAN TREASURY MONEY TAX FREE PRIME PLUS MARKET MONEY MONEY MARKET MONEY MARKET FUND MARKET FUND FUND FUND ----------- ----------- ------------ ------------ Fergus Reid, III, Trustee $ $5,868 $39,798 $ H. Richard Vartebedian, Trustee 4,090 27,770 William J. Armstrong, Trustee 2,752 18,781 Roland R. Eppley, Jr., Trustee 2,797 18,814 Leonard M. Spalding, Jr., Trustee 2,752 18,781 Matthew Healey NA NA NA NA Ann Maynard Gray NA NA NA NA James J. Schonbachler NA NA NA NA
41
PENSION OR RETIREMENT COMPENSATION FROM BENEFITS ACCRUED AS FUND TOTAL COMPENSATION FROM TRUST EXPENSES "FUND COMPLEX" ----------------- ------------------------ ----------------------- William J. Armstrong, Trustee $ 90,000 $ 41,781 $131,781(10)(3) Roland R. Eppley, Jr., Trustee $ 91,000 $ 58,206 $149,206(10)(3) Ann Maynard Gray, Member of NA NA $ 75,000(17)(3) Advisory Board of certain J.P. Morgan Funds Matthew Healey, Trustee(2) NA NA $ 75,000(17)(3) Fergus Reid, III, Trustee $202,750 $110,091 $312,841(10)(3) James J. Schonbachler-- NA NA $ 75,000(17)(3) Member of Advisory Board of certain J.P. Morgan Funds Leonard M. Spalding, Jr. $ 89,000 $ 35,335 $124,335(10)(3) Trustee H. Richard Vartabedian, Trustee $134,350 $ 86,791 $122,141(10)(3)
- ------------- (1) A Fund Complex means two or more investment companies that hold themselves out to investors as related companies for purposes of investment and investment services, or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other investment companies. The Fund Complex for which the nominees will serve includes 14 investment companies. (2) Pierpont Group, Inc. paid Mr. Healey, in his role as Chairman of Pierpont Group, Inc., compensation in the amount of $200,000, contributed $25,500 to a defined contribution plan on his behalf and paid $18,400 in insurance premiums for his benefit. (3) Total number of investment company boards with respect to Trustees, or Advisory Boards with respect to Advisory Board members, served on within the Fund Complex. 42 FUNDS RETIREMENT PLAN FOR ELIGIBLE TRUSTEES Effective August 21, 1995, the Trustees also instituted a Retirement Plan for Eligible Trustees (the "Plan") pursuant to which each Trustee (who is not an employee of any of the Funds, the Adviser, the administrator or distributor or any of their affiliates) may be entitled to certain benefits upon retirement from the Board of Trustees. Pursuant to the Plan, the normal retirement date is the date on which the eligible Trustee has attained age 65 and has completed at least five years of continuous service with one or more of the investment companies advised by the Adviser and its affiliates (collectively, the "Covered Funds"). Each Eligible Trustee is entitled to receive from the Covered Funds an annual benefit commencing on the first day of the calendar quarter coincident with or following his date of retirement equal to the sum of (1) 8% of the highest annual compensation received from the Covered Funds multiplied by the number of such Trustee's years of service (not in excess of 10 years) completed with respect to any Covered Funds and (ii) 4% of the highest annual compensation received from the Covered Funds for each year of service in excess of 10 years, provided that no Trustee's annual benefit will exceed the highest annual compensation received by that Trustee from the Covered Funds. Such benefit is payable to each eligible Trustee in monthly installments for the life of the Trustee. On February 22, 2001, the Board of Trustees voted to terminate the Plan and to pay Trustees an agreed-upon amount of compensation. Effective August 21, 1995, the Trustees instituted a Deferred Compensation Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which each Trustee (who is not an employee of any of the Funds, the Adviser, the administrator or distributor or any of their affiliates) may enter into agreements with the Funds whereby payment of the Trustees' fees are deferred until the payment dated elected by the Trustee (or the Trustee's termination of service). The deferred amounts are deemed invested in shares of funds as elected by the Trustee at the time of deferral. If a deferring Trustee dies prior to the distribution of amounts held in the deferral account, the balance of the deferral account will be distributed to the Trustee's designated beneficiary in a single lump sum payment as soon as practicable after such deferring Trustee's death. Mr. Vartabedian has executed a deferred compensation agreement for the 2000 calendar year. The Declaration of Trust provides that the Trust will indemnify its Trustees and officers against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with the Trust, unless, as to liability to the Trust or its shareholders, it is finally adjudicated that they engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in their offices or with respect to any matter unless it is finally adjudicated that they did not act in good faith in the reasonable belief that their actions were in the best interest of the Trust. In the case of settlement, such 43 indemnification will not be provided unless it has been determined by a court or other body approving the settlement or other disposition, or by a reasonable determination based upon a review of readily available facts, by vote of a majority of disinterested Trustees or in a written opinion of independent counsel, that such officers or Trustees have not engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of their duties. ADVISER Prior to February 28, 2001, the adviser to the Funds was the Chase Manhattan Bank. The day to day management of the Funds was handled by the sub-adviser, Chase Fleming Asset Management (USA) Inc. Effective February 28, 2001, J.P. Morgan Fleming Asset Management (USA) Inc. (JPMFAM (USA)), acts as investment adviser to the Funds pursuant to an Investment Advisory Agreement (the "Advisory Agreement"). Subject to such policies as the Board of Trustees may determine, JPMFAM (USA) is responsible for investment decisions for the Funds. Pursuant to the terms of the Advisory Agreement, JPMFAM (USA) provides the Funds with such investment advice and supervision as it deems necessary for the proper supervision of the Funds' investments. The advisers continuously provide investment programs and determine from time to time what securities shall be purchased, sold or exchanged and what portion of the Funds' assets shall be held uninvested. The advisers to the Funds furnish, at their own expense, all services, facilities and personnel necessary in connection with managing the investments and effecting portfolio transactions for the Funds. The Advisory Agreement for the Funds will continue in effect from year to year only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of a Funds' outstanding voting securities and by a majority of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party, at a meeting called for the purpose of voting on such Advisory Agreement. Under the Advisory Agreement the adviser may utilize the specialized portfolio skills of all its various affiliates, thereby providing the Funds with greater opportunities and flexibility in accessing investment expertise. Pursuant to the terms of the Advisory Agreement, the adviser is permitted to render services to others. Each advisory agreement is terminable without penalty by the Trust on behalf of the Funds on not more than 60 days', nor less than 30 days', written notice when authorized either by a majority vote of a Fund's shareholders or by a vote of a majority of the Board of Trustees of the Trust, or by the adviser or sub-adviser on not more than 60 days', nor less than 30 days', written notice, and will automatically terminate in the event of its "assignment" (as defined in the 1940 Act). The advisory agreements provide that the adviser under such agreement shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of portfolio transactions for the respective Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties thereunder. In the event the operating expenses of the Funds, including all investment advisory, administration and sub-administration fees, but excluding brokerage commissions and fees, taxes, interest and extraordinary expenses such as litigation, for any fiscal year exceed the most restrictive expense limitation applicable to the Funds imposed by the securities law or regulations thereunder of any state in which the shares of the Funds are qualified for sale as such limitations may be raised or lowered from time to time, the adviser shall reduce its advisory fee (which fee is described below) to the extent of its share of such excess expenses. The amount of any such reduction to be borne by the adviser shall be deducted from the monthly advisory fee otherwise payable with respect to the Funds during such fiscal year; and if such amounts should exceed the monthly fee, the adviser shall pay to a Fund its share of such excess expenses no later than the last day of the first month of the next succeeding fiscal year. 44 JPMFAM (USA), a wholly-owned subsidiary of JPMorgan Chase & Co. JPMFAM (USA) is registered with the Securities and Exchange Commission as an investment adviser. Also included among JPMFAM (USA) accounts are commingled trust funds and a broad spectrum of individual trust and investment management portfolios. These accounts have varying investment objectives. JPMFAM (USA) is located at 522 Fifth Avenue, New York, New York, 10036. In consideration of the services provided by the adviser pursuant to the Advisory Agreement, the adviser is entitled to receive from each Fund an investment advisory fee computed daily and paid monthly based on a rate equal to a percentage of such Fund's average daily net assets specified in the relevant Prospectuses. However, the adviser may voluntarily agree to waive a portion of the fees payable to it on a month-to-month basis. The contractual Advisory and Sub-Advisory fees for the Funds are as follows:
FUND ADVISORY FEE - ---- ------------ Money Market Funds 0.10%
45 For the three most recent fiscal years, JPMFAM was paid or accrued the following investment advisory fees with respect to the following Funds, and voluntarily waived the amounts in parentheses following such fees with respect to each such period.
FISCAL YEAR- FISCAL YEAR- FISCAL YEAR- ENDED ENDED ENDED FUND 8/31/98 8/31/99 8/31/00 - ---- ----------- ------------ ------------- JPMorgan Prime Money Market Fund Paid or Accrued 3,711,416 7,769,214 10,632,595 Waived -- -- -- JPMorgan Federal Money Market Fund Paid or Accrued 793,764 1,034,981 1,135,618 Waived -- -- -- JPMorgan Treasury Plus Money Market Fund Paid or Accrued 2,384,985 2,850,010 2,714,066 Waived -- -- -- JPMorgan Tax Free Money Market Fund Paid or Accrued 1,120,701 1,317,375 1,565,165 Waived -- -- --
46 ADMINISTRATOR Pursuant to an Administration Agreement (the "Administration Agreement"), the Chase Manhattan Bank ("Chase") serves as administrator of the Funds. Chase provides certain administrative services to the Funds, including, among other responsibilities, coordinating the negotiation of contracts and fees with, and the monitoring of performance and billing of, the Funds' independent contractors and agents; preparation for signature by an officer of the Trust of all documents required to be filed for compliance by the Trust with applicable laws and regulations excluding those of the securities laws of various states; arranging for the computation of performance data, including net asset value and yield; responding to shareholder inquiries; and arranging for the maintenance of books and records of the Funds and providing, at its own expense, office facilities, equipment and personnel necessary to carry out its duties. Chase in its capacity as administrator does not have any responsibility or authority for the management of the Funds, the determination of investment policy, or for any matter pertaining to the distribution of Fund shares. Under the Administration Agreement Chase is permitted to render administrative services to others. The Administration Agreement will continue in effect from year to year with respect to each Fund only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of such Fund's outstanding voting securities and, in either case, by a majority of the Trustees who are not parties to the Administration Agreement or "interested persons" (as defined in the 1940 Act) of any such party. The Administration Agreement is terminable without penalty by the Trust on behalf of each Fund on 60 days' written notice when authorized either by a majority vote of such Fund's shareholders or by vote of a majority of the Board of Trustees, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust, or by Chase on 60 days' written notice, and will automatically terminate in the event of its "assignment" (as defined in the 1940 Act). The Administration Agreement also provides that neither Chase nor its personnel shall be liable for any error of judgment or mistake of law or for any act or omission in the administration of the Funds, except for willful misfeasance, bad faith or gross negligence in the performance of its or their duties or by reason of reckless disregard of its or their obligations and duties under the Administration Agreement. In addition, the Administration Agreement provides that, in the event the operating expenses of any Fund, including all investment advisory, administration and sub-administration fees, but excluding brokerage commissions and fees, taxes, interest and extraordinary expenses such as litigation, for any fiscal year exceed the most restrictive expense limitation applicable to that Fund imposed by the securities laws or regulations thereunder of any state in which the shares of such Fund are qualified for sale, as such limitations may be raised or lowered from time to time, Chase shall reduce its administration fee (which fee is described below) to the extent of its share of such excess expenses. The amount of any such reduction to be borne by Chase shall be deducted from the monthly administration fee otherwise payable to Chase during such fiscal years; and if such amounts should exceed the monthly fee, Chase shall pay to such Fund its share of such excess expenses no later than the last day of the first month of the next succeeding fiscal year. In consideration of the services provided by Chase pursuant to the Administration Agreement, Chase receives from each Fund a fee computed daily and paid monthly at an annual rate equal to 0.05% of each Money Market Fund's average daily net assets on an annualized basis for the Fund's then-current fiscal year. Chase may voluntarily waive a portion of the fees payable to it with respect to each Fund on a month-to-month basis. 47 For the three most recent fiscal years, Chase was paid or accrued administration fees, and voluntarily waived the amounts in parentheses for the following Funds:
FISCAL YEAR- FISCAL YEAR- FISCAL YEAR- ENDED ENDED ENDED FUND 8/31/98 8/31/99 8/31/00 - ---- ------------ ------------ ------------- JPMorgan Prime Money Market Fund Paid or Accrued 1,855,708 3,884,607 5,316,298 Waived -- -- -- JPMorgan Federal Money Market Fund Paid or Accrued 396,882 517,491 567,813 Waived -- -- -- JPMorgan Treasury Plus Money Market Fund Paid or Accrued 1,192,493 1,425,005 1,357,033 Waived -- -- -- JPMorgan Tax Free Money Market Fund Paid or Accrued 560,350 658,688 782,598 Waived -- -- --
48 DISTRIBUTION PLANS The Trust has adopted separate plans of distribution pursuant to Rule 12b-1 under the 1940 Act (a "Distribution Plan") including Distribution Plans on behalf of the Cash Management, Class B and Class C shares of the JPMorgan Prime Money Market Fund, the Investor Shares of the Money Market Funds (except the Prime Money Market Fund) and the Reserve Class Shares of the Money Market Funds, which provides that each of such classes of such Funds shall pay for distribution services a distribution fee (the "Distribution Fee"), including payments to the Distributor, at annual rates not to exceed the amounts set forth in their respective Prospectuses. The Distributor may use all or any portion of such Distribution Fee to pay for Fund expenses of printing prospectuses and reports used for sales purposes, expenses of the preparation and printing of sales literature and other such distribution-related expenses. Promotional activities for the sale of each class of shares of each Fund will be conducted generally by the JPMorgan Funds, and activities intended to promote one class of shares of a Fund may also benefit the Fund's other shares and other JPMorgan Funds. Class B and Class C shares pay a Distribution Fee of up to 0.75% of average daily net assets. The Distributor currently expects to pay sales commissions to a dealer at the time of sale of Class B shares of the Income Funds of up to 4.00% of the purchase price of the shares sold by such dealer. The Distributor will use its own funds (which may be borrowed or otherwise financed) to pay such amounts. Because the Distributor will receive a maximum Distribution Fee of 0.75% of average daily net assets with respect to Class B and Class C shares, it will take the Distributor several years to recoup the sales commissions paid to dealers and other sales expenses. No class of shares of a Fund will make payments or be liable for any distribution expenses incurred by other classes of shares of such Fund. The Institutional Shares of the Money Market Funds have no distribution plan. There is no distribution plan for Premier Shares. Some payments under the Distribution Plans may be used to compensate broker-dealers with trail or maintenance commissions in an amount not to exceed 0.25% annualized of the average net asset value of the Class B shares or 0.75% annualized of the average net asset value of Class C shares maintained in a Fund by such broker-dealers' customers. Trail or maintenance commissions will be paid to broker-dealers beginning the 13th month following the purchase of such shares. Since the distribution fees are not directly tied to expenses, the amount of distribution fees paid by a class of a Fund during any year may be more or less than actual expenses incurred pursuant to the Distribution Plans. For this reason, this type of distribution fee arrangement is characterized by the staff of the Securities and Exchange Commission as being of the "compensation variety" (in contrast to "reimbursement" arrangements by which a distributor's payments are directly linked to its expenses). With respect to Class B shares of the Income Funds, because of the 0.75% annual limitation on the compensation paid to the Distributor during a fiscal year, compensation relating to a large portion of the commissions attributable to sales of Class B shares in any one year will be accrued and paid by a Fund to the Distributor in fiscal years subsequent thereto. However, the Shares are not liable for any distribution expenses incurred in excess of the Distribution Fee paid. In determining whether to purchase Class B shares of the Income Funds, investors should consider that compensation payments could continue until the Distributor has been fully reimbursed for the commissions paid on sales of Class B shares. Each class of shares is entitled to exclusive voting rights with respect to matters concerning its Distribution Plan. 49 Each Distribution Plan provides that it will continue in effect indefinitely if such continuance is specifically approved at least annually by a vote of both a majority of the Trustees and a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust and who have no direct or indirect financial interest in the operation of the Distribution Plan or in any agreement related to such Plan ("Qualified Trustees"). The continuance of each Distribution Plan was most recently approved on October 13, 1995. Each Distribution Plan requires that the Trust shall provide to the Board of Trustees, and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended (and the purposes therefor) under the Distribution Plan. Each Distribution Plan further provides that the selection and nomination of Qualified Trustees shall be committed to the discretion of the disinterested Trustees (as defined in the 1940 Act) then in office. Each Distribution Plan may be terminated at any time by a vote of a majority of the Qualified Trustees or, with respect to a particular Fund, by vote of a majority of the outstanding voting Shares of the class of such Fund to which it applies (as defined in the 1940 Act). Each Distribution Plan may not be amended to increase materially the amount of permitted expenses thereunder without the approval of shareholders and may not be materially amended in any case without a vote of the majority of both the Trustees and the Qualified Trustees. Each of the Funds will preserve copies of any plan, agreement or report made pursuant to a Distribution Plan for a period of not less than six years from the date of the Distribution Plan, and for the first two years such copies will be preserved in an easily accessible place. For the fiscal year ended August 31, 2000, the Distributor was paid or accrued the following Distribution Fees and voluntarily waived the amounts in parentheses following such fees with respect to the Shares of each Fund:
PAID/ACCRUED WAIVED ------------ ------------- JPMorgan Prime Money Market Fund B Shares 164,175 -- C Shares 1,774 -- JPMorgan Federal Money Market Fund Investor Shares 570,156 -- JPMorgan Treasury Plus Money Market Fund Investor Shares 1,504,635 -- JPMorgan Tax Free Money Market Fund Investor Shares 842,964 --
Amounts accrued and waived with respect to Reserve Shares of the Money Market Funds were less than $1. 50 Expenses paid by the Distributor related to the distribution of Trust shares during the year ended August 31, 2000 were as follows: Advertising and sales literature $1,542,103 Printing, production and mailing of prospectuses and shareholder reports to other than current shareholders 449,922 Compensation to dealers 715,616 Compensation to sales personnel 1,834,202 B share financing charges 351,353 Equipment, supplies and other indirect distribution-related expenses 221,757
With respect to the Class B shares of the Funds, the Distribution Fee was paid to FEP Capital L.P. for acting as finance agent. DISTRIBUTION AND SUB-ADMINISTRATION AGREEMENT The Trust has entered into a Distribution and Sub-Administration Agreement dated August 24, 1995 (prior to such date, the Distributor served the Trust pursuant to a contract dated August 23, 1994 (April 15, 1994 with respect to the JPMorgan Treasury Plus Money Market Fund and JPMorgan Federal Money Market Fund)) (the "Distribution Agreement") with the Distributor, pursuant to which the Distributor acts as the Funds' exclusive underwriter, provides certain administration services and promotes and arranges for the sale of each class of Shares. The Fund's distributor is J.P. Morgan Fund Distributors, Inc. (the "Distributor"). The Distributor is a subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Distribution Agreement provides that the Distributor will bear the expenses of printing, distributing and filing prospectuses and statements of additional information and reports used for sales purposes, and of preparing and printing sales literature and advertisements not paid for by the Distribution Plans. The Trust pays for all of the expenses for qualification of the shares of each Fund for sale in connection with the public offering of such shares, and all legal expenses in connection therewith. In addition, pursuant to the Distribution Agreement, the Distributor provides certain sub-administration services to the Trust, including providing officers, clerical staff and office space. Payments may also be used to compensate broker-dealers with trail or maintenance commissions at an annual rate of up to 0.25% of the average daily net asset value of Class A or Class B shares invested in the Fund by customers of these broker-dealers. Trail or maintenance commissions are paid to broker-dealers beginning the 13th month following the purchase of shares by their customers. Promotional activities for the sale of Class A and Class B shares will be conducted generally by the JPMorgan Funds, and activities intended to promote the Fund's Class A or Class B shares may also benefit the Fund's other shares and other JPMorgan Funds. 51 The Distributor may provide promotional incentives to broker-dealers that meet specified sales targets for one or more JPMorgan Funds. These incentives may include gifts of up to $100 per person annually; an occasional meal, ticket to a sponsoring event or theater for entertainment for broker-dealers and their guests; and, payment or reimbursement for travel expenses, including lodging and meals, in connection with attendance at training and educational meetings within and outside the U.S. The Distributor may from time to time, pursuant to objective criteria established by it, pay additional compensation to qualifying authorized broker-dealers for certain services or activities which are primarily intended to result in the sale of shares of the Fund. In some instances, such compensation may be offered only to certain broker-dealers who employ registered representatives who have sold or may sell significant amounts of shares of the Fund and/or other JPMorgan Funds during a specified period of time. Such compensation does not represent an additional expense to the Fund or its shareholders, since it will be paid by the Distributor out of compensation retained by it from the Fund or other sources available to it. The Distribution Agreement is currently in effect and will continue in effect with respect to each Fund only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of such Fund's outstanding voting securities and, in either case, by a majority of the Trustees who are not parties to the Distribution Agreement or "interested persons" (as defined in the 1940 Act) of any such party. The Distribution Agreement is terminable without penalty by the Trust on behalf of each Fund on 60 days' written notice when authorized either by a majority vote of such Fund's shareholders or by vote of a majority of the Board of Trustees of the Trust, including a majority of the Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust, or by the Distributor on 60 days' written notice, and will automatically terminate in the event of its "assignment" (as defined in the 1940 Act). The Distribution Agreement also provides that neither the Distributor nor its personnel shall be liable for any act or omission in the course of, or connected with, rendering services under the Distribution Agreement, except for willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties. In the event the operating expenses of any Fund, including all investment advisory, administration and sub-administration fees, but excluding brokerage commissions and fees, taxes, interest and extraordinary expenses such as litigation, for any fiscal year exceed the most restrictive expense limitation applicable to that Fund imposed by the securities laws or regulations thereunder of any state in which the shares of such Fund are qualified for sale, as such limitations may be raised or lowered from time to time, the Distributor shall reduce its sub-administration fee with respect to such Fund (which fee is described below) to the extent of its share of such excess expenses. The amount of any such reduction to be borne by the Distributor shall be deducted from the monthly sub-administration fee otherwise payable with respect to such Fund during such fiscal year; and if such amounts should exceed the monthly fee, the Distributor shall pay to such Fund its share of such excess expenses no later than the last day of the first month of the next succeeding fiscal year. In consideration of the sub-administration services provided by the Distributor pursuant to the Distribution Agreement, the Distributor receives an annual fee, payable monthly, of 0.05% of the net assets of each Fund. The Distributor may voluntarily agree to from time to time waive a portion of the fees payable to it under the Distribution Agreement with respect to each Fund on a month-to-month basis. For the three most recent 52 fiscal years, the Distributor was paid or accrued the following sub-administration fees under the Distribution Agreement, and voluntarily waived the amounts in parentheses following such fees:
FISCAL YEAR- FISCAL YEAR- FISCAL YEAR- ENDED ENDED ENDED FUND 8/31/98 8/31/99 8/31/00 - ---- ------------ ------------- ------------- JPMorgan Prime Money Market Fund Paid or Accrued 1,855,708 3,884,607 5,316,298 Waived -- -- (103,182) JPMorgan Federal Money Market Fund Paid or Accrued 396,882 517,491 567,813 Waived -- -- -- JPMorgan Treasury Plus Money Market Fund Paid or Accrued 1,192,493 1,425,005 1,357,033 Waived (771,344) (883,470) (1,085,630) JPMorgan Tax Free Money Market Fund Paid or Accrued 560,350 658,688 782,433 Waived -- (93,598) (369,133)
53 SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN The Trust has entered into a shareholder servicing agreement (a "Servicing Agreement") with each Shareholder Servicing Agent to provide certain services including but not limited to the following: answer customer inquiries regarding account status and history, the manner in which purchases and redemptions of shares may be effected for the Fund as to which the Shareholder Servicing Agent is so acting and certain other matters pertaining to the Fund; assist shareholders in designating and changing dividend options, account designations and addresses; provide necessary personnel and facilities to establish and maintain shareholder accounts and records; assist in processing purchase and redemption transactions; arrange for the wiring of funds; transmit and receive funds in connection with customer orders to purchase or redeem shares; verify and guarantee shareholder signatures in connection with redemption orders and transfers and changes in shareholder-designated accounts; furnish (either separately or on an integrated basis with other reports sent to a shareholder by a Shareholder Servicing Agent) quarterly and year-end statements and confirmations of purchases and redemptions; transmit, on behalf of the Fund, proxy statements, annual reports, updated prospectuses and other communications to shareholders of the Fund; receive, tabulate and transmit to the Fund proxies executed by shareholders with respect to meetings of shareholders of the Fund; and provide such other related services as the Fund or a shareholder may request. Shareholder servicing agents may be required to register pursuant to state securities law. Shareholder Servicing Agents may subcontract with other parties for the provision of shareholder support services. Each Shareholder Servicing Agent may voluntarily agree from time to time to waive a portion of the fees payable to it under its Servicing Agreement with respect to each Fund on a month-to-month basis. Fees payable to the Shareholder Servicing Agents (all of which currently are related parties) and the amounts voluntarily waived (in parenthesis) for the three most recent fiscal years, were as follows:
FISCAL YEAR FISCAL YEAR FISCAL YEAR ENDED ENDED ENDED 8/31/98 8/31/99 8/31/00 PAID/ACCRUED WAIVED PAID/ACCRUED WAIVED PAID/ACCRUED WAIVED ------------ ------ ------------ ------ ------------ ------ JPMorgan Prime Money Market Fund Investor Shares -- -- 380,370 (138,642) 3,672,170 (181,026) Premier Shares 1,790,841 (437,878) 2,457,774 (408,608) 3,322,475 (496,433) Institutional Shares -- -- 5,798,758 (4,615,353) 8,233,800 (5,797,649) B Shares 33,276 (33,276) 58,849 (47,684) 54,111 (3,687) C Shares -- -- 471 -- 1,186 --
54
FISCAL YEAR FISCAL YEAR FISCAL YEAR ENDED ENDED ENDED 8/31/98 8/31/99 8/31/00 PAID/ACCRUED WAIVED PAID/ACCRUED WAIVED PAID/ACCRUED WAIVED ------------ ------ ------------ ------ ------------ ------ JPMorgan Federal Money Market Fund Investor Shares $1,037,279 $ (417,602) $1,661,050 $ (363,304) $1,995,816 $ (279,759) Premier Shares 786,613 (26,504) 713,973 -- 698,787 -- Institutional Shares -- -- 234,161 (206,517) 285,881 (206,476) JPMorgan Treasury Plus Money Market Fund Investor Shares 5,711,537 (1,344,998) 5,373,186 (1,078,231) 5,266,231 (1,163,606) Premier Shares 490,819 -- 620,423 (30,514) 844,514 (61,629) Institutional Shares -- -- 898,550 (437,527) 871,627 (542,937) JPMorgan Tax Free Money Market Fund Investor Shares 2,400,200 (873,791) 2,746,672 (1,000,326) 2,950,422 (1,084,670) Premier Shares 287,238 -- 298,470 (10,480) 338,669 (8,841) Institutional Shares -- -- 345,784 (343,502) 586,427 (583,598)
Amounts accrued and waived with respect to Reserve Shares of the Money Market Funds were less than $1. Shareholder servicing agents may offer additional services to their customers, including specialized procedures and payment for the purchase and redemption of Fund shares, such as pre-authorized or systematic purchase and redemption programs, "sweep" programs, cash advances and redemption checks. Each Shareholder Servicing Agent may establish its own terms and conditions, including limitations on the amounts of subsequent transactions, with respect to such services. Certain Shareholder Servicing Agents may (although they are not required by the Trust to do so) credit to the accounts of their customers from whom they are already receiving other fees amounts not exceeding such other fees or the fees for their services as Shareholder Servicing Agents. For shareholders that bank with Chase, Chase may aggregate investments in the JPMorgan Funds with balances held in Chase bank accounts for purposes of determining eligibility for certain bank privileges that are based on specified minimum balance requirements, such as reduced or no fees for certain banking services or preferred rates on loans and deposits. Chase and certain broker-dealers and other Shareholder Servicing Agents may, at their own expense, provide gifts, such as computer software packages, guides and books related to investment or additional Fund shares valued up to $250 to their customers that invest in the JPMorgan Funds. 55 Chase and/or the Distributor may from time to time, at their own expense out of compensation retained by them from the Fund or other sources available to them, make additional payments to certain selected dealers or other Shareholder Servicing Agents for performing administrative services for their customers. These services include maintaining account records, processing orders to purchase, redeem and exchange Fund shares and responding to certain customer inquiries. The amount of such compensation may be up to an additional 0.10% annually of the average net assets of the Fund attributable to shares if the Fund held by customers of such Shareholder Servicing Agents. Such compensation does not represent an additional expense to the Fund or its shareholders, since it will be paid by Chase andor the Distributor. The Trust has also entered into a Transfer Agency Agreement with DST Systems, Inc. ("DST") pursuant to which DST acts as transfer agent for the Trust. DST's address is 210 West 10th Street, Kansas City, MO 64105. Pursuant to a Custodian Agreement, Chase acts as the custodian of the assets of each Fund for which Chase receives such compensation as is from time to time agreed upon by the Trust and Chase. As custodian, Chase provides oversight and record keeping for the assets held in the portfolios of each Fund. Chase also provides fund accounting services for the income, expenses and shares outstanding for the Funds. Chase is located at 3 Metrotech Center, Brooklyn, NY 11245. For additional information, see the Prospectuses. INDEPENDENT ACCOUNTANTS The financial statements incorporated herein by reference from the Trust's Annual Reports to Shareholders for the fiscal year ended August 31, 2000, and the related financial highlights which appear in the Prospectuses, have been incorporated herein and included in the Prospectuses in reliance on the reports of PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York 10036, independent accountants of the Funds, given on the authority of said firm as experts in accounting and auditing. PricewaterhouseCoopers LLP provides the Funds with audit services, tax return preparation and assistance and consultation with respect to the preparation of filings with the Securities and Exchange Commission. CERTAIN REGULATORY MATTERS Chase and its affiliates may have deposit, loan and other commercial banking relationships with the issuers of securities purchased on behalf of any of the Funds, including outstanding loans to such issuers which may be repaid in whole or in part with the proceeds of securities so purchased. Chase and its affiliates deal, trade and invest for their own accounts in U.S. Government obligations, municipal obligations and commercial paper and are among the leading dealers of various types of U.S. Government obligations and municipal obligations. Chase and its affiliates may sell U.S. Government obligations and municipal obligations to, and purchase them from, other investment companies sponsored by the Funds' distributor or affiliates of the distributor. Chase will not invest any Fund assets in any U.S. Government obligations, municipal obligations or commercial paper purchased from itself or any affiliate, although under certain circumstances such securities may be purchased from other members of an underwriting syndicate in which Chase or an affiliate is a non-principal member. This restriction my limit the amount or type of U.S. Government obligations, municipal obligations or commercial paper available to be purchased by any Fund. Chase has informed the Funds that in making its investment decision, it does not obtain or use material inside information in the possession of any other division or department of Chase, including the division that performs services for the Trust as custodian, or in the possession of any affiliate of Chase. Shareholders of the Funds should be aware that, subject to applicable legal or regulatory restrictions, Chase and its affiliates may exchange among themselves certain information about the shareholder and his account. Transactions with affiliated broker-dealers will only be executed on an agency basis in accordance with applicable federal regulations. 56 GENERAL INFORMATION EXPENSES Each Fund pays the expenses incurred in its operations, including its pro rata share of expenses of the Trust. These expenses include investment advisory and administrative fees; the compensation of the Trustees; registration fees; interest charges; taxes; expenses connected with the execution, recording and settlement of security transactions; fees and expenses of the Funds' custodian for all services to the funds, including safekeeping of funds and securities and maintaining required books and accounts; expenses of preparing and mailing reports to investors and to government offices and commissions; expenses of meetings of investors; fees and expenses of independent accountants, of legal counsel and of any transfer agent, registrar or dividend disbursing agent of the Trust; insurance premiums; and expenses of calculating the net asset value of, and the net income on, shares of the Funds. Shareholder servicing and distribution fees are all allocated to specific classes of the Funds. In addition, the Funds may allocate transfer agency and certain other expenses by class. Service providers to a Fund may, from time to time, voluntarily waive all or a portion of any fees to which they are entitled. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES Mutual Fund Trust is an open-end, management investment company organized as Massachusetts business trust under the laws of the Commonwealth of Massachusetts on February 4, 1994. Because certain of the Funds comprising the Trust are "non-diversified", more than 5% of any of the assets of any such Fund may be invested in the obligations of any single issuer, which may make the value of the shares in such a Fund more susceptible to certain risks than shares of a diversified mutual fund. The fiscal year-end of the Funds in the Trust is August 31. The Trust currently consists of series of shares of beneficial interest, par value $.001 per share. With respect to the Money Market Funds, the Trust may offer more than one class of shares. The Trust has reserved the right to create and issue additional series or classes. Each share of a series or class represents an equal proportionate interest in that series or class with each other share of that series or class. The shares of each series or class participate equally in the earnings, dividends and assets of the particular series or class. Expenses of the Trust which are not attributable to a specific series or class are allocated amount all the series in a manner believed by management of the Trust to be fair and equitable. Shares have no pre-emptive or conversion rights. Shares when issued are fully paid and non-assessable, except as set forth below. Shareholders are entitled to one vote for each whole share held, and each fractional share shall be entitled to a proportionate fractional vote, except that Trust shares held in the treasury of the Trust shall not be voted. Shares of each series or class generally vote together, except when required under federal securities laws to vote separately on matters that may affect a particular class, such as the approval of distribution plans for a particular class. With respect to shares purchased through a Shareholder Servicing Agent and, in the event written proxy instructions are not received by a Fund or its designated agent prior to a shareholder meeting at which a proxy is to be voted and the shareholder does not attend the meeting in person, the Shareholder Servicing Agent for such shareholder will be authorized pursuant to an applicable agreement with the shareholder to vote the shareholder's outstanding shares in the same proportion as the votes cast by other Fund shareholders represented at the meeting in person or by proxy. The categories of investors that are eligible to purchase shares and minimum investment requirements may differ for each class of the Funds' shares. In addition, other classes of Fund shares may be subject to differences in sales charge arrangements, ongoing distribution and service fee levels, and levels of certain other expenses, which will affect the relative performance of the different classes. Investors may call 1-800-622-4273 to obtain additional information about other classes of shares of the Funds that are offered. Any person entitled to receive compensation for selling or servicing shares of a Fund may receive different levels of compensation with respect to one class of shares over another. 57 Shareholders of the Morgan Shares, Premier Shares, Reserve Shares and Institutional Shares of the Money Market Funds bear the fees and expenses described herein and in the Prospectuses. The fees paid by the Morgan Shares to the Distributor and Shareholder Servicing Agent under the distribution plans and shareholder servicing arrangements for distribution expenses and shareholder services provided to investors by the Distributor and Shareholder Servicing Agents, absent waivers, generally are more than the respective fees paid under distribution plans and shareholder servicing arrangements adopted for the Premier Shares. The Institutional Shares pay no distribution or Shareholder Servicing fee. As a result, absent waivers, at any given time, the net yield on the Morgan Shares will be lower than the yield on the Premier Shares and the yield on the Premier Shares will be lower than the yield on Institutional Shares. Standardized yield quotations will be computed separately for each class of shares of a Fund. The Prime Money Market Fund offers both Class B and Class C shares. The classes of shares have different attributes relating to sales charges and expenses as described in the Prospectus. The relative impact of contingent deferred sales charges will depend upon the length of time a share is held. Selected dealers and financial consultants may receive different levels of compensation for selling one particular class of shares rather than another. The business and affairs of the Trust are managed under the general direction and supervision of the Trust's Board of Trustees. The Trust is not required to hold annual meetings of shareholders but will hold special meetings of shareholders of a series or class when, in the judgment of the Trustees, it is necessary or desirable to submit matters for a shareholder vote. Shareholders have, under certain circumstances, the right to communicate with other shareholders in connection with requesting a meeting of shareholders for the purpose of removing one or more Trustees. Shareholders also have, in certain circumstances, the right to remove one or more Trustees without a meeting. No material amendment may be made to the Trust's Declaration of Trust without the affirmative vote of the holders of a majority of the outstanding shares of each portfolio affected by the amendment. The Trust's Declaration of Trust provides that, at any meeting of shareholders of the Trust or of any series or class, a Shareholder Servicing Agent may vote any shares as to which such Shareholder Servicing Agent is the agent of record and which are not represented in person or by proxy at the meeting, proportionately in accordance with the votes cast by holders of all shares of that portfolio otherwise represented at the meeting in person or by proxy as to which such Shareholder Servicing Agent is the agent of record. Any shares so voted by a Shareholder Servicing Agent will be deemed represented at the meeting for purposes of quorum requirements. Shares have no preemptive or conversion rights. Shares, when issued, are fully paid and non-assessable, except as set forth below. Any series or class may be terminated (i) upon the merger or consolidation with, or the sale or disposition of all or substantially all of its assets to, another entity, if approved by the vote of the holders of two-thirds of its outstanding shares, except that if the Board of Trustees recommends such merger, consolidation or sale or disposition of assets, the approval by vote of the holders of a majority of the series' or class' outstanding shares will be sufficient, or (ii) by the vote of the holders of a majority of its outstanding shares, or (iii) by the Board of Trustees by written notice to the series' or class' shareholders. Unless each series and class is so terminated, the Trust will continue indefinitely. Certificates are issued only upon the written request of a shareholder, subject to the policies of the investor's Shareholder Servicing Agent, but the Trust will not issue a stock certificate with respect to shares 58 that may be redeemed through expedited or automated procedures established by a Shareholder Servicing Agent. No certificates are issued for shares of the Money Market Funds. Under Massachusetts law, shareholders of a business trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the Trust's Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and provides for indemnification and reimbursement of expenses out of the Trust property for any shareholder held personally liable for the obligations of the Trust. The Trust's Declaration of Trust also provides that the Trust shall maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of the Trust, its shareholders, Trustees, officers, employees and agents covering possible tort and other liabilities. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust itself was unable to meet its obligations. The Trust's Declaration of Trust further provides that obligations of the Trust are not binding upon the Trustees individually but only upon the property of the Trust and that the Trustees will not be liable for any action or failure to act, errors of judgment or mistakes of fact or law, but nothing in the Declaration of Trust protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. The Board of Trustees has adopted a code of ethics addressing personal securities transactions by investment personnel and access persons and other related matters. The code has been designated to address potential conflicts of interest that can arise in connection with personal trading activities of such persons. Persons subject to the code are generally permitted to engage in personal securities transactions, subject to certain prohibitions, pre-clearance requirements and blackout periods. 59 FINANCIAL STATEMENTS The Annual Report and Semi-Annual Report to Shareholders of each Fund including the reports of independent accountants, financial highlights and financial statements for the fiscal year ended August 31, 2000 and the period ended February 28, 2001, respectively, contained therein, are incorporated herein by reference. SPECIMEN COMPUTATIONS OF OFFERING PRICES PER SHARE The Shares of the Money Market Funds are offered for sale at Net Asset Value. 60 APPENDIX A DESCRIPTION OF CERTAIN OBLIGATIONS ISSUED OR GUARANTEED BY U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES FEDERAL FARM CREDIT SYSTEM NOTES AND BONDS--are bonds issued by a cooperatively owned nationwide system of banks and associations supervised by the Farm Credit Administration, an independent agency of the U.S. Government. These bonds are not guaranteed by the U.S. Government. MARITIME ADMINISTRATION BONDS--are bonds issued and provided by the Department of Transportation of the U.S. Government and are guaranteed by the U.S. Government. FNMA BONDS--are bonds guaranteed by the Federal National Mortgage Association. These bonds are not guaranteed by the U.S. Government. FHA DEBENTURES--are debentures issued by the Federal Housing Administration of the U.S. Government and are guaranteed by the U.S. Government. FHA INSURED NOTES--are bonds issued by the Farmers Home Administration of the U.S. Government and are guaranteed by the U.S. Government. GNMA CERTIFICATES--are mortgage-backed securities which represent a partial ownership interest in a pool of mortgage loans issued by lenders such as mortgage bankers, commercial banks and savings and loan associations. Each mortgage loan included in the pool is either insured by the Federal Housing Administration or guaranteed by the Veterans Administration and therefore guaranteed by the U.S. Government. As a consequence of the fees paid to GNMA and the issuer of GNMA Certificates, the coupon rate of interest of GNMA Certificates is lower than the interest paid on the VA-guaranteed or FHA-insured mortgages underlying the Certificates. The average life of a GNMA Certificate is likely to be substantially less than the original maturity of the mortgage pools underlying the securities. Prepayments of principal by mortgagors and mortgage foreclosures may result in the return of the greater part of principal invested far in advance of the maturity of the mortgages in the pool. Foreclosures impose no risk to principal investment because of the GNMA guarantee. As the prepayment rate of individual mortgage pools will vary widely, it is not possible to accurately predict the average life of a particular issue of GNMA Certificates. The yield which will be earned on GNMA Certificates may vary form their coupon rates for the following reasons: (i) Certificates may be issued at a premium or discount, rather than at par; (ii) Certificates may trade in the secondary market at a premium or discount after issuance; (iii) interest is earned and compounded monthly which has the effect of raising the effective yield earned on the Certificates; and (iv) the actual yield of each Certificate is affected by the prepayment of mortgages included in the mortgage pool underlying the Certificates. Principal which is so prepaid will be reinvested, although possibly at a lower rate. In addition, prepayment of mortgages included in the mortgage pool underlying a GNMA Certificate purchased at a premium could result in a loss to a Fund. Due to the large amount of GNMA Certificates outstanding and active participation in the secondary market by securities dealers and investors, GNMA Certificates are highly liquid instruments. Prices of GNMA Certificates are readily available from securities dealers and depend on, among other things, the level of market rates, the Certificate's coupon rate and the prepayment experience of the pool of mortgages backing each Certificate. If agency securities are purchased at a premium above principal, the premium is not guaranteed by the issuing agency and a decline in the market value to par may result in a loss of the premium, which may be particularly likely in the event of a prepayment. When and if available, U.S. Government obligations may be purchased at a discount from face value. FHLMC CERTIFICATES AND FNMA CERTIFICATES--are mortgage-backed bonds issued by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, respectively, and are guaranteed by the U.S. Government. GSA PARTICIPATION CERTIFICATES--are participation certificates issued by the General Services Administration of the U.S. Government and are guaranteed by the U.S. Government. A-1 NEW COMMUNITIES DEBENTURES--are debentures issued in accordance with the provisions of Title IV of the Housing and Urban Development Act of 1968, as supplemented and extended by Title VII of the Housing and Urban Development Act of 1970, the payment of which is guaranteed by the U.S. Government. PUBLIC HOUSING BONDS--are bonds issued by public housing and urban renewal agencies in connection with programs administered by the Department of Housing and Urban Development of the U.S. Government, the payment of which is secured by the U.S. Government. PENN CENTRAL TRANSPORTATION CERTIFICATES--are certificates issued by Penn Central Transportation and guaranteed by the U.S. Government. SBA DEBENTURES--are debentures fully guaranteed as to principal and interest by the Small Business Administration of the U.S. Government. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY BONDS--are bonds issued by the Washington Metropolitan Area Transit Authority. Some of the bonds issued prior to 1993 are guaranteed by the U.S. Government. FHLMC BONDS--are bonds issued and guaranteed by the Federal Home Loan Mortgage Corporation. These bonds are not guaranteed by the U.S. Government. FEDERAL HOME LOAN BANK NOTES AND BONDS--are notes and bonds issued by the Federal Home Loan Bank System and are not guaranteed by the U.S. Government. STUDENT LOAN MARKETING ASSOCIATION ("Sallie Mae") Notes and Bonds--are notes and bonds issued by the Student Loan Marketing Association and are not guaranteed by the U.S. Government. D.C. ARMORY BOARD BONDS--are bonds issued by the District of Columbia Armory Board and are guaranteed by the U.S. Government. EXPORT-IMPORT BANK CERTIFICATES--are certificates of beneficial interest and participation certificates issued and guaranteed by the Export-Import Bank of the U.S. and are guaranteed by the U.S. Government. In the case of securities not backed by the "full faith and credit" of the U.S. Government, the investor must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assert a claim against the U.S. Government itself in the event the agency or instrumentality does not meet its commitments. Investments may also be made in obligations of U.S. Government agencies or instrumentalities other than those listed above. A-2 APPENDIX B DESCRIPTION OF RATINGS* The ratings of Moody's and Standard & Poor's represent their opinions as to the quality of various Municipal Obligations. It should be emphasized, however, that ratings are not absolute standards of quality. Consequently, Municipal Obligations with the same maturity, coupon and rating may have different yields while Municipal Obligations of the same maturity and coupon with different ratings may have the same yield. DESCRIPTION OF MOODY'S FOUR HIGHEST MUNICIPAL BOND RATINGS Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa--Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities, or fluctuation of protective elements may be of greater amplitude, or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A--Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa--Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. DESCRIPTION OF MOODY'S THREE HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES Moody's ratings for state and municipal short-term obligations will be designated Moody's Investment Grade ("MIG"). Such ratings recognize the differences between short-term credit risk and long-term risk. Factors affecting the liquidity of the borrower and short-term cyclical elements are critical in short-term ratings, while other factors of major importance in bond risk, long-term secular trends for example, may be less important over the short run. A short-term rating may also be assigned on an issue having a demand feature-variable rate demand obligation or commercial paper programs; such ratings will be designated as "VMIG." Short-term ratings on issues with demand features are differentiated by the use of the VMIG symbol to reflect such characteristics as payment upon periodic demand rather than fixed maturity dates and payment relying on external liquidity. Symbols used are as follows: MIG-1/VMIG-1--Notes bearing this designation are of the best quality, enjoying strong protection from established cash flows of funds for their servicing or from established and broad-based access to the market for refinancing, or both. MIG-2/VMIG-2--Notes bearing this designation are of high quality, with margins of protection ample although not so large as in the preceding group. MIG-3/VMIG-3--Notes bearing this designation are of favorable quality, where all security elements are accounted for but there is lacking the undeniable strength of the preceding grade, liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well established. - -------------- * As described by the rating agencies. Ratings are generally given to securities at the time of issuance. While the rating agencies may from time to time revise such ratings, they undertake no obligation to do so. B-1 DESCRIPTION OF STANDARD & POOR'S FOUR HIGHEST MUNICIPAL BOND RATINGS AAA--Bonds rated AAA have the highest rating assigned by Standard & Poor's. Capacity to pay interest and repay principal is extremely strong. AA--Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in small degree. A--Bonds rated A have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB--Bonds rated BBB are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES AND TAX-EXEMPT DEMAND BONDS A Standard & Poor's note rating reflects the liquidity concerns and market access risks unique to notes. Notes due in 3 years or less will likely receive a note rating. Notes maturing beyond 3 years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment. --Amortization schedule (the larger the final maturity relative to other maturities the more likely it will be treated as a note). --Source of Payment (the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note). Note rating symbols are as follows: SP-1--Very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. SP-2--Satisfactory capacity to pay principal and interest. SP-3--Speculative capacity to pay principal and interest. Standard & Poor's assigns "dual" ratings to all long-term debt issues that have as part of their provisions a demand or double feature. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols are used to denote the put option (for example, "AAA/B-1+"). For the newer "demand notes," S&P's note rating symbols, combined with the commercial paper symbols, are used (for example, "SP-1+/A-1+"). DESCRIPTION OF STANDARD & POOR'S TWO HIGHEST COMMERCIAL PAPER RATINGS A Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. Issues in this category are delineated with the numbers 1, 2 and 3 to indicate the relative degree of safety. B-1--This designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics will be denoted with a plus (+) sign designation. A-2--Capacity for timely payment on issues with this designation is strong. However, the relative degree of safety is not as high as for issues designated A-1. B-2 DESCRIPTION OF MOODY'S TWO HIGHEST COMMERCIAL PAPER RATINGS Moody's Commercial Paper ratings are opinions of the ability of issuers to repay punctually promissory obligations not having an original maturity in excess of nine months. Moody's employs three designations, all judged to be investment grade, to indicate the relative repayment capacity of rated issuers: Prime-1, Prime-2 and Prime-3. Issuers rated Prime-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: (1) leading market positions in well-established industries; (2) high rates of return on funds employed; (3) conservative capitalization structures with moderate reliance on debt and ample asset protection; (4) broad margins in earnings coverage of fixed financial charges and high internal cash generation; and (5) well-established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. DESCRIPTION OF FITCH'S RATINGS OF MUNICIPAL NOTES AND TAX-EXEMPT DEMAND BONDS MUNICIPAL BOND RATINGS The ratings represent Fitch's assessment of the issuer's ability to meet the obligations of a specific debt issue or class of debt. The ratings take into consideration special features of the issuer, its relationship to other obligations of the issuer, the current financial condition and operative performance of the issuer and of any guarantor, as well as the political and economic environment that might affect the issuer's financial strength and credit quality. AAA--Bonds rated AAA are considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events. AA--Bonds rated AA are considered to be investment grade and of very high credit quality. The obligor's ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated F-1. A--Bonds rated A are considered to be investment grade and of high credit quality. The obligor's ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstance than bonds with higher ratings. BBB--Bonds rated BBB are considered to be investment grade and of satisfactory credit quality. The obligor's ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse consequences on these bonds, and therefore impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings. Plus and minus signs are used by Fitch to indicate the relative position of credit within a rating category. Plus and minus signs, however, are not used in the AAA category. SHORT-TERM RATINGS Fitch's short-term ratings apply to debt obligations that are payable on demand or have original maturities of up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes. B-3 Although the credit analysis is similar to Fitch's bond rating analysis, the short-term rating places greater emphasis than bond ratings on the existence of liquidity necessary to meet the issuer's obligations in a timely manner. F-1+--Exceptionally Strong Credit Quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1--Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated F-1+. F-2--Good Credit Quality. Issues carrying this rating have satisfactory degree of assurance for timely payments, but the margin of safety is not as great as the F-1+ and F-1 categories. F-3--Fair Credit Quality. Issues assigned this rating have characteristics suggesting that the degree of assurance for timely payment is adequate, although near-term adverse changes could cause these securities to be rated below investment grade. B-4 EX-99.17(G) 5 a2047272zex-99_17g.txt EXH 99.17(G) SEMI-ANNUAL REPORT-SURVIVOR Semi-Annual Report February 28, 2001 (unaudited) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- JPMorgan Money Market Funds 100% U.S. Treasury Securities Money Market Fund U.S. Government Money Market Fund Treasury Plus Money Market Fund Federal Money Market Fund II Prime Money Market Fund II Tax Free Money Market Fund New York Tax Free Money Market Fund California Tax Free Money Market Fund [LOGO] JPMorgan Fleming Asset Management Contents Letter to the Shareholders ................................................ 1 JPMorgan 100% U.S. Treasury Securities Money Market Fund Fund Facts ................................................................ 2 JPMorgan U.S. Government Money Market Fund Fund Facts ................................................................ 3 JPMorgan Treasury Plus Money Market Fund Fund Facts ................................................................ 4 JPMorgan Federal Money Market Fund II Fund Facts ................................................................ 5 JPMorgan Prime Money Market Fund II Fund Facts ................................................................ 6 JPMorgan Tax Free Money Market Fund Fund Facts ................................................................ 7 JPMorgan New York Tax Free Money Market Fund Fund Facts ................................................................ 8 JPMorgan California Tax Free Money Market Fund Fund Facts ................................................................ 9 Portfolios of Investments ................................................. 10 Financial Statements ...................................................... 63 Notes to Financial Statements ............................................. 72 Highlights o The U.S. economy slowed dramatically during the reporting period, with GDP growth in the fourth quarter of 2000 slipping to a tepid 1.1%. o After six interest rate increases beginning in June 1999, the Fed Funds rate stood at 6.50% through most of the reporting period. o The Federal Open Markets Committee (FOMC) changed course and made an inter-meeting cut in the Federal Funds rate of .50% on January 3, 2001. It acted again at its late-January meeting, cutting the Fed Funds rate by another .50%. ------------------------------------------------------- NOT FDIC INSURED | May lose value / No bank guarantee ------------------------------------------------------- JPMorgan Funds are distributed by J.P. Morgan Fund Distributors, Inc. - -------------------------------------------------------------------------------- JPMorgan Money Market Funds LETTER TO THE SHAREHOLDERS April 9, 2001 Dear Shareholder: We are pleased to present this semi-annual report for the JPMorgan Money Market Funds for the six months ended February 28, 2001. As you are aware, a historic merger was completed on December 31, 2000 between J.P. Morgan and Chase Manhattan, creating J.P. Morgan Chase & Co. In an effort to give a common name to the mutual funds that draw upon the outstanding resources of the combined entity, your Fund's Trustees approved the proposal to rename your Funds on February 28, 2001 as the JPMorgan Funds. Please be assured of our commitment to you, and know that the investment objectives and the account privileges of your Fund will remain unchanged. Inside you'll find in-depth information on each of the money market funds, including holdings and maturity structure. As Economy Slows, Fixed Income Securities Rise As the reporting period began in September, the formerly red-hot U.S. economy was showing definite signs of slowing following a series of interest rate increases by the Federal Reserve Board that began in June 1999. While the country was focused on the Presidential election campaign and post-election drama, the slowdown accelerated and broadened much faster than was anticipated by most economists and market analysts. As 2000 drew to a close, concerns grew that the desired soft landing for the economy may give way to a harder landing, perhaps even a recession. In fact, the monthly National Association of Purchasing Managers (NAPM) readings fell to levels that signaled recession in the final months of 2000. In response to this and other weak data, the Federal Reserve moved to a bias towards lowering short-term interest rates and then made an unexpected cut of .50% in the Federal Funds rate on January 3, 2001. The Fed moved again with a .50% cut at its regular end of January meeting. A Hard Landing? As consumer confidence began falling, expectations rose that the Fed would act again before its March meeting. However, mixed economic signals began to arrive, showing strength in key areas such as housing, automobiles and retail. This caused a great deal of uncertainty in the fixed income markets as investors began to question whether the Fed had gotten behind in its work of creating the desired soft landing. By waiting until the regular March meeting, Mr. Greenspan and his colleagues at the Fed showed that they are taking a deliberate approach in cutting rates. In our view, this approach does not obscure the fact that the Fed is in the midst of a multi-step easing process which should continue into the summer and perhaps throughout 2001. Overall, we believe that the odds of a hard landing have increased to the point that they're now even with those of a soft landing. In this environment, our fixed income team will continue to focus on preservation of principal first and foremost while attempting to lock in the highest possible yields given the falling-rate backdrop. New Resources, Same Commitment On behalf of the thousands of professionals working on your behalf, I thank you for the trust you have placed in us over the years and welcome you to the JPMorgan Funds. We look forward to serving your investment needs for many years to come. Sincerely yours, /s/ George Gatch George Gatch Managing Director 1 - -------------------------------------------------------------------------------- JPMorgan 100% U.S. Treasury Securities Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current income consistent with capital preservation - -------------------------------------------------------------------------------- Primary investments Direct obligations of the U.S. Treasury including Treasury bills, bonds and notes - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier and Institutional Shares - -------------------------------------------------------------------------------- Net assets $5.6 Billion - -------------------------------------------------------------------------------- Average maturity 61 days - -------------------------------------------------------------------------------- S&P Rating Not Rated - -------------------------------------------------------------------------------- Moody's Rating Not Rated - -------------------------------------------------------------------------------- NAIC Rating Not Rated - -------------------------------------------------------------------------------- MATURITY SCHEDULE ---------------------------------------------- 1-14 days 0.00% ---------------------------------------------- 15-30 days 16.04% ---------------------------------------------- 31-60 days 41.53% ---------------------------------------------- 61-90 days 34.74% ---------------------------------------------- 91-180 days 7.69% ---------------------------------------------- 181-270 days 0.00% ---------------------------------------------- 271+ days 0.00% ---------------------------------------------- 7-DAY SEC YIELD(1) ---------------------------------------------- Vista Shares 4.81% ---------------------------------------------- Premier Shares 4.92% ---------------------------------------------- Institutional Shares 5.15% ---------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares, Premier Shares and Institutional Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 4.69%, 4.88% and 5.05% for Vista Shares, Premier Shares and Institutional Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce the fund's performance. 2 - -------------------------------------------------------------------------------- JPMorgan U.S. Government Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current income consistent with capital preservation - -------------------------------------------------------------------------------- Primary investments Direct obligations of the U.S. Treasury and its Agencies including Treasury bills, bonds, notes and repurchase agreements - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier and Institutional Shares - -------------------------------------------------------------------------------- Net assets $8.7 Billion - -------------------------------------------------------------------------------- Average maturity 41 days - -------------------------------------------------------------------------------- S&P Rating* AAA - -------------------------------------------------------------------------------- Moody's Rating* Aaa - -------------------------------------------------------------------------------- NAIC Rating* Class 1 - -------------------------------------------------------------------------------- * This rating is historical and is based upon the Fund's credit quality, market price exposure and management. It signifies that the Fund's safety is excellent and that it has superior capacity to maintain a $1 Net Asset Value per share. The National Association of Insurance Commissioners' (NAIC's) Class 1 status indicates that the Fund meets certain pricing and quality guidelines. MATURITY SCHEDULE --------------------------------------------- 1-14 days 75.92% --------------------------------------------- 15-30 days 1.69% --------------------------------------------- 31-60 days 2.85% --------------------------------------------- 61-90 days 1.67% --------------------------------------------- 91-180 days 11.44% --------------------------------------------- 181-270 days 0.00% --------------------------------------------- 271+ days 6.43% --------------------------------------------- 7-DAY SEC YIELD(1) --------------------------------------------- Vista Shares 5.06% --------------------------------------------- Premier Shares 5.20% --------------------------------------------- Institutional Shares 5.39% --------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares, Premier Shares and Institutional Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 4.96%, 5.07% and 5.33% for Vista Shares, Premier Shares and Institutional Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce the fund's performance. 3 - -------------------------------------------------------------------------------- JPMorgan Treasury Plus Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current income consistent with capital preservation - -------------------------------------------------------------------------------- Primary investments Direct obligations of the U.S. Treasury includ ing Treasury bills, bonds and notes as well as repurchase agreements which are fully collateralized by obligations issued or guaranteed by the U.S. Treasury - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier and Institutional Shares - -------------------------------------------------------------------------------- Net assets $2.8 Billion - -------------------------------------------------------------------------------- Average maturity 23 days - -------------------------------------------------------------------------------- S&P Rating* AAA - -------------------------------------------------------------------------------- Moody's Rating* Aaa - -------------------------------------------------------------------------------- NAIC Rating* Exempt - -------------------------------------------------------------------------------- * This rating is historical and is based upon the Fund's credit quality, market price exposure and management. It signifies that the Fund's safety is excellent and that it has superior capacity to maintain a $1 Net Asset Value per share. The National Association of Insurance Commissioners' (NAIC's) "exempt" status indicates that the Fund meets certain pricing and quality guidelines. MATURITY SCHEDULE --------------------------------------------- 1-14 days 56.05% --------------------------------------------- 15-30 days 7.05% --------------------------------------------- 31-60 days 22.88% --------------------------------------------- 61-90 days 14.02% --------------------------------------------- 91-180 days 0.00% --------------------------------------------- 181-270 days 0.00% --------------------------------------------- 271+ days 0.00% --------------------------------------------- 7-DAY SEC YIELD(1) --------------------------------------------- Vista Shares 4.72% --------------------------------------------- Premier Shares 4.86% --------------------------------------------- Institutional Shares 5.06% --------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares, Premier Shares and Institutional Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 4.61%, 4.81% and 4.97% for Vista Shares, Premier Shares and Institutional Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce the fund's performance. 4 - -------------------------------------------------------------------------------- JPMorgan Federal Money Market Fund II As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current income consistent with capital preservation - -------------------------------------------------------------------------------- Primary investments Direct obligations of the U.S. Treasury including Treasury bills, bonds and notes as well as obligations issued or guaranteed by the U.S. Treasury and its Agencies - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier, Institutional and Reserve Shares - -------------------------------------------------------------------------------- Net assets $1.9 Billion - -------------------------------------------------------------------------------- Average maturity 57 days - -------------------------------------------------------------------------------- S&P Rating Not Rated - -------------------------------------------------------------------------------- Moody's Rating Not Rated - -------------------------------------------------------------------------------- NAIC Rating Not Rated - -------------------------------------------------------------------------------- MATURITY SCHEDULE --------------------------------------------- 1-14 days 53.87% --------------------------------------------- 15-30 days 3.95% --------------------------------------------- 31-60 days 6.48% --------------------------------------------- 61-90 days 10.45% --------------------------------------------- 91-180 days 8.54% --------------------------------------------- 181-270 days 5.21% --------------------------------------------- 271+ days 11.50% --------------------------------------------- 7-DAY SEC YIELD(1) --------------------------------------------- Vista Shares 5.00% --------------------------------------------- Premier Shares 5.21% --------------------------------------------- Institutional Shares 5.44% --------------------------------------------- Reserve Shares 4.96% --------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares, Institutional Shares and Reserve Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 4.96%, 5.37% and 4.31% for Vista Shares, Institutional Shares and Reserve Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce the fund's performance. 5 - -------------------------------------------------------------------------------- JPMorgan Prime Money Market Fund II As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current income consistent with capital preservation - -------------------------------------------------------------------------------- Primary investments High quality, short-term, U.S. dollar- denominated money market instruments - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier, Institutional, Reserve, B and C Shares - -------------------------------------------------------------------------------- Net assets $29.6 Billion - -------------------------------------------------------------------------------- Average maturity 45 days - -------------------------------------------------------------------------------- S&P Rating* AAA - -------------------------------------------------------------------------------- Moody's Rating* Aaa - -------------------------------------------------------------------------------- NAIC Rating* Class 1 - -------------------------------------------------------------------------------- * This rating is historical and is based upon the Fund's credit quality, market price exposure and management. It signifies that the Fund's safety is excellent and that it has superior capacity to maintain a $1 Net Asset Value per share. The National Association of Insurance Commissioners' (NAIC's) Class 1 status indicates that the Fund meets certain pricing and quality guidelines. MATURITY SCHEDULE --------------------------------------------- 1-14 days 42.17% --------------------------------------------- 15-30 days 22.58% --------------------------------------------- 31-60 days 10.85% --------------------------------------------- 61-90 days 8.70% --------------------------------------------- 91-180 days 12.57% --------------------------------------------- 181-270 days 1.73% --------------------------------------------- 271+ days 1.40% --------------------------------------------- 7-DAY SEC YIELD(1) --------------------------------------------- B Shares 4.56% --------------------------------------------- C Shares 4.56% --------------------------------------------- Vista Shares 5.21% --------------------------------------------- Premier Shares 5.35% --------------------------------------------- Institutional Shares 5.54% --------------------------------------------- Reserve Shares 5.01% --------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for B Shares, C Shares, Vista Shares, Premier Shares, Institutional Shares and Reserve Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 4.55%, 4.55%, 5.20%, 5.32%, 5.47% and 4.35% for B Shares, C Shares, Vista Shares, Premier Shares, Institutional Shares and Reserve Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce the fund's performance. 6 - -------------------------------------------------------------------------------- JPMorgan Tax Free Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current tax free income consistent with capital preservation* - -------------------------------------------------------------------------------- Primary investments Short-term municipal obligations - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista, Premier, Institutional and Reserve Shares - -------------------------------------------------------------------------------- Net assets $1.8 Billion - -------------------------------------------------------------------------------- Average maturity 46 days - -------------------------------------------------------------------------------- S&P Rating** AAA - -------------------------------------------------------------------------------- Moody's Rating Not rated - -------------------------------------------------------------------------------- NAIC Rating Not rated - -------------------------------------------------------------------------------- ** This rating is historical and is based upon the Fund's credit quality, market price exposure and management. It signifies that the Fund's safety is excellent and that it has superior capacity to maintain a $1 Net Asset Value per share. MATURITY SCHEDULE --------------------------------------------- 1-14 days 72.01% --------------------------------------------- 15-30 days 1.45% --------------------------------------------- 31-60 days 2.98% --------------------------------------------- 61-90 days 2.84% --------------------------------------------- 91-180 days 14.29% --------------------------------------------- 181-270 days 3.03% --------------------------------------------- 271+ days 3.40% --------------------------------------------- YIELDS Taxable 7-Day Equivalent SEC Yield(1) Yield(2) - -------------------------------------------------------------------------------- Vista Shares 3.10% 5.13% - -------------------------------------------------------------------------------- Premier Shares 3.18% 5.26% - -------------------------------------------------------------------------------- Institutional Shares 3.43% 5.68% - -------------------------------------------------------------------------------- Reserve Shares 2.96% 4.90% - -------------------------------------------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares, Premier Shares, Institutional Shares and Reserve Shares reflect the voluntary waiver of certain expenses. Without waivers, the yields would have been 2.99%, 3.18%, 3.34% and 2.31% for Vista Shares, Premier Shares, Institutional Shares and Reserve Shares, respectively. This voluntary waiver may be modified or terminated at any time, which would reduce performance. (2) Taxable equivalent yields are calculated based on the SEC yield divided by 1 minus the effective tax rate. The effective federal tax rate used for this illustration is 39.6%. * A portion of the Fund's income may be subject to the Alternative Minimum Tax (AMT), and some investors may be subject to certain state and local taxes. 7 - -------------------------------------------------------------------------------- JPMorgan New York Tax Free Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current tax free income consistent with capital preservation* - -------------------------------------------------------------------------------- Primary investments New York short-term municipal obligations - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share classes offered Vista and Reserve Shares - -------------------------------------------------------------------------------- Net assets $2.2 Billion - -------------------------------------------------------------------------------- Average maturity 38 days - -------------------------------------------------------------------------------- S&P Rating Not rated - -------------------------------------------------------------------------------- Moody's Rating Not rated - -------------------------------------------------------------------------------- NAIC Rating Not rated - -------------------------------------------------------------------------------- MATURITY SCHEDULE --------------------------------------------- 1-14 days 75.46% --------------------------------------------- 15-30 days 1.23% --------------------------------------------- 31-60 days 5.12% --------------------------------------------- 61-90 days 1.24% --------------------------------------------- 91-180 days 11.74% --------------------------------------------- 181-270 days 1.63% --------------------------------------------- 271+ days 3.58% --------------------------------------------- YIELDS Taxable 7-Day Equivalent SEC Yield(1) Yield(2) - -------------------------------------------------------------------------------- Vista Shares 2.95% 5.47% - -------------------------------------------------------------------------------- Reserve Shares 2.75% 5.10% - -------------------------------------------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yields for Vista Shares and Reserve Shares reflect the voluntary waiver of certain expenses. Without waivers, the yield would have been 2.84% for Vista Shares and 2.05% for Reserve Shares. This voluntary waiver may be modified or terminated at any time, which would reduce performance. (2) Taxable Equivalent Yields are calculated based on the SEC yield divided by 1 minus the effective tax rate. The effective combined federal, state and local tax rate used for this illustration is 46.05%. * A portion of the Fund's income may be subject to the Alternative Minimum Tax (AMT), and some investors may be subject to certain state and local taxes. 8 - -------------------------------------------------------------------------------- JPMorgan California Tax Free Money Market Fund As of February 28, 2001 (Unaudited) FUND FACTS - -------------------------------------------------------------------------------- Objective High current tax free income consistent with capital preservation* - -------------------------------------------------------------------------------- Primary investments California short-term municipal obligations - -------------------------------------------------------------------------------- Suggested investment time frame Short-term - -------------------------------------------------------------------------------- Share Classes Offered Vista Shares - -------------------------------------------------------------------------------- Net assets $88.6 Million - -------------------------------------------------------------------------------- Average maturity 46 days - -------------------------------------------------------------------------------- S&P Rating Not rated - -------------------------------------------------------------------------------- Moody's Rating Not rated - -------------------------------------------------------------------------------- NAIC Rating Not rated - -------------------------------------------------------------------------------- MATURITY SCHEDULE --------------------------------------------- 1-14 days 73.14% --------------------------------------------- 15-30 days 0.00% --------------------------------------------- 31-60 days 1.13% --------------------------------------------- 61-90 days 6.69% --------------------------------------------- 91-180 days 13.64% --------------------------------------------- 181-270 days 4.83% --------------------------------------------- 271+ days 0.57% --------------------------------------------- YIELDS Taxable 7-Day Equivalent SEC Yield(1) Yield(2) - -------------------------------------------------------------------------------- Vista Shares 2.32% 4.24% - -------------------------------------------------------------------------------- Past performance is not a guarantee of future results. Yields will fluctuate. An investment in a money market fund is not insured by the FDIC or any other government agency. Although money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. (1) The yield for Vista Shares reflects the voluntary waiver of certain expenses. Without waivers, the yield would have been 2.07%. This voluntary waiver may be modified or terminated at any time, which would reduce performance. (2) Taxable Equivalent Yields are calculated based on the SEC yield divided by 1 minus the effective tax rate. The effective combined federal, state and local tax rate used for this illustration is 45.22%. * A portion of the Fund's income may be subject to the Alternative Minimum Tax (AMT), and some investors may be subject to certain state and local taxes. 9 JPMorgan 100% U.S. Treasury Securities Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 100.2% - -------------------------------------------------------------------------------- U.S. Treasury Securities -- 100.2% U.S. Treasury Bills, $300,000 4.89%, 04/26/01 $ 297,720 48,040 4.91%, 04/26/01 47,675 219,510 4.92%, 04/19/01 218,010 100,000 4.92%, 05/03/01 99,144 190,210 4.93%, 05/03/01 188,582 222,625 4.95%, 04/05/01 221,550 125,000 4.96%, 05/24/01 123,571 200,000 4.97%, 04/26/01 198,481 35,500 4.98%, 04/05/01 35,329 29,690 4.98%, 04/12/01 29,517 200,000 4.98%, 05/17/01 197,889 100,000 4.99%, 05/10/01 99,039 150,000 5.00%, 04/05/01 149,276 8,935 5.00%, 05/03/01 8,859 300,000 5.00%, 05/10/01 297,117 100,000 5.01%, 04/12/01 99,416 94,085 5.01%, 04/26/01 93,370 129,520 5.01%, 05/03/01 128,411 70,580 5.01%, 05/10/01 69,902 183,335 5.01%, 05/17/01 181,400 100,000 5.02%, 04/12/01 99,416 125,140 5.03%, 04/12/01 124,409 195,145 5.05%, 04/19/01 193,811 225,000 5.11%, 04/12/01 223,686 54,360 5.14%, 04/19/01 53,988 62,370 5.19%, 04/05/01 62,069 175,000 5.27%, 04/19/01 173,804 500,000 5.78%, 03/29/01 497,784 400,000 5.93%, 03/22/01 398,635 U.S. Treasury Notes, 95,000 5.00%, 04/30/01 94,955 251,000 5.50%, 07/31/01 251,067 198,000 5.63%, 05/15/01 197,715 86,510 6.25%, 04/30/01 86,643 27,000 6.50%, 05/31/01 27,008 150,000 7.88%, 08/15/01 151,886 168,000 8.00%, 05/15/01 168,542 - -------------------------------------------------------------------------------- Total Investments -- 100.2% $5,589,676 (Cost $5,589,676)* - -------------------------------------------------------------------------------- See notes to financial statements. 10 - -------------------------------------------------------------------------------- JPMorgan U.S. Government Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 101.5% - -------------------------------------------------------------------------------- U.S. Government Agency Securities -- 77.5% Federal Farm Credit Bank -- 1.6% Federal Farm Credit Bank, $ 50,000 FRN, 5.45%, 01/18/02 $ 49,991 90,000 FRN, 5.46%, 03/01/01 90,000 ----------- 139,991 Federal Home Loan Bank -- 21.9% Federal Home Loan Bank, 123,000 5.38%, 03/02/01 122,999 75,000 5.50%, 01/18/02 75,000 100,000 6.35%, 12/20/01 99,987 300,000 6.38%, 12/20/01 299,981 100,000 6.70%, 03/01/01 100,000 75,000 6.75%, 03/01/01 75,000 162,000 DN, 4.95%, 08/03/01 158,621 100,000 DN, 5.38%, 03/02/01 99,985 100,000 DN, 6.44%, 03/09/01 99,866 100,000 FRN, 5.19%, 04/12/01 100,000 150,000 FRN, 5.24%, 05/10/01 149,986 100,000 FRN, 5.40%, 02/15/02 99,972 65,000 FRN, 5.42%, 03/06/01 65,000 200,000 FRN, 5.48%, 07/18/01 199,947 175,000 FRN, 5.52%, 10/19/01 174,924 ----------- 1,921,268 Federal Home Loan Mortgage Corp.-- 2.6% Federal Home Loan Mortgage Corp., 150,000 DN, 5.18%, 08/10/01 146,605 79,248 DN, 5.40%, 04/26/01 78,591 ----------- 225,196 Federal National Mortgage Association -- 35.8% Federal National Mortgage Association, 187,177 DN, 4.85%, 08/16/01 183,037 160,000 DN, 4.86%, 07/30/01 156,806 100,000 DN, 5.01%, 12/14/01 96,160 50,000 DN, 5.33%, 03/20/01 49,860 275,000 DN, 5.40%, 06/01/01 271,289 150,000 DN, 5.47%, 05/01/01 148,633 310,000 FRN, 5.24%, 05/10/01 309,993 500,000 FRN, 5.47%, 10/04/01 499,825 250,000 FRN, 5.48%, 06/07/01 249,944 315,000 FRN, 5.53%, 05/24/01 315,000 250,000 FRN, 6.49%, 03/01/01 250,000 400,000 FRN, 6.54%, 12/03/01 399,882 200,000 MTN, FRN, 5.53%, 11/06/01 199,987 ----------- 3,130,416 Student Loan Marketing Association -- 15.6% Student Loan Marketing Association, 100,000 FRN, 5.21%, 08/16/01 100,000 50,000 FRN, 5.24%, 03/15/01 50,000 225,000 FRN, 5.24%, 04/19/01 225,000 200,000 FRN, 5.35%, 07/24/01 199,960 165,000 FRN, 5.35%, 08/23/01 165,015 200,000 FRN, 5.48%, 03/05/01 199,999 See notes to financial statements. 11 JPMorgan U.S. Government Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Student Loan Marketing Association-- Continued $ 150,000 MTN, FRN, 5.25%, 09/13/01 $ 149,953 175,000 MTN, FRN, 5.28%, 08/09/01 174,963 100,000 MTN, FRN, 5.31%, 08/09/01 99,979 ---------- 1,364,869 ---------------------------------------------------------------- Total U.S. Government Agency Securities 6,781,740 (Cost $6,781,740) ---------------------------------------------------------------- Repurchase Agreements -- 24.0% 500,000 Bear Stearns & Co., Inc., Tri Party, 5.50%, due 03/01/01 (Dated 02/28/01, Proceeds $500,076, Secured by U.S. Government Agency Obligations, $509,036, various rates, due 01/18/04 through 02/01/31, Market Value $512,126) 500,000 500,000 Credit Suisse First Boston Corp., Tri Party, 5.48%, due 03/01/01 (Dated 02/28/01, Proceeds $500,076, Secured by U.S. Government Agency Obligations, $518,180, various rates, due 08/01/01 through 03/01/33, Market Value $516,565) 500,000 150,000 Deutsche Bank Securities, Tri Party, 5.30%, due 03/01/01 (Dated 02/28/01, Proceeds $150,022, Secured by USTR & U.S. Government Agency Obligations, $151,223, various rates, due 03/02/01 through 02/15/16, Market Value $153,000) 150,000 549,067 Deutsche Bank Securities, Tri Party, 5.47%, due 03/01/01 (Dated 02/28/01, Proceeds $549,150, Secured by USTR & U.S. Government Agency Obligations, $553,546, various rates, due 03/02/01 through 02/15/16, Market Value $560,049) 549,067 300,000 Merrill Lynch & Co., Inc., Tri Party, 5.47%, due 03/01/01 (Dated 02/28/01, Proceeds $300,046, Secured by U.S. Government Agency Obligations, $299,578, various rates, due 04/15/02 through 11/15/30, Market Value $306,001) 300,000 100,000 Merrill Lynch & Co., Inc., Tri Party, 5.50%, due 03/01/01 (Dated 02/28/01, Proceeds $100,015, Secured by U.S. Government Agency Obligations, $100,709, various rates, due 01/01/26 through 12/01/30, Market Value $102,003) 100,000 ---------------------------------------------------------------- Total Repurchase Agreements 2,099,067 (Cost $2,099,067) - -------------------------------------------------------------------------------- Total Investments -- 101.5% $8,880,807 (Cost $8,880,807)* - -------------------------------------------------------------------------------- See notes to financial statements. 12 - -------------------------------------------------------------------------------- JPMorgan Treasury Plus Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 100.4% - -------------------------------------------------------------------------------- U.S. Treasury Securities -- 44.1% U.S. Treasury Bills, $ 200,000 4.94%, 03/29/01 $ 199,236 100,000 4.95%, 04/05/01 99,522 100,000 4.95%, 04/19/01 99,327 100,000 4.97%, 05/03/01 99,138 200,000 4.98%, 05/17/01 197,895 100,000 4.99%, 04/19/01 99,328 100,000 4.99%, 05/10/01 99,041 100,000 5.08%, 04/12/01 99,413 250,000 5.11%, 04/12/01 248,532 ---------------------------------------------------------------- Total U.S. Treasury Securities 1,241,432 (Cost $1,241,432) ---------------------------------------------------------------- Repurchase Agreements -- 56.3% 250,000 Bear Stearns & Co., Inc., Tri Party, 5.38%, due 03/01/01 (Dated 02/28/01, Proceeds $250,037, Secured by USTR, $208,360, various rates, due 08/15/02 through 02/15/25, Market Value $255,859) 250,000 57,834 Goldman Sachs & Co., Tri Party, 5.10%, due 03/01/01 (Dated 02/28/01, Proceeds $57,842, Secured by USTR, $50,311, various rates, due 05/15/06 through 02/15/29, Market Value $58,991) 57,834 175,000 Goldman Sachs & Co., Tri Party, 5.20%, due 03/01/01 (Dated 02/28/01, Proceeds $175,025, Secured by USTR, $152,235, various rates, due 05/15/06 through 02/15/29, Market Value $178,500) 175,000 200,000 Goldman Sachs & Co., Tri Party, 5.35%, due 03/01/01 (Dated 02/28/01, Proceeds $200,030, Secured by USTR, $173,983, various rates, due 05/15/06 through 02/15/29, Market Value $204,000) 200,000 250,000 Greenwich Capital Markets, Inc., Tri Party, 5.37%, due 03/01/01 (Dated 02/28/01, Proceeds $250,037, Secured by USTR, $211,607, various rates, due 11/15/01 through 08/15/29, Market Value $254,660) 250,000 250,000 Greenwich Capital Markets, Inc., Tri Party, 5.45%, due 03/06/01 (Dated 02/28/01, Proceeds $250,227, Secured by U.S. Government Agency Obligations, $316,639, various rates, due 02/15/07 through 02/15/31, Market Value $255,003) 250,000 400,000 Merrill Lynch & Co., Inc., Tri Party, 5.37%, due 03/01/01 (Dated 02/28/01, Proceeds $400,060, Secured by USTR, $339,469, various rates, due 06/30/01 through 05/15/30, Market Value $406,655) 400,000 ---------------------------------------------------------------- Total Repurchase Agreements 1,582,834 (Cost $1,582,834) - -------------------------------------------------------------------------------- Total Investments-- 100.4% $2,824,266 (Cost $2,824,266)* See notes to financial statements. 13 - -------------------------------------------------------------------------------- JPMorgan Federal Money Market Fund II Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 100.1% - -------------------------------------------------------------------------------- U.S. Government Agency Securities -- 100.1% Federal Farm Credit Bank -- 8.9% Federal Farm Credit Bank, $ 50,000 DN, 5.07%, 01/09/02 $ 47,898 20,000 DN, 5.39%, 03/05/01 19,988 100,000 FRN, 6.45%, 05/01/01 99,992 ---------- 167,878 Federal Home Loan Bank -- 78.5% Federal Home Loan Bank, 20,000 5.12%, 01/16/02 19,986 50,000 6.38%, 12/20/01 50,000 25,000 6.75%, 03/01/01 25,000 50,000 7.13%, 11/15/01 50,325 9,005 DN, 4.75%, 03/01/01 9,005 35,000 DN, 4.86%, 08/10/01 34,252 40,000 DN, 4.95%, 08/03/01 39,166 90,000 DN, 5.18%, 07/06/01 88,397 23,216 DN, 5.19%, 04/27/01 23,027 300,000 DN, 5.23%, 03/01/01 300,000 50,000 DN, 5.36%, 03/02/01 49,993 100,000 DN, 5.38%, 03/02/01 99,985 50,000 DN, 5.46%, 03/22/01 49,842 75,000 DN, 5.95%, 05/11/01 74,139 75,000 DN, 6.03%, 05/01/01 74,250 50,000 DN, 6.37%, 05/04/01 49,449 25,000 DN, 6.51%, 03/15/01 24,941 25,000 DN, 6.55%, 04/09/01 24,833 25,000 DN, 6.55%, 09/13/01 24,163 25,000 DN, 6.57%, 04/20/01 24,786 25,000 DN, 6.63%, 08/31/01 24,210 50,000 FRN, 5.24%, 05/10/01 49,995 100,000 FRN, 5.45%, 02/21/02 99,981 50,000 FRN, 5.48%, 07/18/01 49,987 50,000 FRN, 5.52%, 10/19/01 49,978 75,000 MTN, FRN, 5.47%, 03/20/01 74,998 ---------- 1,484,688 Student Loan Marketing Association -- 12.7% Student Loan Marketing Association, 50,000 FRN, 5.25%, 11/15/01 50,000 28,200 FRN, 5.28%, 07/19/01 28,198 113,000 FRN, 5.35%, 08/23/01 113,011 50,000 MTN, FRN, 5.25%, 09/13/01 49,984 ---------- 241,193 - -------------------------------------------------------------------------------- Total Investments -- 100.1% $1,893,759 (Cost $1,893,759)* - -------------------------------------------------------------------------------- See notes to financial statements. 14 - -------------------------------------------------------------------------------- JPMorgan Prime Money Market Fund II Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 100.3% - -------------------------------------------------------------------------------- U.S. Government Agency Securities -- 2.8% $ 25,000 Federal Farm Credit Bank, DN, 4.86%, 08/22/01 $ 24,426 Federal Home Loan Bank, 13,702 DN, 4.95%, 08/03/01 13,416 5,488 DN, 4.96%, 08/10/01 5,368 20,375 DN, 4.96%, 08/15/01 19,917 10,105 DN, 4.97%, 08/17/01 9,875 40,456 DN, 4.97%, 08/24/01 39,497 75,000 DN, 6.51%, 03/15/01 74,822 Federal Home Loan Mortgage Corp., 160,000 DN, 4.86%, 07/27/01 156,869 23,000 DN, 4.86%, 08/16/01 22,482 192,000 DN, 4.95%, 08/16/01 187,671 Federal National Mortgage Association, 100,000 DN, 4.95%, 08/16/01 97,741 98,856 DN, 4.97%, 08/02/01 96,801 76,762 DN, 4.97%, 08/09/01 75,094 ---------------------------------------------------------------- Total U.S. Government Agency Securities 823,979 (Cost $823,979) ---------------------------------------------------------------- State and Municipal Obligations -- 0.5% California -- 0.3% California Housing Finance Agency, Single Family Housing, Home Mortgage, Taxable, 33,530 Ser. M, Rev., FRDO, 5.31%, 03/05/01 33,530 20,205 Ser. M, Rev., FRDO, 5.31%, 03/05/01 20,205 20,000 California Pollution Control Financing Authority, Environmental Improvement, Shell Oil Co. Project, Taxable, Ser. B, Rev., FRDO, 5.46%, 03/07/01 20,000 22,000 Sacramento County, California, Taxable, Rev., FRDO, 5.45%, 03/07/01 22,000 -------- 95,735 Michigan -- 0.0% 3,636 Sault Sainte Marie, Michigan, Tribe Building Authority, Taxable, Rev., FRDO, 7.04%, 06/01/01 3,636 Missouri -- 0.1% 16,200 SSM Healthcare, Missouri Health Facilities, Taxable, Ser. E, Rev., FRDO, 5.50%, 03/06/01 16,200 Texas -- 0.1% 32,500 Texas State, Veterans Housing Assistance, Taxable, Ser. A-2, GO, FRDO, 5.45%, 03/07/01 32,500 ---------------------------------------------------------------- Total State and Municipal Obligations 148,071 (Cost $148,071) ---------------------------------------------------------------- Corporate Notes & Bonds -- 31.7% Asset Backed Securities -- 6.2% 47,000 ACE Overseas Corp., FRN, 6.51%, 03/16/01 46,999 Beta Finance Corp., Inc., (Channel Islands), 75,000 FRN, 5.56%, 08/14/01 74,998 30,000 MTN, #, 6.90%, 03/30/01 30,000 85,000 MTN, #, 6.94%, 05/02/01 85,000 50,000 MTN, FRN, 5.36%, 04/30/01 50,000 125,000 MTN, FRN, #, 5.55%, 05/08/01 125,000 See notes to financial statements. 15 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Asset Backed Securities -- Continued $ 50,000 MTN, FRN, #, 6.11%, 03/30/01 $ 50,000 CC USA, Inc. (Centauri Corp.), 100,000 MTN, #, 7.07%, 07/25/01 100,000 35,000 MTN, #, 7.12%, 05/07/01 35,000 75,000 MTN, #, 7.48%, 06/07/01 75,000 50,000 MTN, FRN, #, 5.56%, 04/20/01 50,000 Ciesco L.P., 120,000 Ser. A, MTN, FRN, 5.54%, 10/15/01 120,000 80,000 Ser. A, MTN, FRN, #, 5.54%, 09/20/01 80,000 70,000 Dorada Finance Inc., MTN, #, 7.06%, 07/17/01 70,000 K2 (USA) LLC, 55,000 MTN, FRN, #, 5.57%, 07/16/01 55,000 100,000 MTN, FRN, #, 5.57%, 08/15/01 100,000 120,000 Liberty Lighthouse U.S. Capital Co., MTN, FRN, #, 5.36%, 03/05/01 120,000 75,000 Links Finance LLC, MTN, FRN, #, 5.55%, 05/11/01 74,998 Restructured Asset Securities with Enhanced Returns (RACERS), 37,000 1999 Ser. MM-35, FRN, #, 5.60%, 12/17/01 37,000 90,000 2000 Ser. MM-7, FRN, #, 5.40%, 05/30/01 89,988 100,000 2000 Ser. MM-10, FRN, #, 5.59%, 06/22/01 100,000 Sigma Finance Corp., (Channel Islands), 100,000 MTN, FRN, #, 5.46%, 05/02/01 100,000 75,000 MTN, FRN, #, 5.56%, 03/05/01 75,000 100,000 MTN, FRN, #, 5.57%, 05/15/01 100,000 ----------- 1,843,983 Automotive -- 0.8% 60,000 American Honda Finance Corp., MTN, FRN, #, 6.55%, 06/19/01 60,000 General Motors Acceptance Corp., 5,000 MTN, FRN, 5.61%, 07/27/01 5,000 30,000 MTN, FRN, 5.81%, 04/30/01 30,006 150,000 Toyota Motor Credit Corp., MTN, FRN, 6.37%, 04/23/01 149,992 ----------- 244,998 Banking -- 10.0% Abbey National Treasury Services PLC (United Kingdom), (Yankee), 210,000 FRN, 5.44%, 10/25/01 209,932 350,000 MTN, FRN, 5.47%, 06/15/01 349,921 American Express Centurion Bank, 100,000 FRN, 5.54%, 02/14/02 100,000 50,000 MTN, FRN, 5.53%, 04/12/01 49,999 200,000 MTN, FRN, 5.54%, 05/08/01 200,000 50,000 MTN, FRN, 5.56%, 11/20/01 50,000 Bank of America, N.A., 23,600 6.60%, 10/30/01 23,775 50,000 FRN, 6.71%, 09/06/01 50,019 70,000 MTN, FRN, 5.66%, 07/11/01 70,002 Bank One, N.A., 50,000 5.13%, 07/17/01 50,000 100,000 FRN, 5.60%, 09/10/01 100,013 39,000 FRN, 5.60%, 12/17/01 39,011 85,000 FRN, 5.62%, 02/15/02 85,040 See notes to financial statements. 16 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Banking -- Continued $ 85,000 MTN, FRN, 5.64%, 12/12/01 $ 84,981 190,000 Bayerische Landesbank Girozentrale, FRN, (Germany), (Yankee), 5.64%, 03/01/01 190,000 Commerzbank AG (Germany), (Yankee), 160,000 FRN, 5.34%, 06/29/01 159,968 200,000 FRN, 5.48%, 04/26/01 199,991 240,000 FRN, 5.50%, 03/19/01 239,994 100,000 Credit Suisse First Boston Inc. (Switzerland), MTN, FRN, 5.54%, 05/09/01 99,998 100,000 Dexia Bank (Belgium), (Yankee), FRN, 5.63%, 03/01/01 100,000 246,000 Dresdner Bank AG, (Germany), (Yankee), FRN, 5.31%, 03/28/01 245,993 85,000 Fleet National Bank, MTN, FRN, 5.77%, 05/24/01 85,019 National City Bank, 70,000 FRN, 5.54%, 12/04/01 70,000 50,000 MTN, FRN, 6.27%, 07/05/01 49,992 50,000 Wachovia Bank, N.A., FRN, 5.55%, 01/07/02 50,000 ---------- 2,953,648 Financial Services -- 10.4% Associates Corp. of North America, 26,000 FRN, 5.48%, 02/22/02 26,045 75,000 FRN, 6.46%, 06/26/01 75,000 110,000 SUB, FRN, 6.58%, 03/15/01 110,000 85,000 Bear Stearns Companies, Inc., FRN, 5.78%, 08/01/01 85,065 5,000 Bollingbrent L.P., Ser. 1999, FRDO, 5.67%, 03/06/01 5,000 Citigroup, Inc., 175,000 MTN, FRN, 5.52%, 04/04/01 175,000 250,000 MTN, FRN, 5.54%, 06/06/01 250,000 Goldman Sachs Group, Inc., 244,000 FRN, #, 5.80%, 03/15/02 244,000 67,000 MTN, FRN, 5.59%, 02/11/02 67,113 5,000 Homeside Lending, Inc., MTN, FRN, 5.68%, 04/24/01 5,001 Household Finance Corp., 50,000 MTN, FRN, 5.36%, 03/30/01 49,995 25,000 MTN, FRN, 5.76%, 07/16/01 25,004 100,000 MTN, FRN, 6.62%, 06/22/01 100,027 37,000 MTN, FRN, 6.65%, 06/21/01 37,011 Merrill Lynch & Co., Inc., 4,885 MTN, FRN, 5.48%, 08/10/01 4,887 350,000 MTN, FRN, 5.52%, 03/06/01 349,999 75,000 MTN, FRN, 5.56%, 11/19/01 75,000 70,000 MTN, FRN, 5.64%, 01/04/02 69,982 70,000 MTN, FRN, 5.65%, 03/11/02 70,065 Morgan Stanley Dean Witter & Co., 260,000 FRN, 5.59%, 03/15/02 260,000 50,000 FRN, 6.73%, 12/17/01 50,124 150,000 MTN, FRN, 5.55%, 03/16/01 150,000 55,000 MTN, FRN, 5.64%, 05/15/01 55,000 50,000 MTN, FRN, 6.62%, 09/14/01 50,061 35,000 MTN, FRN, 6.67%, 03/13/01 35,000 75,000 MTN, FRN, 6.68%, 03/15/01 75,000 Wells Fargo Bank, N.A., 175,000 MTN, FRN, 5.51%, 07/24/01 174,973 330,000 MTN, FRN, 5.55%, 03/15/02 329,999 See notes to financial statements. 17 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Financial Services -- Continued $ 75,000 Westpac Banking Corp., (Australia), (Yankee), FRN, 5.43%, 05/08/01 $ 75,005 ----------- 3,079,356 Insurance -- 0.2% 50,000 Prudential Funding Corp., MTN, FRN, 5.82%, 04/17/01 50,004 Machinery & Engineering Equipment -- 0.3% Caterpillar Financial Services Corp., 10,000 MTN, FRN, 5.83%, 07/09/01 10,003 75,000 MTN, FRN, 5.92%, 07/09/01 75,001 5,000 MTN, FRN, 6.79%, 06/01/01 5,000 ----------- 90,004 Telecommunications -- 3.8% AT&T Corp., 250,000 FRN, #, 5.51%, 03/08/01 249,999 273,000 FRN, #, 5.61%, 07/19/01 273,000 250,000 BellSouth Telecommunications, Inc., FRN, 6.56%, 01/04/02 250,000 356,000 SBC Communications, Inc., FRN, #, 5.34%, 05/15/01 355,986 ----------- 1,128,985 ---------------------------------------------------------------- Total Corporate Notes & Bonds 9,390,978 (Cost $9,390,978) ---------------------------------------------------------------- Commercial Paper -- 41.4% Asset Backed Securities -- 28.3% Alpine Securitization Corp., 100,000 5.52%, 03/22/01 99,679 143,191 5.52%, 03/23/01 142,710 Amstel Funding Corp., 152,000 5.37%, 05/09/01 150,456 95,000 5.56%, 03/07/01 94,912 48,000 6.67%, 03/15/01 47,878 Amsterdam Funding Corp., 25,000 5.43%, 04/04/01 24,873 50,000 5.51%, 03/07/01 49,954 37,300 Asset Portfolio Funding Corp., 6.47%, 03/16/01 37,201 Atlantis One Funding Corp., 50,000 5.30%, 05/04/01 49,534 50,000 5.31%, 05/04/01 49,534 Barton Capital Corp., 115,000 5.50%, 03/07/01 114,895 140,154 5.52%, 03/07/01 140,026 74,366 5.52%, 03/13/01 74,230 50,000 Bavaria Universal Funding Co., Floating Rate, 5.54%, 08/10/01 50,000 50,000 Beta Finance Corp., Inc. (Channel Islands), 6.73%, 03/22/01 49,810 82,500 Bills Securitization LTD, 5.33%, 05/08/01 81,680 Blue Ridge Asset Funding Corp., 83,478 5.48%, 03/23/01 83,199 50,015 5.52%, 03/14/01 49,916 23,000 5.53%, 03/09/01 22,972 Brahms Funding Corp., 40,000 5.45%, 04/25/01 39,670 See notes to financial statements. 18 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Asset Backed Securities -- Continued $ 140,000 5.61%, 03/26/01 $ 139,459 Certain Funding Corp., 45,815 5.46%, 05/01/01 45,397 59,000 6.51%, 03/12/01 58,885 40,000 Christiania Capital Corp., 4.93%, 08/28/01 39,038 Ciesco L.P., 50,000 5.39%, 04/12/01 49,688 50,000 5.39%, 04/18/01 49,643 Compass Securitization LLC, 120,000 5.52%, 03/16/01 119,725 60,000 6.50%, 03/15/01 59,851 60,000 Corporate Receivables Corp., 5.32%, 05/10/01 59,388 147,956 Dakota Certificate Program (Citibank Credit Card Master Trust I), 5.51%, 03/07/01 147,821 Dorada Finance, Inc., 47,000 5.44%, 04/19/01 46,656 30,890 5.47%, 04/24/01 30,640 31,000 5.47%, 04/25/01 30,744 40,500 5.47%, 04/30/01 40,136 Edison Asset Securitization LLC, 150,000 5.50%, 03/06/01 149,886 150,000 5.50%, 03/07/01 149,863 Falcon Asset Securitization Corp., 45,000 5.51%, 03/13/01 44,916 171,000 5.64%, 03/13/01 170,682 57,100 5.65%, 03/09/01 57,029 Forrestal Funding Master Trust, 102,140 5.47%, 04/24/01 101,313 140,000 6.64%, 03/16/01 139,621 Four Winds Funding Corp., 26,480 5.49%, 04/10/01 26,320 73,000 5.54%, 03/19/01 72,799 50,000 #, 5.52%, 03/21/01 49,847 Galaxy Funding Inc., 90,000 5.17%, 08/10/01 87,963 73,000 5.56%, 03/15/01 72,843 50,000 5.56%, 03/16/01 49,885 2,164 Giro Funding U.S. Corp., 5.52%, 03/01/01 2,164 Giro Multi-Funding Corp., 3,365 5.52%, 03/01/01 3,365 121,000 5.53%, 03/20/01 120,648 40,000 Grand Funding Corp., #, 5.51%, 03/12/01 39,933 Greenwich Funding Corp., 100,000 #, 5.52%, 03/06/01 99,919 57,468 #, 6.54%, 03/06/01 57,421 Greyhawk Funding LLC, 53,000 5.51%, 04/24/01 52,568 90,000 5.52%, 03/14/01 89,821 220,000 #, 5.47%, 05/04/01 217,891 136,300 #, 6.40%, 06/08/01 133,976 Jupiter Securitization Corp., 98,710 5.52%, 03/07/01 98,620 211,167 5.52%, 03/12/01 210,812 See notes to financial statements. 19 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Asset Backed Securities -- Continued $ 47,435 5.53%, 03/08/01 $ 47,384 41,880 6.40%, 06/12/01 41,137 K2 (USA) LLC, 28,000 5.15%, 08/07/01 27,379 52,000 5.17%, 08/09/01 50,828 14,000 5.47%, 04/25/01 13,884 50,000 6.94%, 04/17/01 49,569 19,880 Liberty Street Funding Corp., 5.55%, 04/20/01 19,729 20,000 Links Finance LLC, #, 5.16%, 08/01/01 19,572 100,000 Montauk Funding Corp., 5.51%, 03/09/01 99,878 36,000 Monte Rosa Capital Corp., 5.51%, 03/19/01 35,901 Moriarty LLC, 65,000 5.16%, 08/09/01 63,538 65,000 5.21%, 08/13/01 63,487 250,000 5.33%, 05/08/01 247,515 26,400 5.36%, 07/16/01 25,876 89,000 5.56%, 04/09/01 88,472 80,000 5.92%, 07/05/01 78,390 57,900 Ness Limited., 5.52%, 03/16/01 57,768 New Castle Certificate Program (Discover Card Master Trust I, Ser. 2000-A), 40,000 5.55%, 03/22/01 39,871 175,000 ECN, 6.66%, 03/06/01 174,840 65,556 Old Line Funding Corp., 5.52%, 03/14/01 65,426 Pennine Funding LLC, 40,000 5.15%, 08/01/01 39,147 45,000 5.49%, 04/19/01 44,668 50,000 Pooled Accounts Receivable Capital Corp., 5.52%,03/16/01 49,885 65,640 Preferred Rec Funding (PREFCO), 5.62%, 03/13/01 65,518 Receivables Capital Corp., 90,462 5.51%, 03/09/01 90,352 60,000 5.52%, 03/12/01 59,899 71,340 Repeat Offering Securitization Entity (ROSE), 5.53%, 04/23/01 70,768 Sheffield Receivables Corp., 53,500 5.52%, 03/12/01 53,405 175,000 5.52%, 03/15/01 174,625 150,000 5.53%, 03/19/01 149,588 150,000 5.62%, 03/20/01 149,559 26,800 6.50%, 03/12/01 26,753 Sigma Finance Corp., (Channel Islands), 150,000 #, 5.14%, 08/02/01 146,778 83,500 #, 5.16%, 08/02/01 81,707 66,400 #, 5.47%, 04/23/01 65,872 45,000 #, 6.37%, 06/11/01 44,213 Silver Tower U.S. Funding LLC, 135,000 4.98%, 08/29/01 131,701 95,000 5.25%, 08/17/01 92,721 Special Purpose Accounts Receivable Cooperative, 117,000 5.47%, 04/26/01 116,017 18,320 5.54%, 04/12/01 18,203 30,000 Surrey Funding Corp., 5.49%, 03/26/01 29,886 See notes to financial statements. 20 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Asset Backed Securities -- Continued Thames Asset Global Securitization (TAGS), $ 32,000 5.61%, 04/17/01 $ 31,769 86,394 6.51%, 03/15/01 86,179 Tulip Funding Corp., 150,000 5.49%, 05/01/01 148,625 46,687 #, 5.07%, 08/28/01 45,534 100,000 Variable Funding Capital Corp., 5.47%, 04/27/01 99,145 50,000 Victory Receivables, 5.57%, 04/11/01 49,687 50,000 WCP Funding, Inc., 5.33%, 05/14/01 49,460 Windmill Funding Corp., 110,800 5.51%, 03/07/01 110,699 40,000 5.52%, 03/07/01 39,963 75,000 5.52%, 03/20/01 74,782 ---------- 8,417,857 Banking -- 5.8% 170,000 Abbey National North America Corp., 5.20%, 08/20/01 165,882 25,000 Banco B.I. Creditanstalt SA (United Kingdom), 6.73%, 03/09/01 24,964 20,000 Banco Rio De La Plata SA (Argentina), 6.78%, 03/08/01 19,975 50,000 Banco Santander Central Hispano SA (Spain), (Yankee), 5.17%, 08/06/01 48,894 Bank of America, N.A., 75,000 6.52%, 05/10/01 74,075 250,000 6.69%, 03/12/01 249,505 100,000 Banque ET Caisse D'Epargne De L'Etat (Luxembourg), 4.93%, 08/30/01 97,568 50,000 Banque Generale du Luxembourg SA (Luxembourg), 5.50%, 07/16/01 48,982 200,000 Commerzbank US Finance, Inc., 5.53%, 03/13/01 Credit Suisse First Boston International, (Switzerland), 199,633 36,000 6.63%, 04/16/01 35,703 20,000 6.66%, 05/07/01 19,760 Credit Suisse First Boston, Inc., 70,000 5.24%, 07/20/01 68,594 100,000 6.71%, 03/12/01 99,802 75,000 6.71%, 03/14/01 74,824 70,000 Dexia Delaware LLC, 5.16%, 08/10/01 68,416 Halifax PLC (United Kingdom), 75,000 5.45%, 07/16/01 73,487 30,000 5.60%, 04/10/01 29,816 150,000 6.61%, 05/02/01 148,347 40,000 Lloyds TSB Bank PLC (United Kingdom), 5.14%, 08/01/01 39,148 65,000 Svenska Handelsbanken, Inc. (Sweden), 5.20%, 08/15/01 63,471 60,000 Unibanco-Grand Cayman, Series A, (Germany), 5.55%, 07/11/01 58,812 ---------- 1,709,658 Chemicals -- 0.3% 75,000 BASF AG (Germany), 6.68%, 03/29/01 74,623 See notes to financial statements. 21 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Consumer Products -- 0.2% $ 50,000 Procter & Gamble Co., ECN, 5.60%, 04/05/01 $ 49,731 Diversified -- 0.4% 50,000 General Electric Capital Corp., 6.66%, 03/07/01 49,946 80,000 General Electric Capital Services, Inc., 5.11%, 07/11/01 78,534 ----------- 128,480 Financial Services -- 5.7% 109,000 Associates Corp. of North America, ECN, 6.50%, 03/02/01 108,981 Citicorp, 300,000 5.51%, 03/02/01 299,955 200,000 5.52%, 03/05/01 199,878 75,000 CXC, Inc., 5.59%, 04/04/01 74,609 Fairway Finance Corp., 6,392 5.48%, 04/16/01 6,348 40,000 6.48%, 03/15/01 39,901 200,000 Goldman Sachs Group, Inc., 5.76%, 04/12/01 198,677 60,000 Govco, Inc., 5.32%, 05/16/01 59,335 HomeSide Lending, Inc., 25,000 5.50%, 03/21/01 24,924 12,775 5.50%, 03/22/01 12,734 14,716 5.50%, 03/23/01 14,667 69,647 Kitty Hawk Funding Corp., 5.18%, 08/15/01 68,015 75,000 Morgan Stanley Dean Witter & Co., Floating Rate, 5.64%, 05/30/01 75,000 Nationwide Building Society (United Kingdom), 100,000 5.18%, 08/13/01 97,685 65,000 5.73%, 04/03/01 64,663 68,000 Newport Funding Corp., 5.58%, 04/11/01 67,574 Quincy Capital Corp., 34,212 5.51%, 03/09/01 34,170 100,032 5.51%, 03/12/01 99,864 Triple-A One Funding Corp., 82,107 5.51%, 03/08/01 82,019 24,963 5.61%, 04/05/01 24,829 45,000 Wells Fargo & Co., 5.38%, 05/04/01 44,575 ----------- 1,698,403 Foreign Government Securities -- 0.1% 35,000 Canada (Government of), 6.52%, 06/07/01 34,400 Retailing -- 0.1% 25,000 Wal-Mart Funding Corp, 5.53%, 03/22/01 24,920 Utilities -- 0.5% 150,000 Comision Federal De Electricdad (Mexico), 6.48%, 03/20/01 149,495 ---------------------------------------------------------------- Total Commercial Paper 12,287,567 (Cost $12,287,567) ---------------------------------------------------------------- See notes to financial statements. 22 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Residential Mortgage Backed Securities -- 1.0% Collateralized Mortgage Obligations -- 1.0% Merrill Lynch Mortgage Investors, Inc., $ 231,069 Ser. 2000-WM2, Class A1, FRN, 5.41%, 11/27/01 $ 231,069 57,583 Ser. 2000-WM2, Class A2, 6.68%, 11/27/01 57,583 ---------------------------------------------------------------- Total Residential Mortgage Backed Securities 288,652 (Cost $288,652) ---------------------------------------------------------------- Funding Agreements/GIC -- 3.0% 50,000 AIG Funding Inc., Floating Rate, 6.63%, 10/01/01 50,000 25,000 First Allmerica Financial Life Insurance Co., Floating Rate, 5.72%, 04/06/01 25,000 150,000 G E Financial Assurance, Floating Rate, 6.81%, 03/01/01 150,000 Jackson National Life Insurance Co., Floating Rate, 100,000 5.83%, 01/18/02 100,000 80,000 5.86%, 09/01/03 80,000 100,000 MetLife Funding Inc., Floating Rate, #, 6.81%, 06/01/01 100,000 275,000 Security Life of Denver Insurance Co., Floating Rate, 5.43%, 02/27/02 275,000 50,000 Travelers Insurance Co., Floating Rate, 5.71%, 04/24/01 50,000 50,000 United of Omaha Life Insurance Company, Floating Rate, 5.72%, 05/17/02 50,000 ---------------------------------------------------------------- Total Funding Agreements/GIC 880,000 (Cost $880,000) ---------------------------------------------------------------- Certificates of Deposit -- 6.6% 100,000 Banca Commerciale Italiana (Italy), (Yankee), 5.75%, 04/09/01 100,000 50,000 Banco Santander Central Hispano SA (Spain), (Yankee), 6.50%, 06/06/01 50,000 75,000 Bank Austria AG, Floating Rate, (Austria), (Yankee), 5.63%, 07/16/01 74,994 Barclays Bank PLC (United Kingdom), (Yankee), 120,000 5.53%, 04/10/01 119,973 260,000 Floating Rate, 5.57%, 12/12/01 259,941 210,000 Floating Rate, 5.59%, 09/24/01 209,937 100,000 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 5.58%, 04/27/01 100,000 150,000 Bayerische Landesbank Girozentrale (Germany), (Yankee), 5.22%, 02/20/02 149,958 141,000 Credit Agricole Indosuez SA (France), (Yankee), 5.23%, 02/20/02 140,974 150,000 Deutsche Bank AG, (Germany), (Yankee), 6.73%, 03/16/01 149,996 Landesbank Hessen-Thuringen Girozentrale, (Germany), (Yankee), 75,000 6.54%, 04/06/01 75,000 110,000 6.89%, 04/30/01 109,997 50,000 Svenska Handelsbanken, Inc. (Sweden), (Yankee), 5.12%, 08/02/01 49,996 100,000 UBS AG (Switzerland), (Yankee), 5.10%, 08/02/01 99,983 See notes to financial statements. 23 JPMorgan Prime Money Market Fund II - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Certificates of Deposit -- Continued $ 100,000 Westdeutsche Landesbank Girozentrale (Germany), (Yankee), 6.66%, 11/16/01 $ 100,005 160,000 World Savings Bank, 5.32%, 05/31/01 160,000 ---------------------------------------------------------------- Total Certificates of Deposit 1,950,754 (Cost $1,950,754) ---------------------------------------------------------------- Time Deposits -- 13.1% 300,000 ABN AMRO Bank N.V. (Netherlands), 5.54%, 03/01/01 300,000 50,000 Allied Irish Banks PLC (United Kingdom), 6.66%, 03/30/01 50,000 120,000 Bank of Ireland (Ireland), 5.38%, 07/02/01 120,000 100,000 Bank of Nova Scotia (Canada), 5.50%, 07/16/01 100,000 134,000 Bayerische Hypo-und Vereinsbank AG (Germany), (Yankee), 5.66%, 03/01/01 134,000 Caisse des Depots et Consignations, (France), 750,000 5.53%, 03/01/01 750,000 300,000 5.54%, 03/01/01 300,000 Caja De Madrid Bank (Spain), 59,000 5.38%, 07/10/01 59,000 60,000 6.64%, 04/27/01 60,000 37,000 6.65%, 04/24/01 37,000 110,000 6.65%, 07/24/01 110,000 75,000 6.67%, 11/19/01 75,000 200,000 Credit Suisse First Boston (Swiss Bank), (Switzerland), 5.56%, 03/01/01 200,000 275,000 ING Bank N.V. (Netherlands), 5.63%, 03/01/01 275,000 100,000 Landesbank Baden-Wuerttemberg (Germany), 5.56%, 03/01/01 100,000 100,000 Landesbank Schleswig Holstein (Germany), 6.69%, 04/17/01 100,000 Societe Generale (France), 250,000 5.53%, 03/01/01 250,000 417,044 5.63%, 03/01/01 417,044 175,000 Svenska Handelsbanken, Inc. (Sweden), 5.53%, 03/01/01 175,000 223,500 Swedbank (Sweden), 5.59%, 03/01/01 223,500 48,000 Wells Fargo Bank, N.A., 5.55%, 04/30/01 48,000 ---------------------------------------------------------------- Total Time Deposits 3,883,544 (Cost $3,883,544) ---------------------------------------------------------------- Repurchase Agreement -- 0.2% 51,206 Deutsche Bank Securities, Tri Party, 5.47%, due 03/01/01 (Dated 02/28/01, Proceeds $51,214, Secured by FNMA, $51,808, 5.75%, due 02/15/08, Market Value $52,230) 51,206 (Cost $51,206) ---------------------------------------------------------------- Total Investments -- 100.3% $29,704,751 (Cost $29,704,751)* ---------------------------------------------------------------- See notes to financial statements. 24 - -------------------------------------------------------------------------------- JPMorgan Tax Free Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- 100% - -------------------------------------------------------------------------------- U.S. Government Agency Security -- 0.1% $ 1,100 Federal Home Loan Mortgage Corp., DN, 5.23%, 03/01/01 $ 1,100 (Cost $1,100) Municipal Securities -- 99.9% Alabama -- 0.6% 5,000 Birmingham, Alabama, Apartment Authority, Municipal Securities Trust Receipts, Ser. SGA-47, Rev., FRDO, 3.24%, 03/02/01 5,000 3,000 Infirmary Health Systems, Special Care Facilities Financing Authority, Mobile, Alabama, Infirmary Health Systems Inc., Ser. A, Rev., FRDO, 3.50%, 03/06/01 3,000 1,500 Stevenson, Alabama, Industrial Development Board, Environmental Improvement, The Mead Corp. Project, Rev., FRDO, 3.15%, 03/01/01 1,500 1,900 University of Alabama, Hospital, Ser. B, Rev., FRDO, 3.15%, 03/07/01 1,900 --------- 11,400 Alaska -- 1.6% 7,875 Alaska State, Housing Finance Corp., Floating Rate Trusts Receipts, Ser. N-13, Regulation D, Rev., FRDO, 3.35%, 03/02/01 7,875 7,835 Alaska State, Housing Finance Corp., FLOATS, Ser. L20, Regulation D, FRDO, 3.35%, 03/02/01 7,849 6,845 Alaska State, Housing Finance Corp., FLOATS, Ser. PT-202, Rev., FRDO, 3.54%, 03/01/01 6,845 5,000 Valdez, Alaska, Marine Terminal, Ser. A-28, Regulation D, FRDO, 3.35%, 03/07/01 5,000 --------- 27,569 Arizona -- 0.6% 3,200 Salt River, Arizona, Agricultural Improvement & Power District, Electric Systems, Salt River Project, Ser. B, Rev., 4.65%, 01/01/02 3,227 1,300 Tempe, Arizona, Excise Tax, Rev., FRDO, 3.15%, 03/01/01 1,300 5,300 University of Arizona, Main Campus & Research, Ser. A, Rev., COP, FRDO, 3.15%, 03/02/01 5,300 --------- 9,827 Arkansas -- 0.8% 8,000 Arkansas Hospital Equipment Finance Authority, AHA Pooled Financing Program, Rev., FRDO, 3.20%, 03/07/01 8,000 5,500 Columbia County, Arkansas, Solid Waste Disposal, Albemarle Corp. Project, Rev., FRDO, 3.70%, 03/01/01 5,500 --------- 13,500 Colorado -- 1.4% 1,000 Arapahoe County, Colorado, Capital Improvement Trust, Federal Highway, FLOATS, Ser. PT-437, Rev., Prerefunded to 08/31/05, FRDO, 3.54%, 03/01/01 1,001 2,850 Arvada, Colorado, Rev., FRDO, 3.80%, 03/22/01 2,850 See notes to financial statements. 25 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Colorado -- Continued $ 4,800 Colorado Health Facilities Authority, Catholic Health, Ser. B, Rev., FRDO, 3.25%, 03/01/01 $ 4,800 6,000 Colorado Springs, Colorado, Utilities, Municipal Securities Trust Receipts, Ser. SGA-88, Rev., FRDO, 3.20%, 03/01/01 6,000 2,500 Colorado Student Obligation Bond Authority, Student Loan, Senior Lien, Ser. A-3, Rev., FRDO, 3.25%, 03/07/01 2,500 3,400 Denver, Colorado, City & County Airport, Floating Rate Certificates, Ser.L-27, Regulation D, Rev., FRDO, 3.40%, 03/07/01 3,400 1,000 Denver, Colorado, City & County, GO, ^, 6.38%, 08/01/01 1,023 3,000 Jefferson County, Colorado, School District No. R-001, TAN, GO, 5.00%, 06/27/01 3,006 ------- 24,580 Connecticut -- 0.9% 15,100 Meriden, Connecticut, GO, BAN, 4.75%, 08/08/01 15,118 District of Columbia -- 3.4% 2,050 District of Columbia, Housing Finance Agency, Ser. L-1, Regulation D, Rev., FRDO, 3.40%, 03/01/01 2,050 2,535 District of Columbia, National Children's Center Inc., FRDO, 3.55%, 03/01/01 2,535 6,155 Eagle Tax Exempt Trust, Weekly Option Mode, Water & Sewer Rev., District of Columbia, Ser. 98-5202, FRDO, #, 3.57%, 03/01/01 6,155 14,500 Eagle Tax Exempt Trust, Weekly Option Mode, Water & Sewer, Ser. 3, Class 7, Rev., FRDO, #, 3.57%, 03/01/01 14,500 10,000 Metropolitan Washington Airport, Rev., 3.38%, 04/04/01 10,000 10,000 Metropolitan Washington Airport, Rev., 3.45%, 03/08/01 10,000 6,500 Metropolitan Washington Airport, Rev., 3.45%, 07/25/01 6,500 9,000 Metropolitan Washington Airport, Rev., 3.50%, 04/04/01 9,000 ------- 60,740 Florida -- 4.7% 400 Alachua County, Florida, Health Facilities Authority, Shands Teaching Hospital, Ser. B, Rev., FRDO, 3.25%, 03/07/01 400 6,700 Broward County, Florida, Port Facilities, Everglades, SUB, Rev., FRDO, 3.50%, 03/07/01 6,700 1,150 Collier County, Florida, Health Facilities Authority, The Moorings Inc. Project, Rev., FRDO, 3.10%, 03/07/01 1,150 2,695 Dade County, Florida, Housing Finance Authority, Multi-Family Housing, Kendall Ct. Apartments, Rev., FRDO, 3.55%, 03/01/01 2,695 1,995 Dade County, Florida, Housing Finance Authority, Multi-Family Housing, Star Creek Apartments, Rev., FRDO, 3.55%, 03/01/01 1,995 See notes to financial statements. 26 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Florida -- Continued $ 1,675 Dade County, Florida, Housing Finance Authority, Single Family Housing, FLOATS, Ser. PT-344, Rev., FRDO, 3.59%, 03/01/01 $ 1,681 5,700 Escambia County, Florida, Housing Finance Authority, Single Family Housing, FLOATS, Ser. PT-1228, Rev., FRDO, 3.59%, 03/01/01 5,700 6,500 Florida Finance Commission, 3.40%, 08/24/01 6,500 7,750 Florida Housing Finance Agency, Ashley Lake II, Ser. J, Rev., FRDO, 3.25%, 03/07/01 7,750 5,275 Florida Housing Finance Agency, Multi-Family Housing, Banyon, Ser. L, Rev., FRDO, 3.25%, 03/06/01 5,275 1,500 Florida State, Board of Public Education, Municipal Securities Trust Receipts, Ser. SGA-102, GO, FRDO, 3.20%, 03/01/01 1,500 12,500 Florida, Local Government Finance Commission, 3.40%, 06/07/01 12,500 5,330 Gulf Breeze, Florida, Local Government Loan Program, Ser. B, Rev., FRDO, 3.45%, 03/01/01 5,330 100 Jacksonville, Florida, Capital Project, Ser. 1, Rev., FRDO, 3.20%, 03/05/01 100 3,705 Jacksonville, Florida, Electric Authority, Municipal Securities Trust Receipts, Ser. SGA-17, Rev., FRDO, 3.24%, 03/07/01 3,705 1,000 Jacksonville, Florida, Health Facilities Authority, River Garden Project, Rev., FRDO, 3.50%, 03/01/01 1,000 9,990 Municipal Securities Trust Certificates, Ser. 2000-9007, Class A, Rev., FRDO, 3.34%, 03/07/01 9,990 4,800 Tampa, Florida, Sports Authority, Municipal Securities Trust Receipts, Ser. SGA-61, Rev., FRDO, 3.20%, 03/01/01 4,801 4,500 The University of North Florida Foundation Inc., Parking System, Rev., FRDO, 3.60%, 03/02/01 4,500 ------- 83,272 Georgia -- 2.4% 10,580 Atlanta, Georgia, Water & Wastewater, Municipal Securities Trust Receipts, Ser. SGA-86, Rev., FRDO, 3.27%, 03/05/01 10,580 960 Bibb County, Georgia, Class A Certificates, Ser. C, FRDO, 3.64%, 03/01/01 960 1,660 Clayton County, Georgia, Housing Authority, Multi-Family Housing, Chateau Forest Apartments, Ser. E, Rev., FRDO, 3.20%, 03/07/01 1,660 1,000 Fulton County, Georgia, Development Authority, Arthritis Foundation Inc. Project, Rev., FRDO, 3.50%, 03/01/01 1,000 2,020 Fulton County, Georgia, Development Authority, Morehouse College Project, Rev., FRDO, 3.15%, 03/06/01 2,020 3,661 Georgia Municipal Association Pooled Bond, COP, FRDO, 3.50%, 03/07/01 3,661 3,900 Municipal Electric Authority of Georgia, General Resolution Projects, Sub. Ser. B, Rev., FRDO, 3.10%, 03/06/01 3,900 See notes to financial statements. 27 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Georgia -- Continued $ 1,000 Municipal Electric Authority of Georgia, Project One, Ser. B, Rev., FRDO, 3.05%, 03/02/01 $ 1,000 15,000 Northeast, Georgia, Heath Systems Inc., Ser. A, 4.00%, 02/01/02 15,000 3,000 Richmond County, Georgia, Board of Education, GO, 4.50%, 09/01/01 3,017 -------- 42,798 Hawaii -- 1.5% 19,790 Hawaii State, Highway, FLOATS, Ser. PT-1058, FRDO, 3.54%, 03/01/01 19,790 1,580 Hawaii State, Housing Finance & Development Corp., Single Family Mortgage, FLOATS, Ser. PA-73A, Rev., FRDO, 3.64%, 03/02/01 1,588 5,605 Honolulu, Hawaii, City & County, Ser. A, GO, ^, 6.30%, 03/01/02 5,880 -------- 27,258 Idaho -- 0.2% 3,750 Idaho, Housing and Finance Association, Single Family Housing, Ser F-1, Class 1, Rev., FRDO, 3.30%, 03/05/01 3,750 Illinois -- 5.3% 4,400 Chicago, Illinois, Equipment Notes, GO, FRDO, 4.37%, 10/04/01 4,400 6,700 Chicago, Illinois, O'Hare International Airport, Second Lien, Ser. B, Rev., FRDO, 3.35%, 03/07/01 6,700 5,600 Chicago, Illinois, Water, Municipal Securities Trust Receipts, Ser. SGA-93, Rev., FRDO, 3.20%, 03/01/01 5,600 3,885 Cook County, Illinois, Municipal Trust Receipts, Ser. SG-7, FRDO, 3.54%, 03/07/01 3,885 3,600 Illinois Development Finance Authority, American Youth Hostels Project, Rev., FRDO, 3.55%, 03/05/01 3,600 3,205 Illinois Development Finance Authority, IDR, CFC International Inc. Project, Rev., FRDO, 3.60%, 03/05/01 3,205 1,300 Illinois Development Finance Authority, Residential Rental, Rev., FRDO, 3.50%, 03/01/01 1,300 1,820 Illinois Development Finance Authority, Toughy LTD Partnership Project, Rev., FRDO, 3.28%, 03/05/01 1,820 4,800 Illinois Health Facilities Authority, Carle Foundation, Rev., FRDO, 3.20%, 03/07/01 4,800 12,000 Illinois Health Facilities Authority, Ser. 1998-B, Rev., 3.40%, 06/13/01 12,000 15,865 Illinois Health Facilities Authority, Swedish Covenant Hospital Project, Rev., FRDO, 3.25%, 03/06/01 15,865 4,595 Illinois Housing Development Authority, FLOATS, Ser. L19, Regulation D, Rev., FRDO, 3.35%, 03/01/01 4,595 3,600 Illinois Housing Development Authority, Multi-Family Housing, Camelot, Rev., FRDO, 3.35%, 03/05/01 3,600 2,985 Illinois Housing Development Authority, Multi-Family Housing, Lakeshore Plaza, Ser. A, Rev., FRDO, 3.20%, 03/06/01 2,985 7,300 Illinois State, Toll Highway Authority, Toll Highway Priority, Ser. B, Rev., FRDO, 3.05%, 03/07/01 7,300 See notes to financial statements. 28 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Illinois -- Continued $ 2,570 Lake County, Illinois, IDR, A.L. Hansen Manufacturing Project, Rev., FRDO, 3.45%, 03/01/01 $ 2,570 2,325 Libertyville, Illinois, Industrial Revenue, Libertyville Manor Project, Rev., FRDO, 3.75%, 03/07/01 2,325 9,800 University of Illinois, Health Services Facilities System, Ser. B, Rev., FRDO, 3.15%, 03/05/01 9,800 ------- 96,350 Indiana -- 2.7% 5,000 DeKalb County, Indiana, Economic Development, New Process Steel Project, Rev., FRDO, 3.70%, 03/02/01 5,000 5,990 Indiana Bond Bank, FLOATS, Ser. PA-688, Rev., FRDO, 3.54%, 03/01/01 5,990 1,100 Indiana Secondary Market Educational Loans Inc., Ser. B, Rev., FRDO, 3.25%, 03/06/01 1,100 9,000 Indiana State, Development Finance Authority, PCR, Southern Indiana Gas & Electric, Ser. A, Rev., FRDO, 4.30%, 03/01/01 9,000 6,665 Indiana State, Office Building Commission Capital Complex, FLOATS, Ser. PT-381, Rev., FRDO, 3.54%, 03/01/01 6,665 15,000 Indiana, Highway Transportation Finance Authority, Municipal Securities Trust Receipts, Ser. SGA-113, Rev., FRDO, 3.20%, 03/01/01 15,000 1,095 Lafayette, Indiana, Economic Development, Health Quest Realty Project, Rev., FRDO, 3.58%, 03/05/01 1,095 540 Muncie, Indiana, Economic Development, Health Quest Realty Project, Rev., FRDO, 3.58%, 03/05/01 540 3,305 Municipal Securities Trust Certificates, Ser. 1997-19A, Class A, Rev., FRDO, #, ^, 3.24%, 03/02/01 3,305 ------- 47,695 Iowa -- 1.2% 1,500 Des Moines, Iowa, 3.50%, 08/08/01 1,500 4,300 Des Moines, Iowa, 3.55%, 08/08/01 4,300 15,000 Iowa School Corporations, Iowa School Cash Anticipation Program, Ser. A, Warrant Certificates, Rev., 5.50%, 06/22/01 15,045 ------- 20,845 Kansas -- 1.3% 2,000 Eagle Tax-Exempt Trust, Weekly Option Mode, Ser. 2000-1601, FRDO, 3.57%, 03/07/01 2,000 7,500 Kansas City, Kansas, Industrial, PQ Corp. Project, Rev., FRDO, 3.15%, 03/01/01 7,500 8,720 Kansas State, Development Finance Authority, FLOATS, Ser. PA-715, Rev., FRDO, 3.54%, 03/07/01 8,720 2,050 Spring Hill, Kansas, Industrial Revenue, Abrasive Engineering Project, Rev., FRDO, 3.60%, 03/06/01 2,050 1,650 Wichita, Kansas, Airport Facilities, Cessna Citation Center Project, Ser. III, Rev., FRDO, 3.35%, 03/06/01 1,650 1,800 Wichita, Kansas, Hospital, Facilities Improvement, Riverside, Ser. IV, Rev., FRDO, 3.60%, 03/02/01 1,800 ------- 23,720 See notes to financial statements. 29 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Kentucky -- 1.3% $ 3,000 Jeffersontown, Kentucky, Lease Program, Kentucky League of Cities Funding Trust, Rev., FRDO, 3.25%, 03/01/01 $ 3,000 14,310 Kentucky Area Development Districts, Financing Trust Lease Program, Ewing, Kentucky, Rev., FRDO, 3.60%, 03/01/01 14,310 2,000 Kentucky Asset Liability Commission, General Fund, Ser. A, Rev., TRAN, 5.25%, 06/27/01 2,004 1,085 Kentucky State, Property & Buildings Commission, Project No. 66, Ser. A, Rev, 5.00%, 05/01/01 1,088 2,540 Kentucky, Development Finance Authority, Pooled Loan Project, Ser. A, Rev., FRDO, 3.40%, 03/01/01 2,540 -------- 22,942 Louisiana -- 1.2% 6,550 Caddo Parish, Louisiana, Industrial Development Board Inc., Frymaster Corp. Project, Rev., FRDO, 3.25%, 03/06/01 6,550 3,200 Calcasieu Parish, Louisiana, Industrial Development Board Inc., Citgo Petrol, Rev., FRDO, 3.35%, 03/01/01 3,200 2,685 Iberia Parish, Louisiana, Industrial Development Board Inc., Cuming Insulation Corp. Project, Rev., FRDO, 3.60%, 03/01/01 2,685 3,000 Lake Charles, Louisiana, Harbor & Term, District Dock & Wharf, Conoco Inc. Project, Rev., FRDO, 3.30%, 03/06/01 3,000 1,855 Louisiana Housing Finance Agency, Ser. A-52, Rev., FRDO, 3.35%, 03/01/01 1,855 4,000 Plaquemines, Louisiana, Port Harbor & Terminal District, Port Facilities, International Marine Terminal Project, Ser. B, Rev., FRDO, 4.20%, 03/15/01 4,000 -------- 21,290 Maine -- 0.2% 3,310 Maine State, Turnpike Authority, FLOATS, Ser. PA-699, Rev., FRDO, 3.54%, 03/01/01 3,312 Maryland -- 2.0% 3,000 Anne Arundel County, Maryland, GO, 3.35%, 03/02/01 3,000 8,605 Howard County, Maryland, Multi-Family Housing, Sherwood Crossing LTD, Rev., FRDO, 4.85%, 06/01/01 8,605 500 Maryland Community Development Administration, Multi-Family Housing, Avalon Ridge Apartments Project, Rev., FRDO, 3.10%, 03/05/01 500 14,155 Maryland State, Stadium Authority, Sports Facilities Lease, Rev., FRDO, 3.25%, 03/07/01 14,155 9,970 Municipal Securities Trust Certificates, Ser. 1999-76, Class A, Rev., FRDO, 4.40%, 08/15/01 9,970 -------- 36,230 Massachusetts -- 0.8% 5,750 Massachusetts Bay, Transportation Authority, Municipal Securities Trust Receipts, Ser. SGA-123, Special Assessment, FRDO, 3.24%, 03/01/01 5,750 See notes to financial statements. 30 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Massachusetts -- Continued $ 3,300 Massachusetts State, Health & Educational Facilities Authority, Municipal Securities Trust Receipts, Ser. SGA-97, Rev., FRDO, 3.20%, 03/01/01 $ 3,301 3,000 Massachusetts State, Ser. A, GO, BAN, 5.00%, 09/06/01 3,010 2,100 Massachusetts State, Ser. A, GO, FRDO, 3.25%, 03/01/01 2,100 -------- 14,161 Michigan -- 2.9% 10,300 Detroit, Michigan, Sewer Disposal, Rev., ^, 6.63%, 07/01/01 10,587 6,100 Holt, Michigan, Public Schools, Ser. B, GO, FRDO, 4.30%, 03/01/01 6,100 1,500 Michigan Municipal Bond Authority, Ser. C-2, Rev., 5.00%, 08/23/01 1,505 19,580 Michigan State, Building Authority, Rev., 4.40%, 03/05/01 19,580 1,200 Michigan State, Hospital Finance Authority, Mt. Clemens Hospital, Rev., FRDO, 3.15%, 03/05/01 1,200 6,000 Michigan State, Housing Development Authority, Ser. 1999-B2, Rev., FRDO, 3.30%, 03/02/01 6,000 1,145 Michigan State, Housing Development Authority, Ser. 2000-A, Rev., FRDO, 3.20%, 03/02/01 1,145 1,175 Michigan State, Strategic Fund LTD, Wayne Disposal, Oakland Project, Rev., FRDO, 3.36%, 03/07/01 1,175 5,055 Michigan State, University, Ser. A, GO, Rev., FRDO, 3.10%, 03/05/01 5,055 -------- 52,347 Minnesota -- 0.1% 1,255 Minnesota State, Housing Finance Agency, Single Family Mortgage, Ser. E, Rev., FRDO, 4.35%, 05/01/01 1,255 Mississippi -- 0.6% 2,800 Mississippi Business Finance Corp., IDR, Choctaw Maid Farms, Inc. Project, Rev., FRDO, 3.60%, 03/05/01 2,800 4,820 Mississippi Home Corp., Single Family, Class A Certificates, Ser. I, Rev., FRDO, 3.62%, 03/06/01 4,820 3,170 Mississippi State, Gaming County, Highway Improvements, Ser. A, GO, 5.00%, 07/01/01 3,178 -------- 10,798 Missouri -- 2.1% 7,260 Independence, Missouri, IDA, Multi-Family Housing, FLOATS, Ser. PT-314, Rev., FRDO, 4.40%, 03/01/01 7,260 3,400 Kansas City, Missouri, IDR, Livers Bronze Co. Project, Rev., FRDO, 3.70%, 03/01/01 3,400 880 Macon, Missouri, IDA, Health Care Realty Macon, Rev., FRDO, 4.30%, 03/01/01 880 1,600 Missouri Higher Education Loan Authority, Student Loan, Ser. B, Rev., FRDO, 3.30%, 03/05/01 1,600 3,375 Missouri State, Development Finance Board, Recreational Facilities, Greater St. Louis YMCA Project, Ser. B, Rev., FRDO, 3.55%, 03/06/01 3,375 See notes to financial statements. 31 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Missouri -- Continued $ 8,320 Missouri State, Housing Development Commission, FLOATS, Ser. PT-223, Rev., FRDO, 3.59%, 03/01/01 $ 8,322 6,735 Missouri State, Housing Development Commission, FLOATS, Ser. PT-263, Rev., FRDO, 3.59%, 03/01/01 6,736 3,965 Missouri State, Housing Development Commission, Ser. A-64, Rev., FRDO, 3.35%, 03/07/01 3,970 865 Osage Beach, Missouri, IDA, Health Care Realty Osage, Rev., FRDO, 4.30%, 03/01/01 865 -------- 36,408 Montana -- 0.2% 3,705 Montana State, Board of Housing, FLOATS, Ser. PT-356, Rev., FRDO, 3.59%, 03/02/01 3,705 Multiple States -- 1.5% 27,500 Charter Mac, Floating Rate Certificates, Ser. NAT-1, FRDO, 3.72%, 03/06/01 27,501 Nebraska -- 0.6% 4,700 Nebraska, Municipal Securities Trust Receipts, Ser. 2000-108, Class A, GO, FRDO, 3.20%, 03/01/01 4,700 5,000 Nebraska, Public Power District, Ser. A, Rev., 5.00%, 01/01/02 5,025 1,500 Sidney, Nebraska, IDR, Pennington Seed Inc. Project, Rev., FRDO, 3.60%, 03/06/01 1,500 -------- 11,225 Nevada -- 3.3% 3,300 Clark County, Nevada, Airport, Ser. B-2, Rev., FRDO, 3.15%, 03/07/01 3,300 1,745 Clark County, Nevada, School District, Building & Renovation, Ser. B, GO, @, 7.50%, 06/15/01 1,760 19,800 Eagle Tax Exempt Trust, Weekly Option Mode, Clark County, Ser. 98-2801, FRDO, #, 3.57%, 03/05/01 19,800 3,390 Nevada Housing Division, Multi-Unit Housing, Horizon, Ser. A, Rev., FRDO, 3.60%, 03/02/01 3,390 6,250 Nevada Housing Division, Multi-Unit Housing, Joshua Villas, Ser. E, Rev., FRDO, 3.60%, 03/02/01 6,250 5,455 Nevada Housing Division, Multi-Unit Housing, Judith Villas, Ser. C, Rev., FRDO, 3.60%, 03/01/01 5,455 6,750 Nevada Housing Division, Multi-Unit Housing, Ser. A, Rev., FRDO, 3.60%, 03/01/01 6,750 3,195 Nevada Housing Division, Multi-Unit Housing, Ser. M, Rev., FRDO, 3.60%, 03/05/01 3,195 4,400 Nevada State, Municipal Securities Trust Receipts, Ser. SGB-31, GO, FRDO, 3.57%, 03/07/01 4,400 4,350 Reno, Nevada, Hospital, St Mary's Regional Medical, Ser. B, Rev., FRDO, 3.30%, 03/01/01 4,350 -------- 58,650 New Hampshire -- 0.4% 4,060 New Hampshire State, Housing Finance Authority, Single Family Housing, FLOATS, Ser. PA-744, FRDO, 3.67%, 03/06/01 4,060 2,925 New Hampshire State, Housing Finance Authority, Single Family, FLOATS, Ser. PT-115, Rev., FRDO, 3.64%, 03/06/01 2,925 -------- 6,985 See notes to financial statements. 32 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- New Jersey -- 1.5% $ 2,825 Hudson County, New Jersey, Ser. A-9, Regulation D, COP, FRDO, 3.10%, 03/07/01 $ 2,825 10,405 New Jersey State, Sports & Exposition Authority, FLOATS, Ser. PA-649R, Rev., FRDO, 3.32%, 03/02/01 10,405 1,500 New Jersey State, Sports & Exposition Authority, State Contract, Ser. C, Rev., FRDO, 3.20%, 03/05/01 1,500 4,000 New Jersey State, TRAN, 3.45%, 04/05/01 4,000 7,495 New Jersey State, Transportation Corp., FLOATS, COP, Ser. PA-801, Rev., FRDO, 3.40%, 03/01/01 7,495 -------- 26,225 New Mexico -- 0.9% 1,085 Albuquerque, New Mexico, Ser. C, GO, 5.20%, 07/01/01 1,092 300 Farmington, New Mexico, PCR, Arizona Public Services Co., Ser. A, Rev., FRDO, 3.10%, 03/01/01 300 5,000 New Mexico State, Rev., TRAN, 5.00%, 06/29/01 5,011 8,000 New Mexico State, TRAN, Ser. A, Rev., 5.00%, 06/29/01 8,022 -------- 14,425 New York -- 4.9% 1,090 Eagle Tax-Exempt Trust, Weekly Option Mode, Ser. 96C-4901, Class A, FRDO, #, 3.59%, 03/07/01 1,090 1,305 Fort Plain, New York, Central School District, GO, @, 4.75%, 06/15/01 1,306 9,320 IBM Tax Exempt Grantor Trust, IBM Project, FLOATS, Weekly Receipt, FRDO, 3.72%, 03/07/01 9,320 3,000 Jamestown, New York, City School District, GO, 4.90%, 06/15/01 3,003 1,520 Monroe County, New York, Airport Authority, FLOATS, Ser. PA-585, Rev., FRDO, 3.40%, 03/01/01 1,520 16,300 Nassau County, New York, Ser. B, GO, RAN, 6.00%, 03/20/01 16,313 8,900 New York City, New York, Trust Cultural Resources, American Museum of National History, Ser. B, Rev., FRDO, 4.50%, 07/01/01 8,900 19,300 New York State, Dorm Authority, Columbia University, Ser. A, Rev., FRDO, 3.70%, 03/07/01 19,300 9,965 New York, Municipal Securities Trust Receipts, Ser. 2000-98, Class A, Rev., FRDO, 3.24%, 03/07/01 9,965 15,000 Onondaga County, New York, IDA, Solid Waste Disposal Facilities, Solvay Paperboard Project, Ser. A, FRDO, 4.25%, 12/06/01 15,000 1,020 Rome, New York, City School District, GO, 5.38%, 06/15/01 1,023 -------- 86,740 North Carolina -- 1.4% 7,000 Durham, North Carolina, Housing Authority, Multi-Family Housing, FLOATS, Ser. PT-1258, Rev., FRDO, 3.82%, 03/02/01 7,000 2,000 Gaston County, North Carolina, Industrial Facilities & Pollution Control Financing Authority, Industrial Development, Quality Metal Project, Rev., FRDO, 3.65%, 03/06/01 2,000 See notes to financial statements. 33 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- North Carolina -- Continued $ 800 Guilford County, North Carolina, Industrial Facilities & Pollution Control Financing Authority, Neal Manufacturing, Rev., FRDO, 3.65%, 03/05/01 $ 800 5,350 Mecklenburg County, North Carolina, COP, FRDO, 3.55%, 03/05/01 5,350 3,300 Mecklenburg County, North Carolina, Public Improvement, Ser. C, GO, FRDO, 3.10%, 03/07/01 3,300 3,000 North Carolina, Medical Care Commission, Catholic Health East, Ser. D, Rev., FRDO, 3.10%, 03/07/01 3,000 3,000 North Carolina, Medical Care Commission, Lincoln Health Systems Project, Ser. A, Rev., FRDO, 3.55%, 03/05/01 3,000 --------- 24,450 North Dakota -- 1.0% 2,160 Burleigh County, North Dakota, Health Care, Medical Center One Inc., Rev, 5.00%, 05/01/01 2,162 16,000 North Dakota State, Housing Finance Agency, Housing Finance Program, Home Mortgage, Ser. D, Rev., @, 4.45%, 08/27/01 16,000 --------- 18,162 Ohio -- 0.9% 1,505 American Municipal Power-Ohio Inc., Omega JV2 Project, Rev., 4.25%, 01/01/02 1,518 4,600 Columbus, Ohio, Ser. 1, GO, FRDO, 3.35%, 03/01/01 4,600 4,900 Ohio Housing Finance Agency, Residential Mortgage, Ser. C, Rev., FRDO, 4.35%, 09/01/01 4,900 1,125 Ohio State, Air Quality Development Authority, PCR, Ohio Edison Project, Ser. C, Rev., FRDO, 3.20%, 03/01/01 1,125 2,800 Ohio State, Water Development Authority, PCR, Ohio Edison Co. Project, Ser. B, Rev., FRDO, 3.20%, 03/01/01 2,800 1,330 Ohio State, Water Development Authority, Pollution Control Facilities, Water Control Loan Fund, State Match, Rev., 5.50%, 06/01/01 1,333 --------- 16,276 Oklahoma -- 1.3% 6,000 Norman, Oklahoma, Regional Hospital Authority, Rev. ^, 6.90%, 09/01/01 6,153 10,000 Oklahoma State, Water Resource Board, State Loan Program, Rev., FRDO, +, 4.30%, 09/04/01 10,000 6,500 Tulsa, Oklahoma, IDA, Justin Industries Project, Rev., FRDO, 3.85%, 03/01/01 6,500 --------- 22,653 Oregon -- 1.7% 8,200 Oregon State, Housing & Community Services Department, Convent Retirement, Ser. A, Rev., FRDO, 3.60%, 03/06/01 8,200 5,240 Oregon State, Housing & Community Services Department, Single Family Mortgage Program, Ser. C, Rev., 4.25%, 09/27/01 5,240 See notes to financial statements. 34 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Oregon -- Continued $ 3,665 Oregon State, Housing & Community Services Department, Single Family Mortgages, Ser. J, Rev., 4.35%, 03/01/01 $ 3,665 5,000 Oregon State, Ser. A-18, Regulation D, FRDO, 3.35%, 03/07/01 5,000 3,250 Oregon State, Veterans Welfare, Ser. 80-B, Rev., 4.35%, 10/01/01 3,250 3,470 Port Portland, Oregon, Airport, Ser. 7-A, Rev., ^, 6.75%, 07/01/01 3,528 800 Port Portland, Oregon, PCR, Reynold Metals, Rev., FRDO, 3.10%, 03/01/01 800 -------- 29,683 Pennsylvania -- 2.6% 4,000 Allegheny County, Pennsylvania, Ser. C-51, GO,, 4.25%, 05/01/01 4,000 3,900 Butler County, Pennsylvania, Hospital Authority, North Hills Passavant Hospital, Ser. A, Rev., ^, 7.00%, 06/01/01 3,999 100 Delaware Valley, Pennsylvania, Regional Finance Authority, Local Government, Rev., FRDO, 3.10%, 03/07/01 100 5,900 Eagle Tax Exempt Trust, Weekly Option Mode, Class A, FRDO, #, 3.57%, 03/01/01 5,900 2,000 Harrisburg, Pennsylvania, Water Authority, Municipal Securities Trust Receipts, Ser. SGA-80, Rev., FRDO, 3.24%, 03/07/01 2,000 11,500 Pennsylvania State, Higher Education Assistance Agency, Student Loan, Ser. E, Rev. FRDO, 3.25%, 03/05/01 11,500 4,230 Philadelphia, Pennsylvania, Authority for Industrial Development, Airport, FLOATS, Ser. PT-417, Rev.,, 4.55%, 06/14/01 4,230 3,000 Philadelphia, Pennsylvania, Municipal Authority, Ser. N-14, Regulation D, Rev., FRDO, 3.20%, 03/07/01 3,000 5,000 Philadelphia, Pennsylvania, Ser. A, Rev., TRAN, @, 5.00%, 06/29/01 5,010 3,795 Quakertown, Pennsylvania, General Authority, Pooled Financing Program, Ser. A, Rev., FRDO, 3.20%, 03/01/01 3,795 1,600 South Fork, Pennsylvania, Hospital Authority, Conemaugh Health Systems, Ser. A, Rev., FRDO, 3.15%, 03/01/01 1,600 500 Southeastern Pennsylvania, Transportation Authority, Special Ser. SG-28, 3.47%, 03/02/01 500 -------- 45,634 Rhode Island -- 1.2% 4,995 Rhode Island Refunding Bond Authority, State Public Projects, FLOATS, Ser. PT-419, Rev., 4.50%, 06/14/01 4,995 15,650 Rhode Island, Convention Center Authority, Ser. A. Rev. ^, 6.70%, 05/15/01 16,040 -------- 21,035 See notes to financial statements. 35 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- South Carolina -- 3.6% $ 3,000 Cherokee County, South Carolina, Industrial Revenue, Oshkosh Truck Project, Rev., FRDO, 3.35%, 03/07/01 $ 3,000 2,150 Florence County, South Carolina, Solid Waste Disposal & Wastewater Treatment, Roche Carolina Inc., Rev., FRDO, 3.35%, 03/01/01 2,150 3,500 Kershaw County, South Carolina, IDR, New South Inc. Project, Rev., FRDO, 3.60%, 03/07/01 3,500 5,210 South Carolina State, Housing, Finance & Development, Rental Housing, Oak Ridge/McGuire, FRDO, 3.50%, 03/07/01 5,210 3,045 South Carolina State, Housing, Finance & Development, Rental Housing, Waverly Place project, Rev., FRDO, 3.50%, 03/01/01 3,045 2,000 South Carolina State, Public Service Authority, Municipal Trust Receipts, Ser. SG-32, Rev., FRDO, ^, 3.54%, 03/01/01 2,006 23,100 South Carolina Transportation Infrastructure Bank, Floating Rate Trust Receipts, Ser. L-10, Regulation D, Rev., FRDO, 3.30%, 03/07/01 23,100 11,000 South Carolina Transportation Infrastructure Bank, Municipal Trust Receipts, Ser. SGA-116, Rev., FRDO, 3.20%, 03/01/01 11,000 3,500 South Carolina, Jobs Economic Development Authority, Catholic Diocese, South Carolina Project, Rev., FRDO, 3.60%, 03/01/01 3,500 3,000 South Carolina, Jobs Economic Development Authority, Concept Packaging Group Project, Rev., FRDO, 3.70%, 03/02/01 3,000 4,750 South Carolina, Jobs Economic Development Authority, Walley Proteins Inc. Project, FRDO, 3.65%, 03/01/01 4,750 -------- 64,261 South Dakota -- 1.5% 4,710 South Dakota Economic Development Finance Authority, Hastings Filters Inc. Project, Rev., FRDO, 3.55%, 03/05/01 4,710 12,855 South Dakota Housing Development Authority, FLOATS, Ser. PT-73, Rev., FRDO, 4.42%, 03/02/01 12,855 5,400 South Dakota, Housing Development Authority, Ser. D, Class A, FRDO, 3.62%, 03/07/01 5,400 4,500 South Dakota, Housing Development Authority, Ser. N-1, Regulation D, Rev., FRDO, 3.35%, 03/07/01 4,500 -------- 27,465 Tennessee -- 4.6% 800 Clarksville, Tennessee, Public Building Authority, Pooled Financing, Tennessee Municipal Bond Fund, Rev., FRDO, 3.55%, 03/05/01 800 3,000 Jackson, Tennessee, Industrial Development Board, Solid Waste Disposal, Steel Corp. Project, FRDO, 3.65%, 03/07/01 3,000 1,700 Knoxville, Tennessee, Utilities Board, Sub-Gas Systems, Rev., FRDO, 3.15%, 03/01/01 1,700 See notes to financial statements. 36 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Tennessee -- Continued $ 5,995 Metropolitan Government Nashville & Davidson Counties,Tennessee, FLOATS, Ser. PT-394, Rev., FRDO, 4.45%, 03/07/01 $ 5,995 2,700 Metropolitan Government of Nashville & Davidson Counties, Tennessee, Industrial Development Board, Country Music Hall of Fame, Rev., FRDO, 3.40%, 03/06/01 2,700 1,000 Metropolitan Government of Nashville & Davidson Counties, Tennessee, Water & Sewer, Rev., ^, 6.00%, 01/01/02 1,041 5,980 Nashville & Davidson County, Tennessee, Metropolitan Government Water and Sewer, Ser. L-23, Regulation D, FRDO, 3.30%, 03/06/01 5,980 1,500 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. II-A-1, Rev., FRDO, 3.45%, 03/06/01 1,500 2,500 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. II-A-2, Rev., FRDO, 3.45%, 03/06/01 2,500 4,000 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. II-D-2, Rev., FRDO, 3.45%, 03/01/01 4,000 1,160 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. II-D-3, Rev., FRDO, 3.45%, 03/01/01 1,160 6,800 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. III-C-5, Rev., FRDO, 3.45%, 03/06/01 6,800 1,600 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. III-D-3, Rev., FRDO, 3.45%, 03/05/01 1,600 5,000 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. III-E-2, Rev., FRDO, 3.45%, 03/05/01 5,000 2,500 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. III-E-3, Rev., FRDO, 3.45%, 03/05/01 2,500 5,500 Sevier County, Tennessee, Public Building Authority, Local Government Public Improvement, Ser. III-G-2, Rev., FRDO, 3.45%, 03/07/01 5,500 5,465 Shelby County, Tennessee, Health, Educational & Housing Facilities Board, Educational Facilities, Rhodes College, Rev., FRDO, 3.40%, 03/05/01 5,465 7,295 Smyrna, Tennessee, Housing Association Inc., Multi-Family Housing, Ser. Q, Class A, Rev., FRDO, 3.57%, 03/01/01 7,296 700 South Pittsburgh, Tennessee, Industrial Development Board, Lodge Manufacturing Co. Project, Rev., FRDO, 3.60%, 03/07/01 700 3,635 Tennessee Housing Development Agency, FLOATS, Ser. PA-726R, Rev., FRDO, 3.62%, 03/06/01 3,635 13,250 Tennessee, Housing Development Agency, FLOATS, Ser. PT-279, Rev., FRDO, 4.30%, 04/05/01 13,250 -------- 82,122 See notes to financial statements. 37 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Texas -- 15.0% $ 5,000 Alamo, Texas, Independent School District, Pharr-San Juan, Municipal Securities Trust Receipts, Ser. SGA-101, GO, FRDO, 3.24%, 03/01/01 $ 5,000 2,000 Austin, Texas, Independent School District, GO, 5.20%, 08/01/01 2,006 1,000 Brazos River Authority, Texas, PCR, TXU Electric Co., Ser. C, Rev., FRDO, 3.25%, 03/07/01 1,000 9,200 Carroll, Texas, Independent School District, GO, FRDO, 3.50%, 03/01/01 9,200 5,000 Dallas-Fort Worth, Texas, International Airport Facilities Improvement Corp., Flight Safety Project, Rev., FRDO, 3.60%, 03/02/01 5,000 1,955 Dallas-Fort Worth, Texas, Regional Airport, Municipal Securities Trust Receipts, Ser. SGA-49, Rev., FRDO, 3.20%, 03/01/01 1,955 3,910 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 99-4302, #, FRDO, 3.57%, 03/05/01 3,910 2,420 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 3C-7, Class A, FRDO, #, 3.57%, 03/05/01 2,420 1,200 Grapevine, Texas, Industrial Development Corp., Multiple Mode, American Airlines, Ser. A-4, Rev., FRDO, 3.10%, 03/01/01 1,200 5,000 Greater East Texas, Higher Education, Ser. B, FRDO, 3.45%, 02/01/02 5,000 10,000 Greater Texas, Student Loan Corp., Student Loan, Ser. A, Rev., 3.45%, 02/01/02 10,000 3,000 Guadalupe Blanco River Authority, Texas, IDC, IDR, The BOC Group Inc. Project, Rev., FRDO, 3.50%, 03/06/01 3,000 4,300 Gulf Coast Waste Disposal Authority, Amoco Oil Co. Project, Rev., FRDO, 3.30%, 03/01/01 4,300 5,000 Harlandale, Texas, Independent School District, Municipal Securities Trust Receipts, Ser. SGA-100, GO, FRDO, 3.24%, 03/02/01 5,000 5,200 Harris County, Texas, GO, 3.30%, 06/07/01 5,200 7,500 Harris County, Texas, GO, 3.35%, 06/06/01 7,500 1,100 Harris County, Texas, IDC, Shell Oil Co. Project, FRDO, 3.10%, 03/01/01 1,100 7,600 Hays, Texas, Memorial Health Facilities Development Corp., Central Texas Medical Center Project, Ser. A, Rev., 3.60%, 03/05/01 7,600 3,000 Houston, Texas, Independent School District, Ser. A, GO, 5.40%, 06/01/01 3,014 3,900 Katy, Texas, Independent School District, Ser, A, GO, FRDO, 3.50%, 03/07/01 3,900 6,010 Kerrville, Texas, Independent School District, FLOATS, Ser. PA-698, GO, FRDO, 3.54%, 03/01/01 6,010 1,300 Lone Star, Texas, Apartment Improvement Authority, Multiple Mode, Ser. B-1, Rev., FRDO, 3.20%, 03/01/01 1,300 4,200 Longview, Texas, Industrial Corp., Collins Industries Inc. Project, Rev., FRDO, 3.70%, 03/01/01 4,200 See notes to financial statements. 38 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Texas -- Continued $ 5,290 Mission, Texas, Independent School District, Municipal Securities Trust Receipts, Ser. SGA-105, GO, FRDO, 3.24%, 03/02/01 $ 5,290 5,000 North Central, Texas, Health Facilities Development Corp., Methodist Hospitals, 3.40%, 04/02/01 5,000 2,500 North Central, Texas, Health Facilities Development Corp., Methodist Hospitals, Dallas, Ser. B, Rev., FRDO, 3.15%, 03/01/01 2,500 25,000 North Central, Texas, Health Facilities Development Corp., Methodist Hospitals, Rev., FRDO, 4.20%, 03/06/01 25,001 3,700 North Texas, Higher Education Authority, Student Loan, Ser. A, Rev., FRDO, 3.25%, 03/01/01 3,700 8,000 North Texas, Higher Education Authority, Student Loan, Ser. B, Rev., FRDO, 3.25%, 03/07/01 8,000 1,400 North Texas, Higher Education Authority, Student Loan, Ser. F, Rev., FRDO, 3.25%, 03/06/01 1,400 1,000 Port Corpus Christi Authority, Texas, Nueces County, Solid Waste Disposal, Koch Refining Co. Project, FRDO, 3.15%, 03/05/01 1,000 4,700 Richardson, Texas, Independent School District, Ser. A, GO, FRDO, 3.50%, 03/01/01 4,700 7,190 San Angelo, Texas, Independent School District, GO, FRDO, 3.50%, 03/01/01 7,190 19,920 San Antonio, Texas, Electric & Gas, Municipal Securities Trust Receipts, Ser. SGA-48, Rev., FRDO, 3.24%, 03/02/01 19,920 5,000 San Antonio, Texas, Water Revenue, Municipal Securities Trust Receipts, Ser. SGA-42, Rev., FRDO, 3.24%, 03/05/01 5,000 8,430 Tarrant County, Texas, Housing Finance Corp, Multi-Family Housing, Remington Project, Rev., FRDO, 3.15%, 03/05/01 8,430 10,470 Texas Board of Water Development, Municipal Securities Trust Receipts, Ser. SGA-104, Rev., FRDO, 3.24%, 03/06/01 10,470 11,000 Texas State, 3.35%, 05/09/01 11,000 1,100 Texas State, Department of Housing & Community Affairs, Multi-Family Housing, Timber Point Apartments, Ser. A-1, Rev., FRDO, 3.25%, 03/05/01 1,100 5,565 Texas State, Department of Housing & Community Affairs, Residential Mortgage, FLOATS, Ser. PA-743R, Rev., FRDO, 3.64%, 03/01/01 5,565 4,910 Texas State, FLOATS, Ser. PT-1991, Rev., FRDO, 3.59%, 03/07/01 4,910 12,900 Texas State, Rev., TRAN, 5.25%, 08/31/01 12,961 3,000 Texas State, Turnpike Authority, Dallas North Thruway, Floating Rate Receipts, Ser. SG-70, Rev., FRDO, 3.54%, 03/07/01 3,000 4,300 Texas State, Veteran's Housing Assistance, Ser. A-1, GO, FRDO, 3.35%, 03/06/01 4,300 See notes to financial statements. 39 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Texas -- Continued $ 5,000 Tyler, Texas, Waterworks & Sewer, Municipal Securities Trust Receipts, Ser. SGA-112, Rev., FRDO, 3.20%, 03/01/01 $ 5,000 14,290 University of Texas, Municipal Securities Trust Receipts, Ser. SGA-78, Rev., FRDO, 3.24%, 03/06/01 14,290 --------- 268,542 Utah -- 1.3% 5,000 Intermountain Power Agency of Utah, Power Supply, Ser. 1985, Rev., 3.40%, 04/02/01 5,000 7,500 Utah State, Housing Finance Agency, Single Family Mortgage, Ser. D-1, Rev., FRDO, 3.30%, 03/05/01 7,500 5,000 Utah State, Housing Finance Agency, Single Family Mortgage, Ser. E-1, Rev., FRDO, 3.30%, 03/06/01 5,000 5,000 Utah State, Housing Finance Agency, Single Family Mortgage, Ser. F-2, Class I, Rev., FRDO, 3.30%, 03/05/01 5,000 --------- 22,500 Virginia -- 1.3% 2,000 Harrisonburg, Virginia, Redevelopment & Housing Authority, Multi-Family Housing, Misty Ridge Project, Ser. A, Rev., FRDO, 3.58%, 03/05/01 2,000 6,170 King George County, Virginia, IDA, Exempt Facilities, Birchwood Power Partners, Ser. B, Rev., FRDO, 3.35%, 03/01/01 6,170 3,225 Petersburg, Virginia, Hospital Authority, Hospital Facilities, Southside Regional, Rev., FRDO, 3.25%, 03/01/01 3,225 11,385 Virginia State, Public School Authority, FLOATS, Ser. PT-431, Rev. FRDO, 3.47%, 03/06/01 11,385 --------- 22,780 Washington -- 5.2% 12,150 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. A, FRDO, 3.57%, 03/01/01 12,150 15,830 King County, Washington, FLOATS, Ser. PT-385, Rev., FRDO, 3.33%, 03/02/01 15,830 950 King County, Washington, Housing Authority, Auburn Court Apartments Project, Rev., FRDO, 3.65%, 03/07/01 950 2,290 King County, Washington, School District No. 414, Lake Washington, GO, 5.00%, 12/01/01 2,300 5,000 Port Anacortes, Washington, Industrial Revenue, Texaco Project, Rev., FRDO, 3.40%, 03/01/01 5,000 2,000 Port Townsend, Washington, Industrial Development, Port Townsend Paper Corp., Ser. A, Rev., FRDO, 3.65%, 03/05/01 2,000 1,050 Redmond, Washington, Public Corp., Industrial Revenue, Integrated Circuits Project, Rev., FRDO, 3.50%, 03/01/01 1,050 1,275 Seattle, Washington, Housing Authority, Low Income Housing Assistance, Bayview Manor Project, Ser. B, Rev., FRDO, 3.50%, 03/07/01 1,275 See notes to financial statements. 40 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Washington -- Continued $ 8,955 Seattle, Washington, Municipal Light & Power, Municipal Securities Trust Receipts, Ser. SGA-96, Rev., FRDO, 3.20%, 03/01/01 $ 8,956 1,000 Seattle, Washington, Port Authority, Ser. B, Rev., 6.10%, 11/01/01 1,018 8,200 Snohomish County, Washington, Public Utilities District No. 001, Municipal Securities Trust Receipts, Ser. SGA-124, Rev., FRDO, 3.20%, 03/01/01 8,200 14,500 Tacoma, Washington, Rev., 3.30%, 05/23/01 14,500 1,705 Washington State, Housing Finance Commission, Single Family Program, Ser. 2-A-S, Rev., 4.40%, 04/01/01 1,705 2,900 Washington State, Housing Finance Commission, Spokane Community College Foundation, Ser. A, Rev., FRDO, 3.55%, 03/02/01 2,900 4,000 Washington State, Public Power Supply System, Nuclear Project No. 1, Ser. A, Rev., ^, 6.88%, 07/01/01 4,107 6,860 Washington State, Public Power Supply Systems, Nuclear Project No. 1, Ser. C, Rev., 7.63%, 07/01/01 6,942 1,200 Washington State, Ser. R-96-B, GO, 5.50%, 07/01/01 1,209 2,220 Washington State, Ser. R-98-B, GO, 4.00%, 07/01/01 2,225 -------- 92,317 West Virginia -- 0.4% 2,000 West Virginia School Building Authority, Capital Improvement, Ser. A, Rev., ^, 6.75%, 07/01/01 2,061 5,765 West Virginia State, Building Commission, FLOATS, Ser. PA-520, Rev., FRDO, 3.62%, 03/01/01 5,765 -------- 7,826 Wisconsin -- 2.6% 5,520 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 94-4904, FRDO, #, 3.59%, 03/05/01 5,520 1,150 Milwaukee County, Wisconsin, Ser. A, GO, 4.50%, 10/01/01 1,151 14,455 Municipal Securities Trust Certificates, Ser. 1999-70, Class A, Rev., FRDO, 3.24%, 03/06/01 14,455 2,500 University of Wisconsin, Hospital & Clinics Authority, Rev., FRDO, 3.20%, 03/01/01 2,500 3,250 Wisconsin Housing & Economic Development Authority, Home Ownership, Floating Rate Trust Receipts, Ser. 18, Rev., FRDO, 3.40%, 03/07/01 3,250 7,220 Wisconsin Public Power Inc. System, Power Supply System, Municipal Securities Trust Receipts, Ser. SGA-2, Rev., FRDO, 3.24%, 03/05/01 7,250 5,000 Wisconsin State, Clean Water, Ser. 1, Rev., ^, 6.75%, 06/01/01 5,124 7,200 Wisconsin State, Health & Education Facilities Authority, Ser. 1998-A, Rev., 3.70%, 03/07/01 7,200 -------- 46,450 See notes to financial statements. 41 JPMorgan Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Money Market Instruments -- Continued - -------------------------------------------------------------------------------- Wyoming -- 1.2% $ 2,000 Lincoln County, Wyoming, PCR, Exxon Project, Ser. B, Rev., FRDO, 3.10%, 03/01/01 $ 2,000 400 Uinta County, Wyoming, PCR, Chevron U.S.A. Inc. Project, Rev., FRDO, 3.05%, 03/01/01 400 14,700 Wyoming Community Development Authority, Housing, FLOATS, Ser. PT-195, Rev., FRDO, 4.45%, 03/05/01 14,700 3,600 Wyoming Community Development Authority, Housing, Ser. 2, Rev., 3.75%, 06/01/01 3,600 ---------- 20,700 ------------------------------------------------------------------ Total Municipal Securities 1,775,477 (Cost $1,775,477) - -------------------------------------------------------------------------------- Total Investments -- 100.0% $1,776,577 (Cost $1,776,577)* - -------------------------------------------------------------------------------- See notes to financial statements. 42 - -------------------------------------------------------------------------------- JPMorgan New York Tax Free Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Shares Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- 99.9% - -------------------------------------------------------------------------------- California -- 0.1% $ 300 Coronado, California, Community Development Agency, Coronado Community Development Project, Tax Allocation, ^, 6.30%, 09/01/01 $ 309 1,000 Oxnard, California, Industrial Development Financing Authority, IDR, Accurate Engineering Project, Rev., FRDO, 2.40%, 03/07/01 1,000 -------- 1,309 Maryland -- 0.2% 4,100 Maryland State, Stadium Authority, Sports Facilities Lease, Rev., FRDO, 3.25%, 03/07/01 4,100 New York -- 99.6% 12,000 ABN AMRO Munitops, Certificates Trust, New York, Ser. 1999-13, FRDO, #, 3.13%, 03/07/01 12,000 11,530 Albany, New York, GO, BAN, 5.00%, 08/03/01 11,546 570 Albany, New York, IDA, IDR, Newkirk Productions Inc. Project, Ser. A, Rev., FRDO, 3.40%, 03/01/01 570 6,182 Allegany-Limestone, New York, Central School District, GO, BAN, 3.50%, 02/06/02 6,192 2,500 Arcade, New York, GO, BAN, 5.00%, 09/13/01 2,506 1,125 Attica, New York, Central School District, GO, BAN, 4.30%, 06/15/01 1,128 8,000 Attica, New York, Central School District, GO, BAN, @, 5.00%, 04/18/01 8,005 8,915 Attica, New York, Central School District, GO, BAN, 5.00%, 06/15/01 8,923 1,450 Babylon, New York, IDA, IDR, Edwin Berger/Lambro Industries, Rev., FRDO, 3.10%, 03/07/01 1,450 8,800 Babylon, New York, IDA, Resource Recovery, OFS Equity Babylon Project, Rev., FRDO, 3.10%, 03/01/01 8,800 1,850 Bath, New York, Central School District, GO, 5.00%, 06/15/01 1,853 3,000 Beekmantown, New York, Central School District, GO, BAN, 5.00%, 06/29/01 3,004 2,000 Bethpage, New York, Union Free School District, GO, BAN, 3.75%, 09/13/01 2,003 6,000 Board of Cooperative Educational Services, New York, Sole Supervisory District, GO, RAN, 5.00%, 06/27/01 6,007 9,620 Board of Cooperative Educational Services, New York, Sole Supervisory District, GO, RAN, @, 5.00%, 06/29/01 9,628 4,000 Board of Cooperative Educational Services, New York, Sole Supervisory District, GO, RAN, @, 5.25%, 06/22/01 4,005 9,950 Board of Cooperative Educational Services, New York, Sole Supervisory District, Rev., RAN, 4.50%, 12/28/01 9,978 7,500 Board of Cooperative Educational Services, New York, Sole Supervisory District, Ser. A, GO, RAN, 5.00%, 06/22/01 7,507 3,300 Brentwood, New York, Union Free School District, GO, TAN, 5.00%, 06/29/01 3,307 See notes to financial statements. 43 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 795 Brockport, New York, Central School District, GO, 5.40%, 06/15/01 $ 797 2,771 Brookhaven, New York, IDA, IDR, Waverly Association LLC, Rev., FRDO, 3.60%, 03/01/01 2,771 1,000 Broome County, New York, GO, BAN, 4.75%, 04/03/01 1,001 700 Broome County, New York, IDA, IDR, Binghamton Realty Project, Rev., FRDO, 3.00%, 03/07/01 700 3,075 Camden, New York, Central School District, GO, RAN, 5.00%, 06/29/01 3,079 3,544 Carthage, New York, Central School District, GO, RAN,5.00%, 06/22/01 3,547 2,670 Chautauqua County, New York, GO, BAN, ^, 4.50%, 03/06/01 2,670 9,400 Chautauqua Lake, New York, Central School District, GO, BAN, @, 4.50%, 03/15/01 9,401 9,000 Chemung County, New York, GO, RAN, 4.75%, 05/15/01 9,007 1,525 Chittenango, New York, Central School District, GO, RAN, @, 5.00%, 06/29/01 1,527 5,000 Cortland, New York, City School District, GO, RAN, 5.00%, 06/29/01 5,007 2,900 Dutchess County, New York, IDA, Civic Facility, Marist College, Ser. A, Rev., FRDO, 3.40%, 03/01/01 2,900 2,450 Dutchess County, New York, IDA, IDR, Laerdal Medical Corp. Project, Rev., FRDO, 3.25%, 03/07/01 2,450 5,990 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 3C-7, Class A, FRDO, #, 3.49%, 03/01/01 5,990 10,000 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 94-3203, Class A, FRDO, #, 3.49%, 03/01/01 10,000 8,805 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 94-3205, Class A, FRDO, #, 3.49%, 03/01/01 8,805 9,910 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 94-3208, Class A, FRDO, #, 3.49%, 03/01/01 9,910 20,880 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 95-3202, Class A, FRDO, #, 3.49%, 03/01/01 20,880 18,900 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 95-3203, Class A, FRDO, #, 3.49%, 03/01/01 18,900 12,155 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 96-3207, Class A, FRDO, #, 3.49%, 03/01/01 12,155 11,000 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 96C-3203, Class A, FRDO, #, 3.49%, 03/01/01 11,000 14,850 Eagle Tax Exempt Trust, Weekly Option Mode, Ser. 96C-3208, Class A, FRDO, #, 3.49%, 03/01/01 14,850 4,000 East Greenbush, New York, Ser. D, GO, BAN, 4.63%, 09/26/01 4,004 8,200 Eastern Suffolk, New York, Board of Cooperative Educational Services District, GO, RAN, @, 5.00%, 06/28/01 8,209 650 Elba, New York, Central School District, GO, 5.50%, 06/15/01 651 4,000 Elmira City, New York, School District, Ser. A, GO, BAN, 5.00%, 06/27/01 4,007 2,700 Erie County, New York, Water Authority, Ser. A, Rev., FRDO, 2.80%, 03/07/01 2,700 See notes to financial statements. 44 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 1,400 Erie County, New York, Water Authority, Ser. B, Rev., FRDO, 2.80%, 03/07/01 $ 1,400 6,956 Gananda, New York, Central School District, GO, BAN, 4.75%, 12/20/01 6,971 530 Glens Falls, New York, IDA, IDR, Broad Street Center Project, Rev., FRDO, 2.95%, 03/07/01 530 1,955 Glenville, New York, GO, BAN, 5.00%, 07/13/01 1,958 9,700 Gorham-Middlesex, New York, Central School District, GO, BAN, 3.25%, 01/25/02 9,727 713 Goshen, New York, Central School District, GO, +, 4.00%, 06/15/01 714 4,010 Great Neck North, New York, Water Authority, Water System, Ser. A, Rev., FRDO, 2.90%, 03/07/01 4,010 1,100 Guilderland, New York, IDA, IDR, Northeastern Industrial Park, Ser. A, Rev., FRDO, 3.00%, 03/07/01 1,100 2,000 Hempstead, New York, Union Free School District, GO, RAN, 4.75%, 06/15/01 2,002 2,000 Hempstead, New York, Union Free School District, GO, TAN, @, 5.25%, 06/28/01 2,004 6,435 Highland Falls-FT Montgomery, New York, Central School District, GO, BAN, 4.75%, 07/16/01 6,441 3,550 Hilton, New York, Central School District, GO, RAN, 5.00%, 04/26/01 3,552 4,748 Honeoye, New York, Central School District, GO, BAN, 4.50%, 12/28/01 4,760 1,890 Ilion, New York, Central School District, GO, BAN, 5.00%, 03/29/01 1,891 3,256 Ilion, New York, Central School District, GO, RAN, 5.00%, 06/29/01 3,261 2,000 Islip, New York, IDA, Brentwood Distribution Co. Facility, Rev., FRDO, 3.50%, 03/01/01 2,000 8,000 Lakeland, New York, Central School District, Shrub Oak, Ser. A, GO, BAN, 4.75%, 11/21/01 8,021 5,060 Lisbon, New York, Central School District, GO, BAN, 4.75%, 04/27/01 5,062 10,000 Livonia, New York, Central School District, GO, BAN, 5.00%, 06/19/01 10,018 8,780 Long Island Power Authority, New York, Electric Systems, Floating Rate Receipts, Ser. SG-125, Rev., FRDO, 3.40%, 03/01/01 8,780 40,000 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 2, Rev., FRDO, 2.95%, 03/07/01 40,001 12,500 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 3, Rev., FRDO, 3.38%, 04/09/01 12,500 8,300 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 3, Rev., FRDO, 3.40%, 04/02/01 8,300 13,900 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 3, Rev., FRDO, 3.60%, 03/07/01 13,900 16,000 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 3, Rev., FRDO, 4.15%, 04/09/01 16,000 8,900 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 7, Sub. Ser. 7-B, Rev., FRDO, 2.95%, 03/07/01 8,900 See notes to financial statements. 45 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 11,000 Long Island Power Authority, New York, Electric Systems, Sub. Ser. 7-B, Rev., FRDO, 3.30%, 03/08/01 $ 11,000 8,110 Longwood Central School District, Suffolk County, New York, GO, TAN, @, 5.00%, 06/29/01 8,119 4,418 Mayfield, New York, Central School District, GO, BAN, 4.75%, 06/28/01 4,422 3,985 Metropolitan Transportation Authority, New York, Commuter Facilities, Municipal Securities Trust Receipts, Ser. SGA-82, Rev., FRDO, 3.12%, 03/07/01 3,985 6,815 Metropolitan Transportation Authority, New York, Dedicated Tax Fund, FLOATS, Ser. PA-683, Rev., FRDO, 3.37%, 03/01/01 6,815 9,425 Metropolitan Transportation Authority, New York, Dedicated Tax Fund, Municipal Securities Trust Receipts, Ser. SGA-81, Rev., FRDO, 3.12%, 03/07/01 9,425 18,500 Metropolitan Transportation Authority, New York, Transportation Facilities, Rev., 3.30%, 05/29/01 18,500 27,400 Metropolitan Transportation Authority, New York, Transportation Facilities, Special Obligation, Ser. CP-1, Rev., BAN, 2.75%, 04/05/01 27,400 4,400 Mexico, New York, Central School District, GO, RAN, 5.00%, 06/21/01 4,404 6,000 Mineola, New York, Union Free School District, GO, TAN, 4.75%, 06/29/01 6,027 10,000 Monroe County, New York, IDA, Civic Facilities, St. Anns Home For Aged Project, Rev., FRDO, 3.00%, 03/07/01 10,000 1,500 Monroe County, New York, IDA, Public Improvements, Canal Ponds Park, Ser. D, Rev., FRDO, 2.95%, 03/07/01 1,500 4,000 Mount Vernon, New York, City School District, GO, TAN, 5.00%, 08/30/01 4,010 10,335 Municipal Securities Trust Certificates, Ser. 2000-109, Class A, Rev., FRDO, 3.20%, 03/01/01 10,335 6,485 Municipal Securities Trust Certificates, Ser. 2000-89, Class A, Rev., FRDO, 3.20%, 03/01/01 6,485 17,500 Nassau County, New York, Interim Finance Authority, Municipal Securities Trust Receipts, Ser. SGA-108, FRDO, 3.20%, 03/07/01 17,500 3,755 New York City, New York, FLOATS, Ser. PA-148, FRDO, 3.52%, 03/01/01 3,755 36,000 New York City, New York, FLOATS, Ser. PT-1038, GO, FRDO, 3.40%, 03/01/01 36,000 9,245 New York City, New York, FLOATS, Ser. PT-405, GO, FRDO, 3.40%, 03/01/01 9,245 4,730 New York City, New York, Health & Hospital Corp., Health Systems, Ser. B, Rev., FRDO, 2.95%, 03/07/01 4,730 6,160 New York City, New York, Health & Hospital Corp., Health Systems, Ser. E, Rev., FRDO 6,160 17,255 New York City, New York, Health & Hospital Corp., Health Systems, Ser. F, Rev., FRDO, 2.95%, 03/07/01 17,255 6,100 New York City, New York, Housing Development Corp., Multi-Family Housing, 55 Pierrepont Development, Ser. A, Rev., FRDO, 2.95%, 03/07/01 6,100 See notes to financial statements. 46 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $16,370 New York City, New York, Housing Development Corp., Multi-Family Housing, Columbus Apartments, Ser. A, Rev., FRDO, 2.95%, 03/07/01 $ 16,370 8,300 New York City, New York, Housing Development Corp., Multi-Family Housing, James Tower Development, Ser. A, Rev., FRDO, 2.85%, 03/07/01 8,300 6,700 New York City, New York, Housing Development Corp., Multi-Family Housing, Marmion Avenue Project, Ser. A, Rev., FRDO, 3.00%, 03/07/01 6,700 9,000 New York City, New York, Housing Development Corp., Multi-Family Housing, Ogden Avenue Project, Ser. A, Rev., FRDO, 3.00%, 03/07/01 9,000 1,300 New York City, New York, Housing Development Corp., Multi-Family Housing, Sullivan Street Project, Ser. A, Rev., FRDO, 3.00%, 03/07/01 1,300 3,400 New York City, New York, Housing Development Corp., Multi-Family Rental Housing, 100 Jane Street Development, Ser. A, Rev., FRDO, 3.00%, 03/07/01 3,400 19,100 New York City, New York, Housing Development Corp., Multi-Family Rental Housing, Brittany Development, Ser. A, Rev., FRDO, 3.00%, 03/07/01 19,100 13,700 New York City, New York, Housing Development Corp., Multi-Family Rental Housing, Carnegie Park, Ser. A, Rev., FRDO, 2.95%, 03/07/01 13,700 27,000 New York City, New York, Housing Development Corp., Multi-Family Rental Housing, Monterey, Ser. A, Rev., FRDO, 2.95%, 03/07/01 27,000 5,600 New York City, New York, Housing Development Corp., Multi-Family Rental Housing, Tribeca Tower, Ser. A, Rev., FRDO, 3.00%, 03/07/01 5,600 2,250 New York City, New York, IDA, Civic Facilities, Columbia Grammar & Prep School, Rev., FRDO, 3.35%, 03/01/01 2,250 7,500 New York City, New York, IDA, Civic Facilities, Municipal Securities Trust Receipts, Ser. SGA-110, Rev., FRDO, 3.12%, 03/07/01 7,500 3,000 New York City, New York, IDA, Civic Facility, Calhoun School Inc. Project, Rev., FRDO, 3.40%, 03/01/01 3,000 3,400 New York City, New York, IDA, IDR, DXB Videotape Inc. Project, Rev., FRDO, 3.15%, 03/07/01 3,400 450 New York City, New York, IDA, IDR, Rev., FRDO, 3.05%, 03/07/01 450 12,000 New York City, New York, IDA, Solid Waste Facilities, U.S.A. Waste Services, New York City Project, Rev., FRDO, 3.40%, 03/01/01 12,000 5,900 New York City, New York, IDA, Special Facilities, Korean Airlines Co., Ser. C, Rev., FRDO, 3.00%, 03/07/01 5,900 1,300 New York City, New York, Municipal Securities Trust Receipts, Ser. SG-109, GO, FRDO, 3.40%, 03/01/01 1,300 See notes to financial statements. 47 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 800 New York City, New York, Municipal Securities Trust Receipts, Ser. SGB-33, GO, FRDO, 3.49%, 03/01/01 $ 800 12,865 New York City, New York, Municipal Securities Trust Receipts, Ser. SGB-36, GO, FRDO, 3.40%, 03/01/01 12,865 1,500 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, FLOATS, Ser. PA-454, Rev., FRDO, 3.37%, 03/01/01 1,500 3,000 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, FLOATS, Ser. PT-1032, Rev., FRDO, 4.60%, 03/01/01 3,000 9,685 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Municipal Securities Trust Receipts, Ser. SGA-12, Rev., FRDO, 3.12%, 03/07/01 9,685 7,255 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Municipal Securities Trust Receipts, Ser. SGA-13, Rev., FRDO, 3.12%, 03/07/01 7,255 2,390 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Municipal Securities Trust Receipts, Ser. SGB-25, Rev., FRDO, 3.49%, 03/01/01 2,390 18,200 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Municipal Securities Trust Receipts, Ser. SGB-26, Rev., FRDO, 3.49%, 03/01/01 18,200 3,700 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Municipal Securities Trust Receipts, Ser. SGB-27, Rev., FRDO, 3.49%, 03/01/01 3,700 4,000 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Rev., 2.25%, 03/07/01 4,000 15,960 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Ser. 11, Rev., FRDO, 3.10%, 03/07/01 15,960 2,270 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Ser. A, Rev., ^, 7.00%, 06/15/01 2,308 24,600 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Ser. A, Rev., FRDO, 2.95%, 03/01/01 24,600 7,700 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Ser. C, Rev., FRDO, 2.95%, 03/01/01 7,700 12,400 New York City, New York, Municipal Water Finance Authority, Water & Sewer Systems, Ser. G, Rev., FRDO, 3.00%, 03/01/01 12,400 5,000 New York City, New York, Ser. A, GO, RAN, 5.00%, 04/12/01 5,004 See notes to financial statements. 48 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 6,700 New York City, New York, Ser. B, Sub. Ser B-2, GO, FRDO, 2.95%, 03/01/01 $ 6,700 6,100 New York City, New York, Ser. B, Sub. Ser. B-4, GO, FRDO, 2.95%, 03/01/01 6,100 5,300 New York City, New York, Ser. B, Sub. Ser. B-6, GO, FRDO, 3.05%, 03/01/01 5,300 5,285 New York City, New York, Ser. B, Sub. Ser. B-8, GO, FRDO, 2.95%, 03/07/01 5,285 1,600 New York City, New York, Ser. B-2, Sub. Ser. B-5, GO, FRDO, 3.05%, 03/01/01 1,600 2,095 New York City, New York, Ser. F-4, GO, FRDO, 2.95%,03/07/01 2,095 12,100 New York City, New York, Ser. F-5, GO, FRDO, 2.95%,03/07/01 12,100 7,300 New York City, New York, Sub. Ser. A-5, GO, FRDO, 2.95%, 03/01/01 7,300 3,300 New York City, New York, Sub. Ser. E-4, GO, FRDO, 3.00%, 03/01/01 3,300 4,900 New York City, New York, Transit Authority, Metropolitan Transportation Authority, Triborough, Floating Rate Trust Receipts, Ser. PMD-10, COP, FRDO, 3.47%, 03/01/01 4,900 1,600 New York City, New York, Transitional Finance Authority, Floating Rate Trust Receipts, Ser. 95, Rev., FRDO, 3.47%, 03/01/01 1,600 6,000 New York City, New York, Transitional Finance Authority, Floating Rate Trusts Receipts, Ser. L-3, Regulation D, Rev., FRDO, 3.30%, 03/06/01 6,000 29,900 New York City, New York, Transitional Finance Authority, Floating Rate Trusts Receipts, Ser. N-4, Regulation D, Rev., FRDO, 3.30%, 03/06/01 29,900 9,610 New York City, New York, Transitional Finance Authority, Future Tax Secured, Ser. A, Rev., FRDO, 2.90%, 03/07/0 9,610 1,940 New York City, New York, Transitional Finance Authority, Future Tax Secured, Ser. A-1, Rev., FRDO, 2.90%, 03/07/01 1,940 44,300 New York City, New York, Transitional Finance Authority, Future Tax Secured, Ser. A-2, Rev., FRDO, 2.95%, 03/07/01 44,300 3,000 New York City, New York, Transitional Finance Authority, Future Tax Secured, Ser. C, Rev., FRDO, 3.05%, 03/01/01 3,000 2,250 New York City, New York, Transitional Finance Authority, Future Tax Secured, Sub. Ser. B-2, Rev., FRDO, 3.05%, 03/01/01 2,250 2,710 New York City, New York, Transitional Finance Authority, Future Tax Secured, Sub. Ser. B-3, Rev., FRDO, 2.90%, 03/07/01 2,710 7,400 New York City, New York, Trust Cultural Resources, American Museum of Natural History, Ser. B, Rev., FRDO, 2.80%, 03/07/01 7,400 2,672 New York City, New York, Trust Cultural Resources, Carnegie Hall, Rev., FRDO, 3.00%, 03/07/01 2,672 See notes to financial statements. 49 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 1,600 New York City, New York, Trust Cultural Resources, Ser. 162, Rev., FRDO, 3.47%, 03/01/01 $ 1,600 8,865 New York State, Commissioner of General Services Executive Department, +, COP, 4.00%, 03/01/02 8,920 3,400 New York State, Dorm Authority, Beaverwyck Inc., Rev., FRDO, 2.90%, 03/07/01 3,400 12,400 New York State, Dorm Authority, Columbia University, Ser. A, Rev., FRDO, 3.70%, 03/01/01 12,400 9,645 New York State, Dorm Authority, FLOATS, Ser. PA-409, Rev., FRDO, 3.37%, 03/01/01 9,645 13,870 New York State, Dorm Authority, FLOATS, Ser. PA-419, Rev., FRDO, 3.37%, 03/01/01 13,870 3,545 New York State, Dorm Authority, FLOATS, Ser. PA-449, Rev., FRDO, 3.37%, 03/01/01 3,545 9,340 New York State, Dorm Authority, FLOATS, Ser. PA-541, Rev., FRDO, 3.37%, 03/01/01 9,340 3,000 New York State, Dorm Authority, FLOATS, Ser. PA-640, Rev., FRDO, 3.37%, 03/01/01 3,000 990 New York State, Dorm Authority, FLOATS, Ser. PT-130, Rev., FRDO, 3.37%, 03/01/01 990 2,900 New York State, Dorm Authority, FLOATS, Ser. PT-1067, Rev., FRDO, 3.37%, 03/01/01 2,900 5,770 New York State, Dorm Authority, New York Public Library, Ser. A, Rev., FRDO, 2.95%, 03/07/01 5,770 3,100 New York State, Dorm Authority, New York Public Library, Ser. B, Rev., FRDO, 2.95%, 03/07/01 3,100 8,345 New York State, Energy Research & Development Authority, Facilities, FLOATS, Ser. PA-411, Rev., FRDO, 3.37%, 03/01/01 8,345 5,000 New York State, Energy Research & Development Authority, PCR, Annual Tender, New York State Electric & Gas, Rev., FRDO, 4.20%, 03/15/01 5,000 6,600 New York State, Energy Research & Development Authority, PCR, New York Electric & Gas, Ser. D. Rev., FRDO, 3.05%, 03/01/01 6,600 7,760 New York State, Energy Research & Development Authority, PCR, Niagara Mohawk Power Corp. Project, Ser. A, Rev., FRDO, 2.95%, 03/01/01 7,760 22,900 New York State, Energy Research & Development Authority, PCR, Niagara Mohawk Power Corp. Project, Ser. A, Rev., FRDO, 3.25%, 03/01/01 22,900 6,800 New York State, Energy Research & Development Authority, PCR, Niagara Mohawk Power Corp. Project, Ser. C, Rev., FRDO, 3.00%, 03/01/01 6,800 18,600 New York State, Energy Research & Development Authority, PCR, Orange & Rockland Utilities Project, Ser. A, Rev., FRDO, 2.80%, 03/07/01 18,600 3,500 New York State, Energy Research & Development Authority, PCR, Rochester Gas & Electric Corp., Ser. B, Rev., FRDO, 2.90%, 03/07/01 3,500 1,300 New York State, Energy Research & Development Authority, PCR, Rochester Gas & Electric Corp., Ser. C, Rev., FRDO, 2.80%, 03/07/01 1,300 See notes to financial statements. 50 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 1,200 New York State, Environmental Facilities Corp., OFS Equity Huntington Project, Rev., FRDO, 3.05%, 03/01/01 $ 1,200 3,675 New York State, Environmental Facilities Corp., PCR, State Water Revolving Fund, Ser. E, Rev., ^, 6.88%, 06/15/01 3,773 37,050 New York State, Housing Finance Agency, 101 West End Ave. Housing, Ser. A, Rev., FRDO, 3.00%, 03/07/0 37,050 26,000 New York State, Housing Finance Agency, 150 East 44th Street Housing, Ser. A, Rev., FRDO, 3.00%, 03/07/01 26,000 5,100 New York State, Housing Finance Agency, 345 East 94th Street Housing, Ser. A, Rev., FRDO, 2.90%, 03/07/01 5,100 1,850 New York State, Housing Finance Agency, 363 West 30th Street Housing, Ser. A, Rev., FRDO, 3.00%, 03/07/01 1,850 2,495 New York State, Housing Finance Agency, FLOATS, Ser. PA-143, Rev., FRDO, 3.49%, 03/01/01 2,495 8,820 New York State, Housing Finance Agency, FLOATS, Ser. PA-423, Rev., FRDO, 3.51%, 03/01/01 8,820 1,000 New York State, Housing Finance Agency, Multi-Family Housing, Liberty View, Ser. A, Rev., FRDO, 2.95%, 03/07/01 1,000 1,600 New York State, Housing Finance Agency, Multi-Family Housing, Ser. A, Rev., FRDO, 3.00%, 03/07/01 1,600 3,300 New York State, Housing Finance Agency, Multi-Family Housing, Ser. A, Rev., FRDO, 3.20%, 03/07/01 3,300 19,000 New York State, Housing Finance Agency, Normandie Court I Project, Rev., FRDO, 2.85%, 03/07/01 19,000 5,100 New York State, Housing Finance Agency, Residential, Ser. A, Rev., FRDO, 3.20%, 03/07/01 5,100 28,500 New York State, Housing Finance Agency, Saxony Housing, Rev., FRDO, 3.00%, 03/07/01 28,500 23,000 New York State, Housing Finance Agency, Ser. A, Rev., FRDO, 3.00%, 03/07/01 23,000 2,000 New York State, Housing Finance Agency, Service Contract Obligation, Ser. A, Rev., FRDO, 2.90%, 03/07/01 2,000 10,000 New York State, Housing Finance Agency, Theatre Row Tower, Ser. A, Rev., FRDO, 3.00%, 03/07/01 10,000 21,900 New York State, Housing Finance Agency, Tribeca, Ser. A, Rev., FRDO, 3.00%, 03/07/01 21,900 5,000 New York State, Housing Finance Agency, Worth Street, Housing, Ser. A, Rev., FRDO, 3.20%, 03/07/01 5,000 6,620 New York State, Job Development Authority, Ser. A-1 through A-42, Rev., FRDO, 3.10%, 03/01/01 6,620 See notes to financial statements. 51 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 8,330 New York State, Job Development Authority, Ser. B-1 through B-21, Rev., FRDO, 3.10%, 03/01/01 $ 8,330 5,800 New York State, Local Government Assistance Corp., Floating Rate Receipts, Ser. SG-99, Rev., FRDO, 3.37%, 03/01/01 5,800 14,925 New York State, Local Government Assistance Corp., FLOATS, Ser. PT-410, Rev., FRDO, 3.37%, 03/01/01 14,925 20,000 New York State, Local Government Assistance Corp., FLOATS, Ser. PT-1040, Rev., FRDO, 3.37%, 03/01/01 20,000 5,900 New York State, Local Government Assistance Corp., Municipal Securities Trust Receipts, Ser. SGA-59, Rev., FRDO, 3.20%, 03/01/01 5,900 12,085 New York State, Local Government Assistance Corp., Ser. A, Rev., ^, 7.25%, 04/01/01 12,356 24,275 New York State, Local Government Assistance Corp., Ser. A, Rev., FRDO, 2.90%, 03/07/01 24,275 1,030 New York State, Local Government Assistance Corp., Ser. B, Rev., ^, 7.13%, 04/01/01 1,053 4,240 New York State, Local Government Assistance Corp., Ser. B, Rev., ^, 7.25%, 04/01/01 4,335 7,900 New York State, Local Government Assistance Corp., Ser. B, Rev., ^, 7.50%, 04/01/01 8,079 8,400 New York State, Local Government Assistance Corp., Ser. B, Rev., FRDO, 2.90%, 03/07/01 8,400 3,800 New York State, Local Government Assistance Corp., Ser. C, Rev., FRDO, 2.85%, 03/07/01 3,800 3,300 New York State, Local Government Assistance Corp., Ser. D, Rev., FRDO, 2.85%, 03/07/01 3,300 15,500 New York State, Local Government Assistance Corp., Ser. F, Rev., FRDO, 2.90%, 03/07/01 15,500 2,000 New York State, Local Government Assistance Corp., Ser. G, Rev., FRDO, 2.75%, 03/07/01 2,000 12,125 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PA-72, Rev., FRDO, 3.37%, 03/01/01 12,125 3,640 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PA-82, Rev., FRDO, 3.51%, 03/01/01 3,644 9,700 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PA-113, Rev., FRDO, 3.37%, 03/01/01 9,700 4,420 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PA-408, Rev., FRDO, 3.37%, 03/01/01 4,420 6,765 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PT-17, Rev., FRDO, 3.37%, 03/01/01 6,765 8,425 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PT-100, Rev., FRDO, 3.37%, 03/01/01 8,425 See notes to financial statements. 52 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 4,765 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PT-109, Rev., FRDO, 3.37%, 03/01/01 $ 4,765 8,355 New York State, Medical Care Facilities, Finance Agency, FLOATS, Ser. PT-145A, Rev., FRDO, 3.37%, 03/01/01 8,355 2,500 New York State, Mortgage Agency, FLOATS, Ser. PA-628, Rev., FRDO, 3.40%, 03/01/01 2,500 11,165 New York State, Mortgage Agency, FLOATS, Ser. PA-657, Rev., FRDO, 3.37%, 03/01/01 11,165 3,230 New York State, Mortgage Agency, FLOATS, Ser. PT-217, Rev., FRDO, 3.40%, 03/01/01 3,230 4,720 New York State, Mortgage Agency, FLOATS, Ser. PT-260, Rev., FRDO, 4.45%, 03/07/01 4,720 8,165 New York State, Mortgage Agency, FLOATS, Ser. PT-322, Rev., FRDO, 4.30%, 03/01/01 8,165 6,110 New York State, Mortgage Agency, FLOATS, Ser. PT-1190, Rev., FRDO, 3.37%, 03/01/01 6,110 810 New York State, Mortgage Agency, Homeowner Mortgage, Ser. 91, Rev., 4.15%, 04/01/01 810 210 New York State, Mortgage Agency, Homeowner Mortgage, Ser. 93, Rev., 4.15%, 04/01/01 210 7,000 New York State, Ser. A, GO, FRDO, 3.20%, 03/07/01 7,000 52,405 New York State, Thruway Authority, Floating Rate Receipts, Ser. SGA-119, FRDO, 3.25%, 03/01/01 52,406 11,415 New York State, Thruway Authority, FLOATS, Ser. PA-532, Rev., FRDO, 3.37%, 03/01/01 11,415 1,030 New York State, Thruway Authority, Municipal Securities Trust Receipts, Ser. SGA-66, Rev., FRDO, 3.12%, 03/07/01 1,030 1,300 New York State, Thruway Authority, Rev., FRDO, 3.00%, 03/01/01 1,300 1,000 Niagara County, New York, IDA, Solid Waste Disposal, American Refunding, Fuel Co., Ser. A, Rev., FRDO, 2.95%, 03/07/01 1,000 1,000 Niagara County, New York, IDA, Solid Waste Disposal, American Refunding, Fuel Co., Ser. B, Rev., FRDO, 3.05%, 03/07/01 1,000 4,995 Niagara Falls, New York, Bridge Commission, FLOATS, Ser. PA-530, Rev., FRDO, 3.37%, 03/01/01 4,995 10,300 Niagara Falls, New York, Bridge Commission, Ser. A, Rev., FRDO, 2.80%, 03/07/01 10,300 7,000 North Babylon, New York, Union Free School District, GO, TAN, @, 5.00%, 06/28/01 7,007 7,017 North Hempstead, New York, GO, BAN, 5.00%, 07/26/01 7,031 4,000 Northern Adironadack Central School District, Ellenburg, New York, GO, BAN, 5.00%, 07/06/01 4,005 5,000 Ogdensburg, New York, Enlarged City School District, GO, RAN, 5.00%, 06/29/01 5,005 4,500 Oneonta, New York, City School District, GO, RAN, 5.00%, 06/15/01 4,503 See notes to financial statements. 53 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $10,000 Onondaga County, New York, IDA, Solid Waste Disposal Facilities, Solvay Paperboard Project, Ser. A, FRDO, 4.25%, 12/06/01 $ 10,000 8,000 Oyster Bay, New York, Ser. A, BAN, 3.75%, 01/25/02 8,019 1,780 Panama, New York, Central School District, GO, BAN, 5.00%, 08/15/01 1,783 8,000 Phelps-Clifton Springs, New York, Central School District, GO, BAN, 4.60%, 12/19/01 8,005 3,405 Port Authority of New York & New Jersey, FLOATS, Ser. PA-518, Rev., FRDO, 3.32%, 03/01/01 3,405 1,305 Port Jervis, New York, IDA, The Future Home Tech Inc., Rev., FRDO, 3.25%, 03/07/01 1,305 2,455 Pulaski, New York, Central School District, GO, RAN, 5.00%, 06/29/01 2,458 12,658 Riverhead, New York, Central School District, 4th Ser., GO, BAN, @, 4.50%, 10/02/01 12,667 2,900 Riverhead, New York, Central School District, GO, BAN, 5.00%, 10/02/01 2,908 5,025 Riverhead, New York, Central School District, GO, TAN, 5.00%, 06/22/01 5,029 5,000 Rochester, New York, GO, BAN, @, 4.75%, 03/07/01 5,000 725 Rockland County, New York, IDA, IDR, X Products Corp. Project, Rev., FRDO, 3.50%, 03/01/01 725 2,120 Rockland County, New York, IDA, Shock Technical Inc. Project, Rev., FRDO, 3.25%, 03/07/01 2,120 10,000 Rome, New York, City School District, GO, RAN, @, 5.00%, 06/29/01 10,007 10,958 Rondout Valley Central School District, Accord, New York, GO, BAN, 4.75%, 03/15/01 10,959 4,635 Roosevelt, New York, Union Free School District, GO, TAN, 5.25%, 06/28/01 4,637 12,215 Schenectady, New York, City School District, GO, RAN, @, 5.50%, 06/29/01 12,225 3,450 Sidney, New York, Central School District, GO, BAN, 4.75%, 06/29/01 3,453 852 Sodus, New York, Central School District, GO, 4.40%, 06/15/01 853 4,500 South Colonie, New York, Central School District, GO, RAN, 5.00%, 06/29/01 4,506 2,500 South Country Central School District, Brookhaven, New York, GO, TAN, 5.00%, 06/26/01 2,503 3,954 South Jefferson, New York, Central School District, GO, RAN, 5.00%, 06/20/01 3,957 2,000 Southeast, New York, IDA, IDR, Unilock New York Inc. Project, Rev., FRDO, 3.30%, 03/07/01 2,000 2,700 St. Lawrence County, New York, IDA, PCR, Reynolds Metals, Rev., FRDO, 2.95%, 03/01/01 2,700 9,800 Steuben-Allegany Counties, New York, Board of Cooperative Educational Services, Sole Supervisory, GO, RAN, @, 4.65%, 06/29/01 9,806 3,207 Stillwater, New York, Central School District, GO, BAN, 5.00%, 06/18/01 3,213 See notes to financial statements. 54 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 4,000 Suffolk County, New York, IDA, Civic Facilities, Guide Dog Foundation Inc., Rev., FRDO, 3.40%, 03/01/01 $ 4,000 2,700 Suffolk County, New York, Water Authority, Rev., FRDO, BAN, 2.90%, 03/07/01 2,700 900 Tompkins-Seneca-Tioga, New York, Board of Cooperative Educational Services, Sole Supervisory District, GO, RAN, 4.25%, 06/29/01 901 5,300 Tompkins-Seneca-Tioga, New York, Board of Cooperative Educational Services, Sole Supervisory District, GO, RAN, 4.38%, 06/29/01 5,305 6,400 Tompkins-Seneca-Tioga, New York, Board of Cooperative Educational Services, Sole Supervisory District, GO, RAN, @, 5.00%, 06/29/01 6,406 55,100 Triborough Bridge & Tunnel Authority, New York, Floating Rate Trust Receipts, Ser. N-15, Regulation D, Rev., FRDO, 3.10%, 03/07/01 55,101 4,115 Triborough Bridge & Tunnel Authority, New York, FLOATS, Ser. PA-200, Rev., FRDO, 3.37%, 03/01/01 4,115 4,995 Triborough Bridge & Tunnel Authority, New York, FLOATS, Ser. PA-665, Rev., FRDO, 3.40%, 03/01/01 4,995 4,200 Triborough Bridge & Tunnel Authority, New York, FLOATS, Ser. SG-41, Rev., FRDO, 3.37%, 03/01/01 4,200 33,980 Triborough Bridge & Tunnel Authority, New York, General Purpose, Ser. C, Rev., FRDO, 3.15%, 03/01/01 33,980 10,000 Triborough Bridge & Tunnel Authority, New York, Special Obligation, Ser. B, Rev., FRDO, 3.00%, 03/07/01 10,000 15,100 Triborough Bridge & Tunnel Authority, New York, Special Obligation, Ser. C, Rev., FRDO, 2.80%, 03/07/01 15,100 21,100 Triborough Bridge & Tunnel Authority, New York, Special Obligation, Ser. D, Rev., FRDO, 2.80%, 03/07/01 21,100 4,050 Tully, New York, Central School District, GO, RAN, 5.00%, 06/29/01 4,056 5,000 Utica, New York, City School District, GO, RAN, 5.00%, 06/26/01 5,005 2,663 Utica, New York, City School District, Ser. A, GO, BAN, 3.75%, 02/15/02 2,669 6,000 VRDC/IVRC Trust, Tax Exempt, Ser. 93-C, Rev., FRDO, #, 3.15%, 03/07/01 6,000 2,500 Wayandanch, New York, Union, Free School District, GO, TAN, 4.90%, 06/28/01 2,504 3,878 Wayland-Cohocton, New York, Central School District, GO, BAN, 3.25%, 01/25/02 3,889 4,050 Westchester County, New York, IDA, Civic Facility, Northern Westchester Hospital, Rev., FRDO, 3.00%, 03/07/01 4,050 5,000 William Floyd, Union Free School District, Mastics-Moricher-Shirley, GO, BAN, 3.63%, 06/22/01 5,003 See notes to financial statements. 55 JPMorgan New York Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- New York -- Continued $ 8,000 Yonkers, New York, IDA, Civic Facility, Sarah Lawrence College Project, Rev., FRDO, 2.90%, 03/07/01 $ 8,000 ---------- 2,213,078 ------------------------------------------------------------------ Total Investments -- 99.9% $2,218,487 (Cost $2,218,487)* ------------------------------------------------------------------ See notes to financial statements. 56 - -------------------------------------------------------------------------------- JPMorgan California Tax Free Money Market Fund Portfolio of Investments As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- 100.0% - -------------------------------------------------------------------------------- California -- 82.8% $3,190 Alameda County, California, Multi-Family Housing, Quail, Ser. A, Rev., FRDO, 1.85%, 03/07/01 $ 3,190 800 Alameda-Contra Costa, California, School Financing Authority, Capital Improvements Financing Projects, Ser. I, COP, FRDO, 2.70%, 03/01/01 800 345 Anaheim, California, Electric, Rev., 4.50%, 10/01/01 348 1,000 California Community College Financing Authority, Ser. B, Rev., TRAN, @, 5.00%, 08/03/01 1,003 150 California Educational Facilities Authority, FLOATS, Ser. PA-542, Rev., FRDO, 2.87%, 03/01/01 150 500 California Educational Facilities Authority, University of San Francisco, Rev., FRDO, 2.00%, 03/07/01 500 1,700 California Housing Finance Agency, FLOATS, Ser. PA-539R, Rev., FRDO, 2.87%, 03/01/01 1,700 1,000 California Housing Finance Agency, Home Mortgage, Ser. W, Rev., 3.90%, 10/01/01 1,000 100 California Housing Finance Agency, Multi-Family Housing, Ser. A, Rev., FRDO, 1.85%, 03/07/01 100 1,000 California Housing Finance Agency, Ser. II-R-44, Rev., FRDO, 2.82%, 03/01/01 1,000 1,610 California Infrastructure & Economic Development, IDR, Pleasant Mattress Inc. Project, Ser. A, Rev., FRDO, 2.40%, 03/07/01 1,610 100 California PCFA, PCR, Shell Oil Co. Project, Ser. B, Rev., FRDO, 1.45%, 03/01/01 100 100 California PCFA, Solid Waste Disposal, Gilton Solid Waste Management, Ser. A, Rev., FRDO, 2.65%, 03/01/01 100 450 California State, Department of Water Resources, Central Valley Project, Water Systems, Ser. J-2, Rev., ^, 6.00%, 06/01/01 460 300 California State, Economic Development Financing Authority, Airport Facilities, Mercury Air Group, Rev., FRDO, 2.65%, 03/01/01 300 700 California State, Economic Development Financing Authority, IDR, Coast Grain Co. Project, Rev., FRDO, 2.70%, 03/01/01 700 2,000 California State, Economic Development Financing Authority, IDR, Provena Foods Inc. Project, Rev., FRDO, 2.45%, 03/07/01 2,000 1,700 California State, Economic Development Financing Authority, IDR, Standard Abrasives Manufacturing Project, Rev., FRDO, 2.40%, 03/07/01 1,700 400 California State, Economic Development Financing Authority, IDR, Volk Enterprises Inc. Project, Rev., FRDO, 2.55%, 03/01/01 400 2,000 California State, Floating Rate Receipts, Ser. SG-85, FRDO, 2.92%, 03/01/01 2,000 495 California State, FLOATS, Ser. PA-464, GO, FRDO, 2.97%, 03/01/01 495 1,000 California State, FLOATS, Ser. PA-779-R, GO, FRDO, 2.97%, 03/01/01 1,000 800 California State, FLOATS, Ser. PT-1070, GO, FRDO, 2.92%, 03/01/01 800 See notes to financial statements. 57 JPMorgan California Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- California -- Continued $ 900 California State, FLOATS, Ser. PT-1072, GO, FRDO, 2.92%, 03/01/01 $ 900 400 California State, Municipal Securities Trust Receipts, Ser. SGA-119, GO, FRDO, 1.70%, 03/01/01 400 1,000 California State, Municipal Securities Trust Receipts, Ser. SGA-40, GO, FRDO, 2.00%, 03/07/01 1,000 2,800 California State, Municipal Securities Trust Receipts, Ser. SGA-55, GO, FRDO, 2.00%, 03/07/01 2,800 200 California State, Public Works Board Lease, Department of Corrections, State Prisons, Ser. A, Rev., 5.00%, 12/01/01 202 2,000 California State, Ser. L, Class A, 2.97%, 03/01/01 2,000 400 California Statewide Communities Development Authority, IDR, Del Mesa Farms Project, Ser. A, Rev., FRDO, 2.65%, 03/01/01 400 1,000 California Statewide Communities Development Authority, Ser. A, Rev., TRAN, 5.25%, 06/29/01 1,003 2,400 California Statewide Communities Development Authority, Ser. N-6, Regulation D, Rev., FRDO, 2.75%, 03/07/01 2,400 1,000 Carlsbad, California, Unified School District, School Facilities Bridge Funding Project, COP, FRDO, 2.60%, 03/01/01 1,000 655 Chula Vista, California, Ser. A, COP, 4.25%, 09/01/01 656 245 Citrus Heights, California, Water District, COP, 4.00%, 10/01/01 245 200 Contra Costa County, California, Ser. A, GO, TRAN, 5.25%, 10/01/01 203 1,400 Foothill-de Anza, California, Community College District, Ser. 473-X, GO, FRDO, 3.00%, 03/01/01 1,400 100 Irvine Ranch, California, Water District, Consolidated Bonds, Rev., FRDO, 1.50%, 03/01/01 100 100 Irvine Ranch, California, Water District, Consolidated Bonds, Rev., FRDO, Consolidated Bonds, Rev., FRDO, 1.50%, 03/01/01 100 200 Irvine Ranch, California, Water District, Consolidated Improvement Districts, GO, FRDO, 1.65%, 03/01/01 200 400 Irvine, California, Improvement Bond Act of 1915, Assessment District No. 94-13, Special Assessment, FRDO, 1.50%, 03/01/01 400 400 Irvine, California, Improvement Bond Act of 1915, Assessment District No. 97-16, Rev., FRDO, 1.50%, 03/01/01 400 1,215 Los Angeles County, California, Harbor Department, Ser. B, Rev., @, 5.00%, 08/01/01 1,221 590 Los Angeles County, California, Housing Authority, Multi-Family Housing, Ser. A, Rev., FRDO, 2.10%, 03/06/01 590 100 Los Angeles County, California, Metropolitan Transportation Authority, Proposition C, Second Ser., Ser. A, Rev., FRDO, 2.50%, 03/01/01 100 See notes to financial statements. 58 JPMorgan California Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- California -- Continued $2,000 Los Angeles County, California, Metropolitan Transportation Authority, Sales Tax Revenue, Floating Rate Receipts, Ser. SG-54, FRDO, 2.87%, 03/01/01 $ 2,000 400 Los Angeles County, California, Public Works Financing Authority, Regulation Park & Open Space District, Ser. A, Rev., 5.00%, 10/01/01 403 1,410 Los Angeles County, California, Regional Airports Improvement Corporation Lease, American Airlines, Los Angeles International Airport, Ser. E, Rev., FRDO, 3.15%, 03/01/01 1,410 1,000 Los Angeles County, California, Schools Pooled Financing Program, Pooled Transportation, Ser. A, COP, GO, 5.00%, 07/02/01 1,002 160 Los Angeles County, California, Wastewater Systems, Ser. C, Rev., 4.50%, 06/01/01 160 220 Los Angeles, California, Community Redevelopment Agency, Community Redevelopment Financing Authority, Pooled Financing, Monterey, Ser. E, Rev., 4.50%, 09/01/01 221 1,000 Los Angeles, California, Department of Water & Power, Waterworks, Rev., FRDO, 3.75%, 05/17/01 1,000 500 Metropolitan Water District, Southern California, Waterworks, Rev., 5.10%, 07/01/01 501 500 Metropolitan Water District, Southern California, Waterworks, Ser. B, GO, +, 3.00%, 03/01/02 501 485 Milpitas, California, Public Financing Authority, COP, 4.13%, 11/01/01 486 1,000 Monrovia, California, Unified School District, Municipal Securities Trust Receipt, Ser. SGA-70, Rev., FRDO, 2.00%, 03/07/01 1,000 1,000 Moreno Valley, California, Unified School District, TRAN, 4.75%, 08/15/01 1,003 5,280 Municipal Securities Trust Certificates, Ser. 1998-47, Class A, Rev., FRDO, #, 2.00%, 03/07/01 5,279 500 Newport Beach, California, Hoagan Memorial Hospital, Ser. A, Rev., FRDO, 1.55%, 03/01/01 500 400 Newport Beach, California, Hoagan Memorial Hospital, Ser. B, Rev., FRDO, 1.55%, 03/01/01 400 1,500 Newport Beach, California, Hoagan Memorial Hospital, Ser. C, Rev., FRDO, 1.55%, 03/01/01 1,500 1,000 Oakland-Alameda County, California, Coliseum Authority, Coliseum Project, Ser. C-1, Rev., FRDO, 2.05%, 03/07/01 1,000 100 Ontario, California, Redevelopment Agency, IDR, Safariland Project, Rev., FRDO, 3.25%, 03/07/01 100 400 Ontario, California, Redevelopment Agency, Multi-Family Housing, Seasons at Gateway, Sub. Ser. B, Rev., FRDO, 2.20%, 03/07/01 400 949 Orange County, California, Apartment Development, Niguel Summit 2, Ser. B, Rev., FRDO, 2.20%, 03/06/01 949 See notes to financial statements. 59 JPMorgan California Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- California -- Continued $ 300 Orange County, California, Sanitation Districts No. 1-3, 5-7 & 11, COP, FRDO, 1.50%, 03/01/01 $ 300 200 Orange County, California, Sanitation Districts, Ser. A, COP, FRDO, 1.50%, 03/01/01 200 1,355 Oxnard, California, Industrial Development Financing Authority, IDR, Accurate Engineering Project, Rev., FRDO, 2.40%, 03/07/01 1,355 1,500 Pasadena, California, Rose Bowl Improvements Project, COP, FRDO, 1.90%, 03/07/01 1,500 450 Petaluma, California, City School District, GO, TRAN, 5.00%, 07/05/01 451 700 Riverside County, California, IDA, Design Time Inc. Project, Ser. A-I, Rev., FRDO, 2.35%, 03/07/01 700 500 Riverside County, California, Riverside County Public Facilities, Ser. C, COP, FRDO, 2.00%, 03/06/01 500 200 Sacramento, California, Municipal Utility District, Ser.L, Rev., 5.00%, 07/01/01 201 550 San Bernardino County, California, Housing Authority, Multi-Family Housing, Victoria Terrace Project, Ser. A, Rev., FRDO, 2.60%, 03/01/01 550 90 San Bernardino County, California, IDA, Aqua-Service, Rev., FRDO, 3.20%, 03/07/01 90 80 San Bernardino County, California, IDA, Master Halco Inc., Ser. II, Rev., FRDO, 3.25%, 03/06/01 80 1,000 San Diego County, California, 3.90%, 03/07/01 1,000 300 San Diego County, California, Multi-Family Housing, Issue A, Rev., FRDO, 2.55%, 03/01/01 300 300 San Francisco, California, City & County, Affordable Housing, Ser. D, GO, 7.38%, 06/15/01 303 300 San Francisco, California, City & County, Redevelopment Agency, Multi-Family Housing, 3rd & Mission, Ser. C, Rev., FRDO, 1.95%, 03/07/01 300 390 San Francisco, California, State Building Authority Lease, Civic Center Complex, Ser. A, Rev., 4.30%, 12/01/01 394 300 San Jose, California, Unified School District, Santa Clara County, Ser. B, GO, 4.20%, 08/01/01 300 500 Santa Ana, California, Housing Authority, Multi-Family Housing, Vintage Apartments, Ser. A, Rev., FRDO, 2.75%, 03/01/01 500 600 Santa Ana, California, Unified School District, COP, FRDO, 1.90%, 03/07/01 600 625 Santa Clara County-El Camino, California, Hospital District, Hospital Facilities Authority, ACES, Lease, Valley Medical Center Project, Ser. B, Rev., FRDO, 2.50%, 03/06/01 625 490 Santa Cruz County, California, Redevelopment Agency, Live Oak/Soquel Project, Tax Allocation, 4.25%, 09/01/01 491 460 Sonoma Valley, California, Unified School District, GO, 10.00%, 08/01/01 471 600 Three Valleys Municipal Water District, California, Miramar Water Treatment, COP, FRDO, 2.35%, 03/07/01 600 See notes to financial statements. 60 JPMorgan California Tax Free Money Market Fund - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) As of February 28, 2001 (unaudited) (Amounts in Thousands) Principal Amount Issuer Value - -------------------------------------------------------------------------------- Municipal Securities -- Continued - -------------------------------------------------------------------------------- California -- Continued $ 600 Tustin, California, Improvement Bond Act of 1915, Reassessment District No. 95-2-A, Special Assessment, FRDO, 1.50%, 03/01/01 $ 600 425 Upland, California, Community Redevelopment Agency, Multi-Family Housing, Northwoods Project, Ser. 168-A, Rev., FRDO, 2.65%, 03/01/01 425 1,500 Vacaville, California, Multi-Family Mortgage, Quail Run, Ser. A, Rev., 1.85%, 03/07/01 1,500 ------- 73,327 Louisiana -- 1.0% 900 Louisiana Public Facilities Authority, Industrial Development, Kenner Hotel, Rev., FRDO, 3.00%, 03/01/01 900 Puerto Rico -- 16.2% 2,000 Municipal Securities Trust Certificates, Ser. 2000-103, Class A, Special Obligation, FRDO, #, 2.90%, 03/06/01 2,000 700 Municipal Securities Trust Certificates, Ser. 2000-91, Class A, Rev., FRDO, 1.70%, 03/01/01 700 600 Puerto Rico Commonwealth, FLOATS, Ser. PA-472, Rev., FRDO, 2.87%, 03/01/01 600 1,000 Puerto Rico Commonwealth, FLOATS, Ser. PA-625, GO, FRDO, 2.87%, 03/01/01 1,000 1,000 Puerto Rico Commonwealth, FLOATS, Ser. PT-1025, GO, FRDO, 2.87%, 03/01/01 1,000 1,500 Puerto Rico Commonwealth, FLOATS, Ser. PT-1226, 2.87%, 03/01/01 1,500 600 Puerto Rico Commonwealth, GO, 5.50%, 07/01/01 603 200 Puerto Rico Commonwealth, Public Improvements, Ser. B, GO, 5.00%, 07/01/01 201 1,722 Puerto Rico Government Development Bank, 3.00%, 09/12/01 1,722 1,000 Puerto Rico Government Development Bank, 3.00%, 09/21/01 1,000 3,000 Puerto Rico Government Development Bank, 3.30%, 05/30/01 3,000 1,000 Puerto Rico, Electric Power Authority, Ser. P, Rev., 7.00%, 07/01/01 1,032 ------- 14,358 - -------------------------------------------------------------------------------- Total Investments -- 100.0% $88,585 (Cost $88,585)* - -------------------------------------------------------------------------------- See notes to financial statements. 61 JPMorgan Money Market Funds - -------------------------------------------------------------------------------- Portfolio of Investments (Continued) INDEX: * -- The cost of securities is substantially the same for federal income tax purposes. # -- Security may only be sold to qualified institutional buyers. ^ -- Security is prerefunded or escrowed to maturity. The maturity date shown is the date of the prerefunded call. + -- When issued or delayed delivery security. @ -- All or portion of this security is segregated for when issued or delayed delivery securities. ACES -- Auction Rate Securities. BAN -- Bond Anticipation Notes. COP -- Certificates of Participation. DN -- Discount Note: The rate shown is the effective yield at the date of purchase. Eagles -- Earnings of accrual generated on local exempt securities. ECN -- Extendible Commercial Note. The maturity date shown is the call date. The interest rate shown is the effective yield at the date of purchase. FHLMC -- Federal Home Loan Mortgage Corporation. FLOATS -- Floating Auction Tax Exempts. FNMA -- Federal National Mortgage Association. FRDO -- Floating Rate Demand Obligation. The maturity date shown is the next interest reset date. The interest rate shown is the rate in effect at February 28, 2001. FRN -- Floating Rate Note. The maturity date shown is the actual maturity date. The rate shown is the rate in effect at February 28, 2001. GIC -- Guaranteed Insurance Contract. GO -- General Obligation. IDA -- Industrial Development Authority. IDR -- Industrial Development Revenue. MTN -- Medium Term Note. PCFA -- Pollution Control Financing Authority. PCR -- Pollution Control Revenue. PUTTERS -- Putable Tax Exempt Receipts. RAN -- Revenue Anticipation Notes. Rev. -- Revenue Bond. Ser. -- Series. SUB -- Step-Up Bond. The maturity date shown is the earlier of the next interest rate reset date or the call date. The interest rate shown is the rate in effect at February 28, 2001. TAN -- Tax Anticipation Notes. TRAN -- Tax & Revenue Anticipation Notes. USTR -- United States Treasury Notes, Bonds and Bills. See notes to financial statements. 62 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Assets and Liabilities As of February 28, 2001 (unaudited) (Amounts in Thousands, Except Per Share Amounts)
100% U.S. Treasury U.S. Securities Government Treasury Plus Money Market Money Market Money Market Fund Fund Fund ============================================================================================= ASSETS: Investment securities, at value (Note 1) ................ $ 5,589,676 $ 8,880,807 $ 2,824,266 Other assets .................. 31 48 17 Receivables: Interest .................... 12,593 60,905 273 - --------------------------------------------------------------------------------------------- Total Assets ............ 5,602,300 8,941,760 2,824,556 - --------------------------------------------------------------------------------------------- LIABILITIES: Payables: To Custodian ................ 15 52 -- Investment securities purchased ................... -- 156,805 -- Dividends ................... 21,921 33,447 9,671 Accrued liabilities: (Note 2) Investment advisory fees .... 431 653 198 Administration fees ......... 259 327 119 Shareholder servicing fees .. 1,076 1,520 379 Distribution fees ........... 65 189 105 Custody fees ................ 78 112 27 Other ....................... 1,154 1,496 542 - --------------------------------------------------------------------------------------------- Total Liabilities ....... 24,999 194,601 11,041 - --------------------------------------------------------------------------------------------- NET ASSETS: Paid in capital ............... 5,576,507 8,747,160 2,813,618 Accumulated distributions in excess of net investment income (117) (2) (59) Accumulated net realized gain (loss) on investments ......... 911 1 (44) - --------------------------------------------------------------------------------------------- Net Assets .............. $ 5,577,301 $ 8,747,159 $ 2,813,515 - --------------------------------------------------------------------------------------------- Shares of beneficial interest outstanding ($.001 par value; unlimited number of shares authorized) Vista Shares .................. 3,722,298 3,955,740 1,391,162 Premier Shares ................ 132,158 1,083,142 347,882 Institutional Shares .......... 1,722,108 3,708,331 1,074,655 Net Asset Value, offering and redemption price per share (all classes) ................... $ 1.00 $ 1.00 $ 1.00 - --------------------------------------------------------------------------------------------- Cost of Investments ............. $ 5,589,676 $ 8,880,807 $ 2,824,266 =============================================================================================
See notes to financial statements. 63 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Assets and Liabilities As of February 28, 2001 (unaudited) (Amounts in Thousands, Except Per Share Amounts)
Federal Prime Tax Free Money Market Money Market Money Market Fund II Fund II Fund ============================================================================================== ASSETS: Investment securities, at value (Note 1) ...................... $ 1,893,759 $ 29,704,751 $ 1,776,577 Cash .......................... 1 146 70 Other assets .................. 7 143 12 Receivables: Interest .................... 6,762 116,304 14,566 Fund shares sold ............ -- 13 -- Expense Reimbursement from Distributor ................. 7 7 7 - ---------------------------------------------------------------------------------------------- Total Assets ............ 1,900,536 29,821,364 1,791,232 - ---------------------------------------------------------------------------------------------- LIABILITIES: Payables: Investment securities purchased ................... -- 70,252 10,000 Fund shares redeemed ........ -- 31 -- Dividends ................... 7,618 122,404 4,424 Accrued liabilities: (Note 2) Investment advisory fees .... 143 2,331 133 Administration fees ......... 143 2,096 133 Shareholder servicing fees .. 246 3,718 199 Distribution fees ........... 52 7 72 Custody fees ................ 38 204 31 Other ....................... 519 1,978 387 - ---------------------------------------------------------------------------------------------- Total Liabilities ....... 8,759 203,021 15,379 - ---------------------------------------------------------------------------------------------- NET ASSETS: Paid in capital ............... 1,891,793 29,619,699 1,776,363 Accumulated distributions in excess of net investment income (35) (258) (33) Accumulated net realized gain (loss) on investments ......... 19 (1,098) (477) - ---------------------------------------------------------------------------------------------- Net Assets .............. $ 1,891,777 $ 29,618,343 $ 1,775,853 - ---------------------------------------------------------------------------------------------- Shares of beneficial interest outstanding ($.001 par value; unlimited number of shares authorized) Vista Shares .................. 673,027 10,213,350 972,428 Premier Shares ................ 312,286 2,059,160 99,025 Institutional Shares .......... 906,471 17,334,106 704,931 Reserve Shares ................ 1 123 1 B Shares ...................... -- 12,496 -- C Shares ...................... -- 309 -- Net Asset Value, offering and redemption price per share (all classes) * ................. $ 1.00 $ 1.00 $ 1.00 - ---------------------------------------------------------------------------------------------- Cost of Investments $ 1,893,759 $ 29,704,751 $ 1,776,577 ==============================================================================================
* Redemption price for Class B and C Shares may be reduced by contigent deferred sales charge. See notes to financial statements. 64 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Assets and Liabilities As of February 28, 2001 (unaudited) (Amounts in Thousands, Except Per Share Amounts)
New York California Tax Free Tax Free Money Market Money Market Fund Fund ============================================================================================== ASSETS: Investment securities, at value Note 1) .............. $ 2,218,487 $ 88,585 Cash ................................................. -- 81 Other assets ......................................... 12 1 Receivables: Interest ........................................... 18,997 641 Expense Reimbursement from Distributor ............. 7 -- - ---------------------------------------------------------------------------------------------- Total Assets ................................... 2,237,503 89,308 - ---------------------------------------------------------------------------------------------- LIABILITIES: Payables: To Custodian ....................................... 266 -- Investment securities purchased .................... 9,641 502 Dividends .......................................... 4,976 170 Accrued liabilities: (Note 2) Investment advisory fees ........................... 163 7 Administration fees ................................ 82 7 Shareholder servicing fees ......................... 572 10 Distribution fees .................................. 65 3 Custody fees ....................................... 30 13 Other .............................................. 272 41 - ---------------------------------------------------------------------------------------------- Total Liabilities .............................. 16,067 753 - ---------------------------------------------------------------------------------------------- NET ASSETS: Paid in capital ...................................... 2,221,418 88,574 Accumulated undistributed/(distributions in excess of) net investment income ................................ 44 (3) Accumulated net realized loss on investments ......... (26) (16) - ---------------------------------------------------------------------------------------------- Net Assets ..................................... $ 2,221,436 $ 88,555 - ---------------------------------------------------------------------------------------------- Shares of beneficial interest outstanding ($.001 par value; unlimited number of shares authorized) Vista Shares ......................................... 2,221,519 88,573 Reserve Shares ....................................... 1 -- Net Asset Value, offering and redemption price per share (all classes) .................................... $ 1.00 $ 1.00 - ---------------------------------------------------------------------------------------------- Cost of Investments .................................... $ 2,218,487 $ 88,585 ==============================================================================================
See notes to financial statements. 65 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Operations For the six months ended February 28, 2001 (unaudited) (Amounts in Thousands)
100% U.S. Treasury U.S. Securities Government Treasury Plus Money Market Money Market Money Market Fund Fund Fund ======================================================================================= INTEREST INCOME: (Note 1C) ......... $156,444 $252,613 $ 79,151 - --------------------------------------------------------------------------------------- EXPENSES: (Note 2) Investment advisory fees ......... 2,556 3,960 1,257 Administration fees .............. 2,556 3,960 1,257 Shareholder servicing fees ....... 7,483 9,582 3,183 Distribution fees ................ 1,933 2,473 693 Custodian fees ................... 213 256 76 Printing and postage ............. 26 20 13 Professional fees ................ 50 72 37 Registration expenses ............ 511 179 195 Transfer agent fees .............. 401 293 119 Trustees' fees ................... 123 191 61 Other ............................ 82 133 126 - --------------------------------------------------------------------------------------- Total expenses ............. 15,934 21,119 7,017 - --------------------------------------------------------------------------------------- Less amounts waived (Note 2E) .... 2,818 3,388 1,229 Less earnings credits (Note 2F) .. 9 58 30 - --------------------------------------------------------------------------------------- Net expenses ............... 13,107 17,673 5,758 - --------------------------------------------------------------------------------------- Net investment income .... 143,337 234,940 73,393 - --------------------------------------------------------------------------------------- REALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on on investment transactions ....... 1,664 197 (8) - --------------------------------------------------------------------------------------- Net increase in net assets from operations .................. $145,001 $235,137 $ 73,385 =======================================================================================
See notes to financial statements. 66 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Operations For the six months ended February 28, 2001 (unaudited) (Amounts in Thousands)
Federal Prime Tax Free Money Market Money Market Money Market Fund II Fund II Fund ========================================================================================== INTEREST INCOME: (Note 1C) ............ $51,024 $ 733,308 $ 35,957 - ------------------------------------------------------------------------------------------ EXPENSES: (Note 2) Investment advisory fees ............ 806 11,286 866 Administration fees ................. 806 11,286 866 Shareholder servicing fees .......... 1,793 21,824 2,067 Distribution fees ................... 306 54 451 Custodian fees ...................... 91 634 116 Printing and postage ................ 8 158 23 Professional fees ................... 22 162 22 Registration expenses ............... 14 277 51 Transfer agent fees ................. 220 935 85 Trustees' fees ...................... 39 541 42 Other ............................... 2 1,173 144 - ------------------------------------------------------------------------------------------ Total expenses ................ 4,107 48,330 4,733 - ------------------------------------------------------------------------------------------ Less amounts waived (Note 2E) ....... 318 5,064 807 Less earnings credits (Note 2F) ..... 6 70 52 Less expense reimbursements (Note 2F) 11 11 11 - ------------------------------------------------------------------------------------------ Net expenses .................. 3,772 43,185 3,863 - ------------------------------------------------------------------------------------------ Net investment income ....... 47,252 690,123 32,094 - ------------------------------------------------------------------------------------------ REALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on on investment transactions .......... 75 (72) (23) - ------------------------------------------------------------------------------------------ Net increase in net assets from operations ..................... $47,327 $ 690,051 $ 32,071 ==========================================================================================
See notes to financial statements. 67 - -------------------------------------------------------------------------------- JPMorgan Funds Statement of Operations For the six months ended February 28, 2001 (unaudited) (Amounts in Thousands) New York California Tax Free Tax Free Money Market Money Market Fund Fund ================================================================================ INTEREST INCOME: (Note 1C) .................. $38,862 $ 1,616 - -------------------------------------------------------------------------------- EXPENSES: (Note 2) Investment advisory fees .................. 967 46 Administration fees ....................... 967 46 Shareholder servicing fees ................ 3,385 160 Distribution fees ......................... 967 46 Custodian fees ............................ 116 36 Printing and postage ...................... 8 1 Professional fees ......................... 23 16 Registration expenses ..................... 54 3 Transfer agent fees ....................... 186 9 Trustees' fees ............................ 47 2 Other ..................................... 90 6 - -------------------------------------------------------------------------------- Total expenses ...................... 6,810 371 - -------------------------------------------------------------------------------- Less amounts waived (Note 2E) ............. 1,064 115 Less earnings credits (Note 2F) ........... 31 4 Less expense reimbursements (Note 2F) ..... 11 -- - -------------------------------------------------------------------------------- Net expenses ........................ 5,704 252 - -------------------------------------------------------------------------------- Net investment income ............. 33,158 1,364 - -------------------------------------------------------------------------------- REALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on on investment transactions ................ 3 (2) - -------------------------------------------------------------------------------- Net increase in net assets from operations ........................... $33,161 $ 1,362 ================================================================================ See notes to financial statements. 68 JPMorgan Funds - -------------------------------------------------------------------------------- Statement of Changes in Net Assets For the periods indicated (unaudited) STATEMENT OF CHANGES IN NET ASSETS For the periods indicated (unaudited) (Amounts in Thousands)
100% U.S. Treasury Securities U.S. Government Treasury Plus Money Market Money Market Money Market Fund Fund Fund ------------------------ ------------------------ - ------------------------ 9/1/00 Year 9/1/00 Year 9/1/00 Year Through Ended Through Ended Through Ended 2/28/01 8/31/00 2/28/01 8/31/00 2/28/01 8/31/00 ==================================================================================================================================== INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income ...................... $ 143,337 $ 214,942 $ 234,940 $ 400,842 $ 73,393 $ 142,715 Net realized gain (loss) on investments .... 1,664 183 197 25 (8) 7 - ------------------------------------------------------------------------------------------------------------------------------------ Increase in net assets from operations . 145,001 215,125 235,137 400,867 73,385 142,722 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ...................... (143,335) (214,925) (234,935) (400,848) (73,392) (142,713) Net realized gain on investment transactions (763) (200) (176) -- (42) (62) - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareholders .... (144,098) (215,125) (235,111) (400,848) (73,434) (142,775) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) from capital share transactions (Note 7) .................. 1,053,787 291,140 1,576,559 (202,496) 314,639 (690,943) - ------------------------------------------------------------------------------------------------------------------------------------ Total increase (decrease) in net assets 1,054,690 291,140 1,576,585 (202,477) 314,590 (690,996) NET ASSETS: Beginning of period ........................ 4,522,611 4,231,471 7,170,574 7,373,051 2,498,925 3,189,921 - ------------------------------------------------------------------------------------------------------------------------------------ End of period .............................. $5,577,301 $4,522,611 $8,747,159 $7,170,574 $2,813,515 $2,498,925 ====================================================================================================================================
69 JPMorgan Funds - -------------------------------------------------------------------------------- Statement of Changes in Net Assets For the periods indicated (unaudited) STATEMENT OF CHANGES IN NET ASSETS For the periods indicated (unaudited) (Amounts in Thousands)
Federal Prime Tax Free Money Market Money Market Money Market Fund II Fund II Fund ------------------------ -------------------------- - ------------------------ 9/1/00 Year 9/1/00 Year 9/1/00 Year Through Ended Through Ended Through Ended 2/28/01 8/31/00 2/28/01 8/31/00 2/28/01 8/31/00 ==================================================================================================================================== INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income ...................... $ 47,252 $ 60,450 $ 690,123 $ 615,937 $ 32,094 $ 54,183 Net realized gain (loss) on investments .... 75 (24) (72) (60) (23) (60) Change in net unrealized appreciation of investments ............................. -- -- -- 3,884 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Increase in net assets from operations . 47,327 60,426 690,051 619,761 32,071 54,123 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ...................... (47,239) (60,450) (690,157) (615,944) (32,150) (54,097) Net realized gain on investment transactions (24) -- (13) (121) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions to shareholders .... (47,263) (60,450) (690,170) (616,065) (32,150) (54,097) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase from capital share transactions (Note 7) ........................ 749,559 45,691 16,861,160 2,947,065 121,268 294,372 - ------------------------------------------------------------------------------------------------------------------------------------ Total increase in net assets ........... 749,623 45,667 16,861,041 2,950,761 121,189 294,398 NET ASSETS: Beginning of period ........................ 1,142,154 1,096,487 12,757,302 9,806,541 1,654,664 1,360,266 - ------------------------------------------------------------------------------------------------------------------------------------ End of period .............................. $1,891,777 $1,142,154 $29,618,343 $12,757,302 $1,775,853 $1,654,664 ====================================================================================================================================
70 JPMorgan Funds - -------------------------------------------------------------------------------- Statement of Changes in Net Assets For the periods indicated (unaudited) STATEMENT OF CHANGES IN NET ASSETS For the periods indicated (unaudited) (Amounts in Thousands)
New York Tax Free California Tax Free Money Market Money Market Fund Fund ---------------------------- - ---------------------- 9/1/00 Year 9/1/00 Year Through Ended Through Ended 2/28/01 8/31/00 2/28/01 8/31/00 ================================================================================================================================= INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment income ...................................... $ 33,158 $ 53,819 $ 1,364 $ 1,912 Net realized gain (loss) on investments .................... 3 60 (2) -- - --------------------------------------------------------------------------------------------------------------------------------- Increase in net assets from operations ................ 33,161 53,879 1,362 1,912 - --------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ...................................... (33,174) (53,800) (1,364) (1,912) Net realized gain on investment transactions ............... (27) -- - -- -- - --------------------------------------------------------------------------------------------------------------------------------- Total distributions to shareholders ................... (33,201) (53,800) (1,364) (1,912) - --------------------------------------------------------------------------------------------------------------------------------- Net increase from capital share transactions (Note 7) ........................................ 390,264 326,622 11,038 9,879 - --------------------------------------------------------------------------------------------------------------------------------- Total increase in net assets .......................... 390,224 326,701 11,036 9,879 NET ASSETS: Beginning of period ........................................ 1,831,212 1,504,511 77,519 67,640 - --------------------------------------------------------------------------------------------------------------------------------- End of period .............................................. $2,221,436 $1,831,212 $88,555 $77,519 =================================================================================================================================
71 - -------------------------------------------------------------------------------- JPMorgan Funds Notes to Financial Statements (unaudited) 1. Organization and Significant Accounting Policies Mutual Fund Trust (the "Trust") was organized as a Massachusetts business trust, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, management investment company. Effective February 21, 2001, the following eight separate portfolios of the Trust (collectively, the "Funds") were renamed with the approval of the Board of Trustees of the Trust:
New Name Old Name - ------------------------------------------------------------------------------------------------------------------------------ JPMorgan 100% U.S. Treasury Securities Money Chase Vista 100% U.S. Treasury Securities Market Fund ("USTS") Money Market Fund JPMorgan U.S. Government Money Market Fund ("USG") Chase Vista U.S. Government Money Market Fund JPMorgan Treasury Plus Money Market Fund ("TP") Chase Vista Treasury Plus Money Market Fund JPMorgan Federal Money Market Fund II ("FED") Chase Vista Federal Money Market Fund JPMorgan Prime Money Market Fund II ("PRM") Chase Vista Prime Money Market Fund JPMorgan Tax Free Money Market Fund ("TF") Chase Vista Tax Free Money Market Fund JPMorgan New York Tax Free Money Market Fund ("NYTF") Chase Vista New York Tax Free Money Market Fund JPMorgan California Tax Free Money Money Market Fund ("CTF") Chase Vista California Tax Free Money Money Market Fund
The Funds offer various classes of shares as follows:
Fund Classes Offered - ------------------------------------------------------------------------------------------------------------------------------ USTS Vista, Premier, Institutional USG Vista, Premier, Institutional TP Vista, Premier, Institutional FED Vista, Premier, Institutional, Reserve PRM Vista, Premier, Institutional, Reserve, B Shares, C Shares TF Vista, Premier, Institutional, Reserve NYTF Vista, Reserve CTF Vista
All classes of shares have equal rights as to earnings, assets and voting privileges except that each class may bear different transfer agent, distribution and shareholder servicing expenses and each class has exclusive voting rights with respect to its distribution plan and shareholder servicing agreement. The following is a summary of significant accounting policies followed by the Funds: The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. 72 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) A. Valuation of investments -- Money market instruments are valued at amortized cost which approximates market value. The Trust's use of amortized cost is subject to the Trust's compliance with certain conditions as specified under Rule 2a-7 of the 1940 Act. B. Repurchase and reverse repurchase agreements -- It is each Fund's policy that repurchase agreements are fully collateralized by U.S. Treasury and Government Agency securities. All collateral is held by the Fund's custodian bank, subcustodian or a bank in which the custodian bank has entered into a subcustodian agreement or is segregated in the Federal Reserve Book Entry System. If the seller of a repurchase agreement defaults and the value of the collateral declines, or if the seller enters into an insolvency proceeding, realization of the collateral may be delayed or limited. At all times that a reverse repurchase agreement is outstanding, the Fund segregates assets with a value at least equal to its obligation under the agreement. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Fund's use of proceeds from the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund's obligation to repurchase the securities. The Fund's use of the proceeds of the reverse repurchase agreement may also effectively be restricted pending such decisions. During the six months ended February 28, 2001, PRM entered into two reverse repurchase agreements totaling $98,760,000 at 6.55%. Interest expense totaled $53,907, which is included in Other expenses on the Statement of Operations. The agreements, which matured September 25, 2000, were collateralized by Federal Home Loan Bank notes with a par value totaling $100,000,000, due November 24, 2000 and December 8, 2000, respectively. C. Security transactions and investment income -- Investment transactions are accounted for on the trade date (the date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Interest income is determined on the basis of coupon interest accrued adjusted for amortization of premiums and accretion of discounts. D. Federal income taxes -- Each Fund is treated as a separate taxable entity for Federal income tax purposes. The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders all of its distributable net income, including net realized gain on investments. In addition, the Fund intends to make distributions as required to avoid excise taxes. Accordingly, no provision for Federal income or excise tax is necessary. 73 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) E. Distributions to shareholders -- Dividends and distributions paid to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations, which may differ from generally accepted accounting principles. To the extent these "book/tax" differences are permanent in nature (i.e., that they result from other than timing of recognition -- "temporary differences"), such amounts are reclassified within the capital accounts based on their Federal income tax-basis treatment. Dividends and distributions which exceed net investment income or net realized capital gains for financial reporting purposes but not for tax purposes are reported as distributions in excess of net investment income or net realized capital gains. F. Income and Expenses -- Expenses directly attributable to a Fund are charged to that Fund; other expenses are allocated proportionately among each of the Funds within the Trust in relation to the net assets of each Fund or on another reasonable basis. Expenses directly attributable to a particular class are charged directly to such class. In calculating net asset value per share of each class, investment income, realized and unrealized gains and losses and expenses other than class specific expenses (e.g. transfer agent fees), are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. 2. Fees and Other Transactions with Affiliates A. Investment advisory fee-- Pursuant to separate Investment Advisory Agreements, J.P. Morgan Fleming Asset Management (USA) Inc. ("JPMFAM" or "Adviser") (formerly Chase Fleming Asset Management (USA) Inc., formerly Chase Asset Management Inc.) acts as the investment adviser to the Funds. JPMFAM is a direct wholly-owned subsidiary of J.P. Morgan Chase & Co. (formerly The Chase Manhattan Corporation). As investment adviser, JPMFAM supervises the investments of each Fund and for such services is paid a fee. The fee is accrued daily and paid monthly at an annual rate equal to 0.10% of the average daily net assets for each respective Fund. The Adviser (and its predecessor) voluntarily waived fees as outlined in Note 2.E. below. Prior to February 22, 2001, The Chase Manhattan Bank ("Chase"), also a direct wholly-owned subsidiary of J.P. Morgan Chase & Co. acted as the investment advisor to each Fund and JPMFAM acted as the sub-investment adviser to each Fund. Pursuant to a Sub-Investment Investment Advisory Agreement between Chase and JPMFAM for each fund other than TF, JPMFAM was entitled to 74 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) receive a fee, payable by Chase from its advisory fee, at an annual rate equal to 0.03% of each Fund's average daily net assets. The Investment Advisory Agreement between each Fund and Chase has been assigned to JPMFAM. B. Shareholder and Fund servicing fees -- The Trust adopted Administrative Service Plans which, among other things, provide that the Trust on behalf of the Funds may obtain the services of one or more Shareholder Servicing Agents. For its services, each Shareholder Servicing Agent receives a fee. The fee is computed daily and paid monthly at an annual rate of 0.35% of the average daily net assets of the Vista and Reserve Classes, 0.25% of the average daily net assets of the Premier, B Share and C Share Classes, and 0.10% of the average daily net assets of the Institutional Class of each Fund. Chase and certain of its affiliates are the only Shareholder Servicing Agents. The Shareholder Servicing Agents have voluntarily waived fees as outlined in Note 2.E. below. C Distribution and sub-administrations fees -- Pursuant to a Distribution and Sub-Administration Agreement, J.P. Morgan Fund Distributors, Inc. (the "Distributor") (formerly Vista Fund Distributors, Inc.), a wholly-owned subsidiary of The BISYS Group, Inc. ("BISYS"), acts as the Trust's exclusive underwriter and promotes and arranges for the sale of each Fund's shares. In addition, the Distributor provides certain sub-administration services to the Trust, including providing officers, clerical staff and office space for an annual fee computed daily and paid monthly of 0.05% of the average daily net assets of each Fund. The Trustees have adopted plans of distribution under the 1940 Act for the Premier Shares of USG (the "Premier Plan"), for the Vista Shares of each Fund (the "Vista Plan") except for PRM, for the Reserve Shares of FED, PRM, TF and NYTF (the "Reserve Plan") and for the B Shares and C Shares of PRM (the "B Plan" and "C Plan", respectively). There are no distribution plans for the Institutional Shares. The Premier, Vista, Reserve, B and C Share Plans pay the Distributor a distribution fee. The fee is computed daily and paid monthly at an annual rate of: 0.10% of the average daily net assets of the Vista Class of each Fund (except PRM), 0.10% of the average daily net assets of the USG Premier Class, 0.30% of the average daily net assets of the Reserve Class of FED, PRM, TF and NYTF, and 0.75% of the average daily net assets of the B Shares and C Shares of PRM. The Distributor voluntarily waived fees as outlined in Note 2.E. below. 75 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) D. Administration fee -- Pursuant to the Administration Agreement, Chase (the "Administrator") provides certain administration services and facilities to each Fund at a fee computed daily and paid monthly at the annual rate equal to 0.05% of the respective Fund's average daily net assets. The Administrator voluntarily waived fees as outlined in Note 2.E. below. E. Waiver of fees -- For the six months ended February 28, 2001, the Funds' vendors voluntarily waived fees for each of the Funds as follows (amounts in thousands): Shareholder Administration Servicing Distribution - -------------------------------------------------------------------------------- USTS ................... $1,022 $ 308 $1,488 USG .................... 1,858 620 910 TP ..................... 503 726 -- FED .................... -- 318 -- PRM .................... 1,129 3,935 -- TF ..................... -- 807 -- NYTF ................... 484 -- 580 CTF .................... -- 92 23 F. Other -- Certain officers of the Trust are officers of the Distributor or of its parent corporation, BISYS. Chase provides portfolio accounting and custody services for the Funds. Compensation for such services is presented in the Statement of Operations as custodian fees. Custodian fees are subject to reduction by credits earned by each Fund, based on cash balances held by Chase as custodian. Such earnings credits are presented separately in the Statement of Operations. The Funds could have invested the cash balances utilized in connection with the earnings credit arrangements in income producing assets if they had not entered into such arrangements. The Distributor voluntarily reimbursed expenses of the Funds in the amounts as shown on the Statement of Operations. 3. Concentration of Credit Risk As of February 28, 2001, PRM invested 90.3% of its net assets in securities issued by institutions in the financial services industry including banks, broker dealers and insurance companies. General economic conditions, as well as exposure to credit losses arising from possible financial difficulties of borrowers, play an important role in the operation of the financial services industry. TF, NYTF and CTF invest substantially all of their assets in a diversified portfolio of debt obligations issued by states, territories and possessions of the United States and by the District of Columbia, and by their 76 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) political subdivisions and duly constituted authorities, with NYTF primarily investing in issuers in the State of New York, and CTF primarily investing in issuers in the State of California. As of February 28, 2001, TF invested 15.0% of its net assets in issuers in the State of Texas. The issuers' abilities to meet their obligations may be affected by economic or political developments in a specific state or region. 4. Trustee Compensation The Funds have adopted an unfunded noncontributory defined benefit pension plan covering all independent trustees of the Funds who will have served as an independent trustee for at least five years at the time of retirement. Benefits under this plan are based on compensation and years of service. Pension expenses for the six months ended February 28, 2001, included in Trustees Fees in the Statement of Operations and accrued pension liability included in Other Accrued Liabilities in the Statement of Assets and Liabilities, were as follows (in thousands): Pension Accrued Fund Expenses Pension Liability - -------------------------------------------------------------------------------- USTS ............................. $ 48 $ 370 USG .............................. 75 683 TP ............................... 26 257 FED .............................. 13 104 PRM .............................. 189 1,199 TF ............................... 17 137 NYTF ............................. 18 141 CTF .............................. 1 6 77 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) 5. Reorganizations On October 20, 2000, PRM acquired all the net assets of Chase Vista Cash Management Fund (CM) pursuant to a Reorganization Plan approved by CM shareholders on October 5, 2000. The transaction was structured for tax purposes to qualify as a tax-free reorganization under the Internal Revenue Code. Under the Reorganization Plan, each shareholder of CM received shares in PRM with a value equal to their holdings in CM. Holders of Vista Class Shares in CM received Vista Class Shares in PRM, holders of Premier Class Shares in CM received Premier Class Shares in PRM and holders of Institutional Class Shares in CM received Institutional Class Shares in PRM. The following is a summary of shares outstanding, net assets and net asset values per share immediately before and after the reorganization: After Before Reorganization Reorganization ------------------------------- --------------- CM PRM PRM -------------- -------------- --------------- Vista Shares Shares ................ 6,780,303,378 2,020,776,873 8,801,080,251 Net Assets ............ $6,779,513,682 $2,017,127,824 $ 8,796,641,506 Net Asset Value ....... $1.00 $1.00 $1.00 Premier Shares Shares ................ 383,299,637 1,852,607,948 2,235,907,585 Net Assets ............ $ 383,301,511 $1,852,650,154 $ 2,235,951,665 Net Asset Value ....... $1.00 $1.00 $1.00 Institutional Shares Shares ................ 3,333,130,912 9,511,943,317 12,845,074,229 Net Assets ............ $3,332,909,551 $9,515,447,112 $12,848,356,663 Net Asset Value ....... $1.00 $1.00 $1.00 Reserve Shares Shares ................ 1,211 1,211 Net Assets ............ $ 1,211 $ 1,211 Net Asset Value ....... $1.00 $1.00 B Shares Shares ................ 20,765,128 20,765,128 Net Assets ............ $ 20,763,172 $ 20,763,172 Net Asset Value ....... $1.00 $1.00 C Shares Shares ................ 139,800 139,800 Net Assets ............ $ 139,808 $ 139,808 Net Asset Value ....... $1.00 $1 78 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) On February 16, 2001, PRM acquired all the net assets of Chase Money Market Fund (CMMF) pursuant to a Reorganization Plan approved by CMMF shareholders on January 26, 2001. The transaction was structured for tax purposes to qualify as a tax-free reorganization under the Internal Revenue Code. Under the Reorganization Plan, each shareholder of CMMF received shares in PRM with a value equal to their holdings in CMMF. Holders of Investor Class Shares in CMMF received Vista Class Shares in PRM, holders of Premier Class Shares in CMMF received Premier Class Shares in PRM. The following is a summary of shares outstanding, net assets and net asset values per share immediately before and after the reorganization: After Before Reorganization Reorganization ------------------------------- --------------- CMMF PRM PRM ------------ --------------- --------------- Vista Shares Shares ................ 10,186,612,136 10,192,134,877 Net Assets ............ $10,182,180,207 $10,187,704,072 Net Asset Value ....... $1.00 $1.00 Premier Shares Shares ................ 2,041,521,265 2,148,011,818 Net Assets ............ $ 2,041,548,458 $ 2,148,063,620 Net Asset Value ....... $1.00 $1.00 Institutional Shares Shares ................ 18,927,279,631 18,927,279,631 Net Assets ............ $18,930,648,847 $18,930,648,847 Net Asset Value ....... $1.00 $1.00 Reserve Shares Shares ................ 1,232 1,232 Net Assets ............ $ 1,231 $ 1,231 Net Asset Value ....... $1.00 $1.00 B Shares Shares ................ 11,626,267 11,626,267 Net Assets ............ $ 11,624,360 $ 11,624,360 Net Asset Value ....... $1.00 $1.00 C Shares Shares ................ 186,694 186,694 Net Assets ............ $ 186,703 $ 186,703 Net Asset Value ....... $1.00 $1.00 Investor Shares Shares ................ 5,522,741 Net Assets ............ $ 5,523,865 Net Asset Value ....... $1.00 Premier Shares Shares ................ 106,490,553 Net Assets ............ $106,515,162 Net Asset Value ....... $1.00 79 JPMorgan FUNDS - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) 6. Subsequent Events On April 3, 2001, the Board of Trustees of Mutual Fund Trust approved a Plan of Reorganization (the "Reorganization Plan") between the Funds listed below. Under the Reorganization Plan, the acquired Fund would transfer all of its assets and liabilities to the acquiring Fund in a tax-free reorganization. In exchange, shareholders of the acquired Fund would receive shares of the acquiring Fund with a value equal to their respective holdings in the acquired Fund. The costs and expenses associated with the Reorganization will be borne by the Advisor and not by the Funds (or by the shareholders of either Fund). The Reorganization can be consummated only if, among other things, it is approved by the vote of a majority (as defined by the 1940 Act) of outstanding voting securities of the Funds. Acquiring Fund Acquired Fund - -------------------------------------------------------------------------------- TP J.P. Morgan Treasury Money Market Reserves Fund TP J.P. Morgan Institutional Treasury Money Market Fund TP J.P. Morgan Institutional Service Treasury Money Market Fund FED J.P. Morgan Federal Money Market Fund FED J.P. Morgan Institutional Federal Money Market Fund FED J.P. Morgan Institutional Service Federal Money Market Fund PRM J.P. Morgan Prime Money Market Fund PRM J.P. Morgan Institutional Prime Money Market Fund PRM J.P. Morgan Institutional Service Prime Money Market Fund PRM J.P. Morgan Manager's Money Market Fund PRM JPM Institutional Money Market Fund, Ltd. PRM J.P. Morgan Institutional Service Money Market Fund, Ltd. PRM J.P. Morgan Prime Money Market Reserves Fund PRM J.P. Morgan Institutional Prime Direct Money Market Fund PRM J.P. Morgan Prime Cash Management Fund TF J.P. Morgan Tax Exempt Money Market Fund TF J.P. Morgan Institutional Tax Exempt Money Market Fund TF J.P. Morgan Institutional Service Tax Exempt Money Market Fund 80 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) 7. Capital Share Transactions Capital share transactions were as follows for the periods presented (amounts in thousands): 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 7,218,528 7,218,528 $ 171,318 171,318 $ 4,354,138 4,354,138 Shares issued in reinvestment of distributions 69,139 69,139 2,521 2,521 17,436 17,436 Shares redeemed (7,100,597) (7,100,597) (157,525) (157,525) (3,521,171) (3,521,171) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 187,070 187,070 $ 16,314 16,314 $ 850,403 850,403 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 12,269,163 12,269,163 $ 398,033 398,033 $ 5,690,875 5,690,875 Shares issued in reinvestment of distributions 127,472 127,472 3,353 3,353 32,950 32,950 Shares redeemed (12,174,395) (12,174,395) (309,408) (309,408) (5,746,903) (5,746,903) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ 222,240 222,240 $ 91,978 91,978 $ (23,078) (23,078) ====================================================================================================================================
U.S. GOVERNMENT MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 11,273,845 11,273,845 $ 4,020,136 4,020,136 $ 15,158,244 15,158,244 Shares issued in reinvestment of distributions 47,761 47,761 14,249 14,249 39,604 39,604 Shares redeemed (10,764,064) (10,764,064) (4,085,262) (4,085,262) (14,127,954) (14,127,954) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ 557,542 557,542 $ (50,877) (50,877) $ 1,069,894 1,069,894 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 21,070,138 21,070,138 $ 7,472,951 7,472,951 $ 24,558,779 24,558,779 Shares issued in reinvestment of distributions 99,652 99,652 30,191 30,191 78,208 78,208 Shares redeemed (21,310,059) (21,310,059) (7,291,128) (7,291,128) (24,911,228) (24,911,228) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ (140,269) (140,269) $ 212,014 212,014 $ (274,241) (274,241) ====================================================================================================================================
81 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) TREASURY PLUS MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 5,667,021 5,667,021 $ 1,733,992 1,733,992 $ 5,682,951 5,682,951 Shares issued in reinvestment of distributions 25,378 25,378 2,511 2,511 18,365 18,365 Shares redeemed (5,668,246) (5,668,246) (1,616,727) (1,616,727) (5,530,606) (5,530,606) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 24,153 24,153 $ 119,776 119,776 $ 170,710 170,710 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 10,985,282 10,985,282 $ 2,838,587 2,838,587 $ 9,562,850 9,562,850 Shares issued in reinvestment of distributions 54,114 54,114 5,041 5,041 36,706 36,706 Shares redeemed (11,406,802) (11,406,802) $(3,091,819) (3,091,819) (9,674,902) (9,674,902) - ------------------------------------------------------------------------------------------------------------------------------------ Net decrease in Fund shares outstanding $ (367,406) (367,406) $ (248,191) (248,191) $ (75,346) (75,346) ====================================================================================================================================
FEDERAL MONEY MARKET FUND II
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional Reserve * - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 708,872 708,872 $ 289,945 289,945 $ 2,115,267 2,115,267 $ 2 2 Shares issued in reinvestment of distributions 10,784 10,784 6,711 6,711 2,335 2,335 24 24 Shares redeemed (623,235) (623,235) (263,210) (263,210) (1,497,910) (1,497,910) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 96,421 96,421 $ 33,446 33,446 $ 619,692 619,692 $26 26 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 1,370,953 1,370,953 $ 373,817 373,817 $ 2,941,384 2,941,384 $ 1 1 Shares issued in reinvestment of distributions 22,852 22,852 13,241 13,241 4,454 4,454 -- -- Shares redeemed (1,367,229) (1,367,229) (406,427) (406,427) (2,907,355) (2,907,355) -- -- Net increase (decrease) in Fund shares - ------------------------------------------------------------------------------------------------------------------------------------ outstanding $ 26,576 26,576 $ (19,369) (19,369) $ 38,483 38,483 $ 1 1 ====================================================================================================================================
* Reserve Shares commencement of offering, 7/31/00. 82 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) PRIME MONEY MARKET FUND II
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 17,566,582 17,566,583 $ 9,233,024 9,232,997 $ 60,264,436 60,264,436 Shares issued in connection with the acquisition of Chase Vista Cash Management Fund (Note 5) 6,779,514 6,780,303 383,301 383,300 3,332,910 3,333,131 Shares issued in connection with the acquisition of Chase Money Market Fund (Note 5) 5,523 5,523 106,515 106,491 - -- -- Shares issued in reinvestment of distributions 137,134 137,134 29,242 29,242 268,238 268,238 Shares redeemed (15,754,899) (15,754,899) (9,534,082) (9,534,082) (55,958,220) (55,958,218) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 8,733,854 8,734,644 $ 218,000 217,948 $ 7,907,364 7,907,587 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 7,131,346 7,131,346 $ 13,034,051 13,034,051 $ 82,896,178 82,896,178 Shares issued in reinvestment of distributions 39,797 39,797 37,777 37,777 352,349 352,349 Shares redeemed (6,207,576) (6,207,576) (12,325,229) (12,325,229) (81,986,141) (81,986,141) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 963,567 963,567 $ 746,599 746,599 $ 1,262,386 1,262,386 ====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------ Reserve * B C - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 122 122 $ 52,684 52,684 $ 1,076 1,076 Shares issued in reinvestment of distributions -- -- 280 280 3 3 Shares redeemed -- -- (51,409) (51,409) (814) (814) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 122 122 $ 1,555 1,555 $ 265 265 ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 1 1 $ 135,290 135,290 $ 7,817 7,817 Shares issued in reinvestment of distributions -- -- 806 806 8 8 Shares redeemed -- -- (161,484) (161,484) (7,925) (7,925) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ 1 1 $ (25,388) (25,388) $ (100) (100) ====================================================================================================================================
* Reserve Shares commencement of offering, 7/31/00. 83 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) TAX FREE MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------ Vista Premier Institutional Reserve * - ------------------------------------------------------------------------------------------------------------------------------------ Amount Shares Amount Shares Amount Shares Amount Shares - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 1,393,591 1,393,591 $ 143,139 143,139 $ 2,747,117 2,747,117 $ -- -- Shares issued in reinvestment of distributions 6,172 6,172 990 990 7,194 7,194 -- -- Shares redeemed (1,321,879) (1,321,879) (165,103) (165,103) (2,689,953) (2,689,953) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ 77,884 77,884 $ (20,974) (20,974) $ 64,358 64,358 $ -- -- ==================================================================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------------------------------------------------------ Shares sold $ 2,078,075 2,078,075 $ 343,481 343,481 $ 3,019,983 3,019,983 $ 1 1 Shares issued in reinvestment of distributions 12,007 12,007 2,982 2,982 9,475 9,475 -- -- Shares redeemed (1,949,740) (1,949,740) (356,488) (356,488) (2,865,404) (2,865,404) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in Fund shares outstanding $ 140,342 140,342 $ (10,025) (10,025) $ 164,054 164,054 $ 1 1 ====================================================================================================================================
* Reserve Shares commencement of offering, 7/31/00 NEW YORK TAX FREE MONEY MARKET FUND
- ------------------------------------------------------------------------------------ Vista Reserve * - ------------------------------------------------------------------------------------ Amount Shares Amount Shares - ------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------ Shares sold $ 2,035,723 2,035,723 $ -- -- Shares issued in reinvestment of distributions 20,268 20,268 -- -- Shares redeemed (1,665,727) (1,665,727) -- -- - ------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 390,264 390,264 $ -- -- ==================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------ Shares sold $ 3,464,112 3,464,112 $ 1 1 Shares issued in reinvestment of distributions 37,398 37,398 -- -- Shares redeemed (3,174,889) (3,174,889) -- -- - ------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 326,621 326,621 $ 1 1 ====================================================================================
* Reserve Shares commencement of offering, 7/31/00. 84 JPMorgan Funds - -------------------------------------------------------------------------------- Notes to Financial Statements (unaudited) (continued) CALIFORNIA TAX FREE MONEY MARKET FUND
- ------------------------------------------------------------------------------------ Vista - ------------------------------------------------------------------------------------ Amount Shares - ------------------------------------------------------------------------------------ Six Months Ended February 28, 2001 - ------------------------------------------------------------------------------------ Shares sold $ 148,497 148,497 Shares issued in reinvestment of distributions 457 457 Shares redeemed (137,916) (137,916) - ------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 11,038 11,038 ==================================================================================== Year Ended August 31, 2000 - ------------------------------------------------------------------------------------ Shares sold $ 243,038 243,038 Shares issued in reinvestment of distributions 732 732 Shares redeemed (233,891) (233,891) - ------------------------------------------------------------------------------------ Net increase in Fund shares outstanding $ 9,879 9,879 ====================================================================================
85 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
100% U.S. Treasury Securities Money Market Fund^ - ------------------------------------------------------------------------------ Vista Shares - ------------------------------------------------------------------------------ 9/1/00 Year Ended August 31, 12/1/95++ 9/1/00 Through ---------------------------------------- Through Through 2/28/01 2000 1999 1998 1997 8/31/96 2/28/01 ------- ------ ------ ------ ------ - --------- ------- Per Share Operating Performance Net Asset Value, Beginning of Period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 ------ ------ ------ ------ ------ - ------ ----- Income from Investment Operations: Net Investment Income .......................... 0.03 0.05 0.04 0.05 0.05 0.04 0.03 Less Dividends from Net Investment Income ............................ 0.03 0.05 0.04 0.05 0.05 0.04 0.03 ------ ------ ------ ------ ------ - ------ ----- Net Asset Value, End of Period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 ====== ====== ====== ====== ====== ====== ===== Total Return ...................................... 2.79% 5.02% 4.31% 4.92% 4.87% 3.50% 2.84% Ratios/Supplemental Data: Net Assets, End of Period (millions) ........... $3,723 $3,535 $3,312 $3,051 $2,376 $1,672 $ 132 Ratios to Average Net Assets#: Expenses ....................................... 0.59% 0.59% 0.59% 0.59% 0.59% 0.60% 0.48% Net Investment Income .......................... 5.54% 4.92% 4.15% 4.78% 4.74% 4.58% 5.65% Expenses Without Waivers, Reimbursements and Earnings Credits ......................... 0.71% 0.71% 0.71% 0.71% 0.71% 0.68% 0.52% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .......... 5.42% 4.80% 4.03% 4.66% 4.62% 4.50% 5.61% ==================================================================================================================================== 100% U.S. Treasury Securities Money Market Fund^ - ----------------------------------------------------- Premier Shares - ----------------------------------------------------- Year Ended August 31, 6/3/96* ---------------------------------------- Through 2000 1999 1998 1997 8/31/96 ----- ----- ----- ----- - ------- Per Share Operating Performance Net Asset Value, Beginning of Period .............. $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- - ----- Income from Investment Operations: Net Investment Income .......................... 0.05 0.04 0.05 0.05 0.01 Less Dividends from Net Investment Income ............................ 0.05 0.04 0.05 0.05 0.01 ----- ----- ----- ----- - ----- Net Asset Value, End of Period .................... $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== Total Return ...................................... 5.12% 4.40% 5.00% 4.91% 1.11% Ratios/Supplemental Data: Net Assets, End of Period (millions) ........... $ 116 $ 24 $ 22 $ 6 $ 1 Ratios to Average Net Assets#: Expenses ....................................... 0.49% 0.50% 0.51% 0.55% 0.42% Net Investment Income .......................... 5.02% 4.22% 4.99% 4.80% 3.45% Expenses Without Waivers, Reimbursements and Earnings Credits ......................... 0.53% 0.56% 0.78% 0.80% 0.42% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .......... 4.98% 4.16% 4.72% 4.55% 3.45% ====================================================================================================================
++ In 1996, the Fund changed its fiscal year-end from November 30 to August 31. * Commencement of offering of class of shares. # Short periods have been annualized. ^ Formerly Chase Vista 100% U.S. Treasury Securities Money Market Fund. See notes to financial statements. 86 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited)(continued) FINANCIAL HIGHLIGHTS (unaudited)
100% U.S. Treasury Securities Money Market Fund^ - ---------------------------------------------------- Institutional Shares - ---------------------------------------------------- 9/1/00 Year Ended August 31, 6/3/96* Through - ------------------------------ Through 2/28/01 2000 1999 1998 1997 8/31/96 ------- ---- ---- - ---- ---- ------- Per Share Operating Performance Net Asset Value, Beginning of Period ........................................ $ 1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00 ------ ----- ----- - ------ ----- ----- Income from Investment Operations: Net Investment Income .................................................... 0.03 0.05 0.05 0.05 0.05 0.01 Less Dividends from Net Investment Income ................................ 0.03 0.05 0.05 0.05 0.05 0.01 ------ ----- ----- - ------ ----- ----- Net Asset Value, End of Period .............................................. $ 1.00 $1.00 $1.00 $ 1.00 $1.00 $1.00 ====== ===== ===== ====== ===== ===== Total Return ................................................................ 2.96% 5.38% 4.67% 5.30% 5.20% 1.23% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $1,722 $ 872 $ 895 $1,796 $ 81 $ 1 Ratios to Average Net Assets#: Expenses ................................................................. 0.25% 0.25% 0.24% 0.21% 0.27% 0.21% Net Investment Income .................................................... 5.88% 5.26% 4.51% 5.13% 5.06% 3.65% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.34% 0.34% 0.32% 0.25% 0.27% 0.21% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 5.79% 5.17% 4.43% 5.09% 5.06% 3.65% ====================================================================================================================================
* Commencement of offering of class of shares. # Short periods have been annualized. ^ Formerly Chase Vista 100% U.S. Treasury Securities Money Market Fund. See notes to financial statements. 87 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
U.S. Government Money Market Fund^ - --------------------------------------------------- Vista Shares - --------------------------------------------------- 9/1/00 Year Ended August 31, Through - ---------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- - ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ........................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ - ------ ------ ------ Income from Investment Operations: Net Investment Income .................................................... 0.03 0.05 0.04 0.05 0.05 0.05 Less Dividends from Net Investment Income ................................ 0.03 0.05 0.04 0.05 0.05 0.05 ------ ------ ------ - ------ ------ ------ Net Asset Value, End of Period .............................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== ====== Total Return ................................................................ 2.91% 5.48% 4.55% 5.14% 5.04% 4.97% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $3,956 $3,398 $3,538 $3,033 $2,139 $2,057 Ratios to Average Net Assets#: Expenses ................................................................. 0.59% 0.59% 0.59% 0.59% 0.59% 0.65% Net Investment Income .................................................... 5.78% 5.35% 4.46% 5.01% 4.93% 4.83% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.68% 0.69% 0.69% 0.70% 0.72% 0.73% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 5.69% 5.25% 4.36% 4.90% 4.80% 4.75% ====================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista U.S. Government Money Market Fund. See notes to financial statements. 88 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
U.S. Government Money Market Fund^ -------------------------------------------------------------- Premier Shares ------------------------------------------------------------- 9/1/00 Year Ended August 31, Through --------------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $ 1.00 $ 1.00 $1.00 $ 1.00 $1.00 $1.00 ------ ------ ----- ------ ----- ----- Income from Investment Operations: Net Investment Income .................. 0.03 0.05 0.05 0.05 0.05 0.05 Less Dividends from Net Investment Income .................... 0.03 0.05 0.05 0.05 0.05 0.05 ------ ------ ----- ------ ----- ----- Net Asset Value, End of Period ............ $ 1.00 $ 1.00 $1.00 $ 1.00 $1.00 $1.00 ====== ====== ===== ====== ===== ===== Total Return .............................. 2.98% 5.62% 4.70% 5.25% 5.08% 5.15% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $1,083 $1,134 $ 922 $1,084 $ 837 $ 802 Ratios to Average Net Assets#: Expenses ............................... 0.45% 0.45% 0.45% 0.48% 0.55% 0.55% Net Investment Income .................. 5.96% 5.50% 4.60% 5.12% 4.97% 5.04% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.58% 0.58% 0.58% 0.60% 0.60% 0.59% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.83% 5.37% 4.47% 5.00% 4.92% 5.00% =============================================================================================================== U.S. Government Money Market Fund^ ---------------------------------------------------------- Institutional Shares ---------------------------------------------------------- 9/1/00 Year Ended August 31, Through ---------------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ ------ ------ ------ Income from Investment Operations: Net Investment Income .................. 0.03 0.06 0.05 0.05 0.05 0.05 Less Dividends from Net Investment Income .................... 0.03 0.06 0.05 0.05 0.05 0.05 ------ ------ ------ ------ ------ ------ Net Asset Value, End of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== ====== Total Return .............................. 3.08% 5.83% 4.92% 5.51% 5.40% 5.45% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $3,708 $2,639 $2,913 $2,797 $2,955 $1,182 Ratios to Average Net Assets#: Expenses ............................... 0.26% 0.26% 0.25% 0.24% 0.24% 0.27% Net Investment Income .................. 6.09% 5.66% 4.80% 5.36% 5.29% 5.30% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.32% 0.33% 0.31% 0.24% 0.24% 0.27% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 6.03% 5.59% 4.74% 5.36% 5.29% 5.30% ===========================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista U.S. Government Money Market Fund. See notes to financial statements. 89 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Treasury Plus Money Market Fund^ --------------------------------------------------------- Vista Shares --------------------------------------------------------- 9/1/00 Year Ended August 31, 5/6/96* Through ---------------------------------- Through 2/28/01 2000 1999 1998 1997 8/31/96 ------- ---- ---- ---- ---- ------- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------ ------ ------ ------ ------ ------ Income from Investment Operations: Net Investment Income .................. 0.03 0.05 0.04 0.05 0.05 0.02 Less Dividends from Net Investment Income .................... 0.03 0.05 0.04 0.05 0.05 0.02 ------ ------ ------ ------ ------ ------ Net Asset Value, End of Period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ====== ====== ====== ====== ====== ====== Total Return .............................. 2.86% 5.29% 4.39% 5.05% 4.89% 1.50% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $1,391 $1,367 $1,734 $1,316 $1,606 $1,382 Ratios to Average Net Assets#: Expenses ............................... 0.59% 0.59% 0.59% 0.59% 0.59% 0.59% Net Investment Income .................. 5.70% 5.14% 4.27% 4.92% 4.79% 4.63% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.70% 0.71% 0.69% 0.70% 0.70% 0.73% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.59% 5.02% 4.17% 4.81% 4.68% 4.49% ========================================================================================================== Treasury Plus Money Market Fund^ -------------------------------------------------- Premier Shares -------------------------------------------------- 9/1/00 Year Ended August 31, Through --------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- Income from Investment Operations: Net Investment Income .................. 0.03 0.05 0.04 0.05 0.05 0.05 Less Dividends from Net Investment Income .................... 0.03 0.05 0.04 0.05 0.05 0.05 ----- ----- ----- ----- ----- ----- Net Asset Value, End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return .............................. 2.93% 5.44% 4.54% 5.18% 4.98% 5.07% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $ 348 $ 228 $ 476 $ 155 $ 131 $ 106 Ratios to Average Net Assets#: Expenses ............................... 0.45% 0.45% 0.45% 0.46% 0.51% 0.52% Net Investment Income .................. 5.83% 5.28% 4.42% 5.06% 4.88% 4.85% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.50% 0.51% 0.50% 0.50% 0.53% 0.63% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.78% 5.22% 4.37% 5.02% 4.86% 4.74% ====================================================================================================
# Short periods have been annualized. * Commencement of offering of class of shares. ^ Formerly Chase Vista Treasury Plus Money Market Fund. See notes to financial statements. 90 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Treasury Plus Money Market Fund^ - ---------------------------------------------------- Institutional Shares - ---------------------------------------------------- 9/1/00 Year Ended August 31, Through - ---------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- - ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ........................................ $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ------ ----- ----- - ----- ----- ----- Income from Investment Operations: Net Investment Income .................................................... 0.03 0.06 0.05 0.05 0.05 0.05 Less Dividends from Net Investment Income ................................ 0.03 0.06 0.05 0.05 0.05 0.05 ------ ----- ----- - ----- ----- ----- Net Asset Value, End of Period .............................................. $ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ====== ===== ===== ===== ===== ===== Total Return ................................................................ 3.04% 5.65% 4.75% 5.44% 5.24% 5.29% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $1,075 $ 904 $ 980 $ 876 $ 292 $ 189 Ratios to Average Net Assets#: Expenses ................................................................. 0.25% 0.25% 0.24% 0.21% 0.26% 0.30% Net Investment Income .................................................... 6.02% 5.48% 4.61% 5.29% 5.16% 5.11% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.35% 0.36% 0.31% 0.25% 0.26% 0.38% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 5.92% 5.37% 4.54% 5.25% 5.16% 5.03% ====================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Treasury Plus Money Market Fund. See notes to financial statements. 91 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Federal Money Market Fund II^ ---------------------------------------------------- Vista Shares ---------------------------------------------------- 9/1/00 Year Ended August 31, Through ---------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- Income from Investment Operations: Net Investment Income .................. 0.03 0.05 0.04 0.05 0.05 0.05 Less Dividends from Net Investment Income .................... 0.03 0.05 0.04 0.05 0.05 0.05 ----- ----- ----- ----- ----- ----- Net Asset Value, End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return .............................. 2.83% 5.29% 4.46% 4.94% 4.91% 4.83% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $ 673 $ 576 $ 550 $ 359 $ 301 $ 353 Ratios to Average Net Assets#: Expenses ............................... 0.70% 0.70% 0.70% 0.70% 0.70% 0.70% Net Investment Income .................. 5.62% 5.17% 4.35% 4.88% 4.79% 4.79% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.72% 0.75% 0.78% 0.84% 0.82% 0.93% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.60% 5.12% 4.27% 4.74% 4.67% 4.56% =================================================================================================== Federal Money Market Fund II^ --------------------------------------------------- Premier Shares --------------------------------------------------- 9/1/00 Year Ended August 31, Through ---------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- ---- ---- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- Income from Investment Operations: Net Investment Income .................. 0.03 0.05 0.05 0.05 0.05 0.05 Less Dividends from Net Investment Income .................... 0.03 0.05 0.05 0.05 0.05 0.05 ----- ----- ----- ----- ----- ----- Net Asset Value, End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return .............................. 2.94% 5.50% 4.67% 5.22% 5.12% 5.14% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $ 312 $ 279 $ 298 $ 313 $ 400 $ 249 Ratios to Average Net Assets#: Expenses ............................... 0.48% 0.50% 0.50% 0.50% 0.50% 0.50% Net Investment Income .................. 5.84% 5.35% 4.56% 5.07% 5.01% 4.99% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.48% 0.50% 0.50% 0.51% 0.52% 0.52% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.84% 5.35% 4.56% 5.06% 4.99% 4.97% ===================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Federal Money Market Fund. See notes to financial statements. 92 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Federal Money Market Fund II^ - --------------------------------------------------------------------------- Institutional Shares Reserve Shares --------------------------------------------------- - ------------------- 9/1/00 Year Ended August 31, 9/1/00 7/31/00* Through ----------------------------------------- Through Through 2/28/01 2000 1999 1998 1997 1996 2/28/01 8/31/00 ------- ---- ---- ---- ---- ---- - ------- ------- Per Share Operating Performance Net Asset Value, Beginning of Period ...... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $ 1.00 $1.00 ----- ----- ----- ----- ----- ----- - --------- ----- Income from Investment Operations: Net Investment Income .................. 0.03 0.06 0.05 0.05 0.05 0.05 0.03 0.01 Less Dividends from Net Investment Income .................... 0.03 0.06 0.05 0.05 0.05 0.05 0.03 0.01 ----- ----- ----- ----- ----- ----- - --------- ----- Net Asset Value, End of Period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $ 1.00 $1.00 ===== ===== ===== ===== ===== ===== ========= ===== Total Return .............................. 3.05% 5.75% 4.92% 5.46% 5.35% 5.35% 2.78% 0.49% Ratios/Supplemental Data: Net Assets, End of Period (millions) ... $ 907 $ 287 $ 248 $ 198 $ 131 $ 141 $ + $ + Ratios to Average Net Assets#: Expenses ............................... 0.26% 0.26% 0.26% 0.27% 0.27% 0.30% 0.83% 0.79% Net Investment Income .................. 6.05% 5.61% 4.79% 5.32% 5.23% 5.20% 5.47% 5.08% Expenses Without Waivers, Reimbursements and Earnings Credits ................. 0.33% 0.34% 0.34% 0.27% 0.27% 0.30% 1873.84% 1.44% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .. 5.98% 5.53% 4.71% 5.32% 5.23% 5.20% (1867.54%) 4.43% ===========================================================================================================================
* Commencement of offering of class of shares. # Short periods have been annualized. + Amount rounds to less than one million. ^ Formerly Chase Vista Federal Money Market Fund. See notes to financial statements. 93 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Prime Money Market Fund II^ - ---------------------------------------------------------- Premier Shares - ---------------------------------------------------------- 9/1/00 Year Ended August 31, Through - --------------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- - ---- ----- Per Share Operating Performance Net Asset Value, Beginning of Period .......................... $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 ------ ------ ------ ----- - ----- ----- Income from Investment Operations: Net Investment Income ....................................... 0.03 0.06 0.05 0.05 0.05 0.05 Less Dividends from Net Investment Income ................. 0.03 0.06 0.05 0.05 0.05 0.05 ------ ------ ------ ----- - ----- ----- Net Asset Value, End of Period ................................ $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 ====== ====== ====== ===== ===== ===== Total Return .................................................. 3.06% 5.81% 4.90% 5.44% 5.34% 5.32% Ratios/Supplemental Data: Net Assets, End of Period (millions) ........................ $2,059 $1,841 $1,094 $ 590 $ 499 $ 419 Ratios to Average Net Assets:# Expenses .................................................... 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% Net Investment Income ....................................... 6.04% 5.67% 4.77% 5.29% 5.17% 5.18% Expenses Without Waivers, Reimbursements and Earnings Credits 0.48% 0.49% 0.49% 0.51% 0.53% 0.51% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .......................................... 6.01% 5.63% 4.73% 5.23% 5.09% 5.12% ============================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Prime Money Market Fund. See notes to financial statements. 94 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Prime Money Market Fund II^ - -------------------------------------------------------------- Institutional Shares - -------------------------------------------------------------- 9/1/00 Year Ended August 31, Through - ------------------------------------------------ 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- ---- - ---- ----- Per Share Operating Performance Net Asset Value, Beginning of Period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 ------- ------ ------ ------ - ------ ----- Income from Investment Operations: Net Investment Income ....................................... 0.03 0.06 0.05 0.06 0.05 0.05 Less Dividends from Net Investment Income ................. 0.03 0.06 0.05 0.06 0.05 0.05 ------- ------ ------ ------ - ------ ----- Net Asset Value, End of Period ................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 ======= ====== ====== ====== ====== ===== Total Return ................................................... 3.15% 6.01% 5.10% 5.65% 5.49% 5.51% Ratios/Supplemental Data: Net Assets, End of Period (millions) ........................ $17,338 $9,430 $8,161 $4,722 $1,348 $ 725 Ratios to Average Net Assets:# Expenses .................................................... 0.26% 0.26% 0.26% 0.24% 0.25% 0.26% Net Investment Income ....................................... 6.23% 5.86% 4.96% 5.50% 5.37% 5.33% Expenses Without Waivers, Reimbursements and Earnings Credits 0.33% 0.33% 0.33% 0.24% 0.25% 0.26% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .......................................... 6.16% 5.79% 4.89% 5.50% 5.37% 5.33% ==================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Prime Money Market Fund. See notes to financial statements. 95 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Prime Money Market Fund II^ - --------------------------------------------------- B Shares - --------------------------------------------------- 9/1/00 Year Ended August 31, Through - ----------------------------------------- 2/28/01 2000 1999 1998 1997 1996 ------- ----- ----- ----- ----- - ----- Per Share Operating Performance Net Asset Value, Beginning of Period .......................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- - ----- Income from Investment Operations: Net Investment Income ....................................... 0.03 0.05 0.04 0.05 0.04 0.04 Less Dividends from Net Investment Income ................. 0.03 0.05 0.04 0.05 0.04 0.04 ----- ----- ----- ----- ----- - ----- Net Asset Value, End of Period ................................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return .................................................. 2.66% 4.97% 4.07% 4.60% 4.33% 4.25% Ratios/Supplemental Data: Net Assets, End of Period (millions) ........................ $ 12 $ 11 $ 36 $ 29 $ 10 $ 16 Ratios to Average Net Assets:# Expenses .................................................... 1.24% 1.25% 1.25% 1.25% 1.35% 1.47% Net Investment Income ....................................... 5.25% 4.87% 4.00% 4.49% 4.27% 4.17% Expenses Without Waivers, Reimbursements and Earnings Credits 1.25% 1.27% 1.47% 1.50% 1.53% 1.71% Net Investment Income Without Waivers, Reimbursements and Earnings Credits .......................................... 5.24% 4.85% 3.78% 4.24% 4.09% 3.93% ======================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Prime Money Market Fund. See notes to financial statements. 96 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Prime Money Market Fund II^ - ------------------------------------------------------------------------------------- C Shares Vista Shares Reserve Shares ------------------------------------ - -------------------------- ----------------- Year 9/1/00 Year Ended 5/14/98* 9/1/00 Ended 10/1/98* 9/1/00 7/31/00* Through ----------------- Through Through ------- Through Through Through 2/28/01 8/31/00 8/31/99 8/31/98 2/28/01 8/31/00 8/31/99 2/28/01 8/31/00 ------- ------- ------- ------- ------- ------- - ------- ------- ------- Per Share Operating Performance Net Asset Value, Beginning of Period ......... $1.00 $1.00 $1.00 $1.00 $ 1.00 $ 1.00 $1.00 $ 1.00 $1.00 ----- ----- ----- ----- ------- ------ ----- - -------- ----- Income from Investment Operations: Net Investment Income ..................... 0.03 0.05 0.04 0.01 0.03 0.06 0.04 0.03 0.01 Less Dividends from Net Investment Income 0.03 0.05 0.04 0.01 0.03 0.06 0.04 0.03 0.01 ----- ----- ----- ----- ------- ------ ----- - -------- ----- Net Asset Value, End of Period ............... $1.00 $1.00 $1.00 $1.00 $ 1.00 $ 1.00 $1.00 $ 1.00 $1.00 ===== ===== ===== ===== ======= ====== ===== ======== ===== Total Return ................................. 2.68% 4.95% 3.85% 1.29% 2.99% 5.65% 4.26% 2.88% 0.50% Ratios/Supplemental Data: Net Assets, End of Period (millions) ...... $ + $ + $ + $ + $10,209 $1,475 $ 515 $ + $ + Ratios to Average Net Assets:# Expenses .................................. 1.24% 1.26% 1.45% 1.50% 0.59% 0.59% 0.59% 0.80% 0.79% Net Investment Income ..................... 5.25% 4.86% 3.75% 4.21% 5.90% 5.53% 4.61% 5.69% 5.33% Expenses Without Waivers, Reimbursements and Earnings Credits .................... 1.25% 1.26% 1.45% 1.50% 0.60% 0.61% 0.72% 700.65% 1.45% Net Investment Income Without Waivers, Reimbursements and Earnings Credits ..... 5.24% 4.86% 3.75% 4.21% 5.89% 5.51% 4.48% (694.16%) 4.67% ====================================================================================================================================
# Short periods have been annualized. * Commencement of offering of classes of shares. + Amount rounds to less than one million. ^ Formerly Chase Vista Prime Money Market Fund. See notes to financial statements. 97 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Tax Free Money Market Fund^ - ---------------------------------------------------------------------------------- Vista Shares Reserve Shares -------------------------------------------------------- - -------------------- 9/1/00 Year Ended August 31, 9/1/00 7/31/00* Through -------------------------------------------- Through Through 2/28/01 2000 1999 1998 1997 1996 2/28/01 8/31/00 ------- ---- ---- ---- ---- ---- - ------- -------- Per Share Operating Performance Net Asset Value, Beginning of Period ......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- - ----- ----- Income from Investment Operations: Net Investment Income ...................... 0.02 0.03 0.03 0.03 0.03 0.03 0.02 -- Less Dividends from Net Investment Income 0.02 0.03 0.03 0.03 0.03 0.03 0.02 -- ----- ----- ----- ----- ----- ----- - ----- ----- Net Asset Value, End of Period ............... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== ===== ===== Total Return ................................. 1.78% 3.37% 2.73% 3.10% 3.12% 2.92% 1.68% 0.30% Ratios/Supplemental Data: Net Assets, End of Period (millions) ....... $ 973 $ 895 $ 754 $ 733 $ 566 $ 574 $ + $ + Ratios to Average Net Assets:# Expenses ................................... 0.59% 0.59% 0.59% 0.59% 0.59% 0.69% 0.83% 0.79% Net Investment Income ...................... 3.56% 3.33% 2.68% 3.05% 3.08% 2.89% 3.33% 3.13% Expenses Without Waivers, Reimbursements and Earnings Credits ......................... 0.70% 0.75% 0.73% 0.72% 0.73% 0.80% 1883.58% 1.44% Net Investment Income Without Waivers, Reimbursements and Earnings Credits ...... 3.45% 3.17% 2.54% 2.92% 2.94% 2.78% (1879.42%) 2.48% ===================================================================================================================================
* Commencement of offering of class of shares. # Short periods have been annualized. + Amount rounds to less than one million. ^ Formerly Chase Vista Tax Free Money Market Fund. See notes to financial statements. 98 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Tax Free Money Market Fund^ - --------------------------------------------------- Premier Shares - --------------------------------------------------- 9/1/00 Year Ended August 31, Through - ------------------------------------------ 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- - ---- ---- ------ Per Share Operating Performance Net Asset Value, Beginning of Period ........................................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- - ----- ----- ----- Income from Investment Operations: Net Investment Income .................................................... 0.02 0.03 0.03 0.03 0.03 0.03 Less Dividends from Net Investment Income ............................. 0.02 0.03 0.03 0.03 0.03 0.03 ----- ----- ----- - ----- ----- ----- Net Asset Value, End of Period .............................................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return ................................................................ 1.82% 3.41% 2.78% 3.17% 3.19% 3.12% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $ 99 $ 120 $ 130 $ 133 $ 105 $ 145 Ratio to Average Net Assets:# Expenses ................................................................. 0.51% 0.55% 0.54% 0.53% 0.53% 0.58% Net Investment Income .................................................... 3.66% 3.40% 2.74% 3.10% 3.13% 3.08% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.51% 0.59% 0.56% 0.53% 0.53% 0.73% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 3.66% 3.26% 2.72% 3.10% 3.13% 2.93% ==================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Tax Free Money Market Fund. See notes to financial statements. 99 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
Tax Free Money Market Fund^ - ---------------------------------------------------- Institutional Shares - ---------------------------------------------------- 9/1/00 Year Ended August 31, Through - ------------------------------------------ 2/28/01 2000 1999 1998 1997 1996 ------- ----- ----- ----- ----- ------ Per Share Operating Performance Net Asset Value, Beginning of Period ....................................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- - ----- ----- ----- Income from Investment Operations: Net Investment Income .................................................... 0.02 0.04 0.03 0.03 0.04 0.03 Less Dividends from Net Investment Income ............................. 0.02 0.04 0.03 0.03 0.04 0.03 ----- ----- ----- - ----- ----- ----- Net Asset Value, End of Period ............................................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return ............................................................... 1.95% 3.71% 3.07% 3.45% 3.45% 3.40% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $ 704 $ 640 $ 476 $ 410 $ 286 $ 149 Ratio to Average Net Assets:# Expenses ................................................................. 0.26% 0.26% 0.26% 0.26% 0.26% 0.31% Net Investment Income .................................................... 3.88% 3.67% 3.01% 3.37% 3.41% 3.33% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.35% 0.39% 0.35% 0.26% 0.26% 0.31% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 3.79% 3.54% 2.92% 3.37% 3.41% 3.33% ==================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista Tax Free Money Market Fund. See notes to financial statements. 100 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
New York Tax Free Money Market Fund^ - --------------------------------------------------------------------------------- Vista Shares Reserve Shares --------------------------------------------------------- - --------------------- 9/1/00 Year Ended August 31, 9/1/00 7/31/00* Through ---------------------------------------------- Through Through 2/28/01 2000 1999 1998 1997 1996 2/28/01 8/31/00 ------- ------ ------ ------ ----- ----- - ---------- -------- Per Share Operating Performance Net Asset Value, Beginning of Period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ----- ----- - ----- ----- Income from Investment Operations: Net Investment Income ..................... 0.02 0.03 0.03 0.03 0.03 0.03 0.02 -- Less Dividends from Net Investment Income 0.02 0.03 0.03 0.03 0.03 0.03 0.02 -- ------ ------ ------ ------ ----- ----- - ----- ----- Net Asset Value, End of Period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ===== ===== ===== ===== Total Return ................................. 1.72% 3.27% 2.66% 3.03% 3.02% 2.85% 1.62% 0.28% Ratios/Supplemental Data: Net Assets, End of Period (millions) ...... $2,221 $1,831 $1,505 $1,372 $ 957 $ 890 $ + $ + Ratio to Average Net Assets:# Expenses .................................. 0.59% 0.59% 0.59% 0.59% 0.59% 0.74% 0.79% 0.79% Net Investment Income ..................... 3.42% 3.24% 2.61% 2.97% 2.97% 2.79% 3.20% 3.04% Expenses Without Waivers, Reimbursements and Earnings Credits .................... 0.70% 0.70% 0.71% 0.72% 0.73% 0.83% 1884.09% 1.49% Net Investment Income Without Waivers, Reimbursements and Earnings Credits ..... 3.31% 3.13% 2.49% 2.84% 2.83% 2.70% (1880.10%) 2.34% ===================================================================================================================================
* Commencement of offering of class of shares. # Short periods have been annualized. + Amount rounds to less than one million. ^ Formerly Chase Vista New York Tax Free Money Market Fund. See notes to financial statements. 101 JPMorgan Funds - -------------------------------------------------------------------------------- Financial Highlights (unaudited) (continued) FINANCIAL HIGHLIGHTS (unaudited)
California Tax Free Money Market Fund^ - ---------------------------------------------------- Vista Shares - ---------------------------------------------------- 9/1/00 Year Ended August 31, Through - ------------------------------------------ 2/28/01 2000 1999 1998 1997 1996 ------- ---- ---- - ---- ---- ----- Per Share Operating Performance Net Asset Value, Beginning of Period ..................................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- - ----- ----- ----- Income from Investment Operations: Net Investment Income .................................................... 0.01 0.03 0.03 0.03 0.03 0.03 Less Dividends from Net Investment Income ............................ 0.01 0.03 0.03 0.03 0.03 0.03 ----- ----- ----- - ----- ----- ----- Net Asset Value, End of Period .............................................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== Total Return ................................................................ 1.49% 3.00% 2.66% 2.97% 3.02% 3.06% Ratios/Supplemental Data: Net Assets, End of Period (millions) ..................................... $ 89 $ 78 $ 68 $ 50 $ 46 $ 43 Ratio of Average Net Assets:# Expenses ................................................................. 0.55% 0.55% 0.55% 0.55% 0.56% 0.56% Net Investment Income .................................................... 2.97% 3.03% 2.55% 2.89% 2.99% 3.03% Expenses Without Waivers, Reimbursements and Earnings Credits ............ 0.81% 0.90% 0.94% 0.93% 0.86% 1.02% Net Investment Income Without Waivers, Reimbursements and Earnings Credits 2.71% 2.68% 2.16% 2.51% 2.69% 2.57% ===================================================================================================================================
# Short periods have been annualized. ^ Formerly Chase Vista California Tax Free Money Markey Fund. See notes to financial statements. 102 - -------------------------------------------------------------------------------- JPMorgan Funds Funds Special Meeting of Shareholders (unaudited) A Special Meeting of Shareholders was held on October 5, 2000 at 1211 Avenue of the Americas, New York, New York for purposes of approving an Agreement and Plan of Reorganization (the "Reorganization Plan") between Chase Vista Prime Money Market Fund (the "acquiring fund") and Chase Vista Cash Management Fund (the "acquired fund"), each a series of Mutual Fund Trust. Under the Reorganization Plan, the acquired fund would transfer all of its asset and liabilities to the acquiring fund in a tax-free reorganization. In exchange, shareholders of the acquired fund would receive shares of the acquiring fund with a value equal to their respective holdings in the acquired fund. A majority of shareholders of Chase Vista Cash Management Fund approved the Reorganization Plan by the following vote: For 5,404,982,866 Against 98,099,682 Abstain 228,283,848 A Special Meeting of Shareholders was held on January 26, 2001 at One Chase Square, Rochester, New York 14643 for purposes of approving an Agreement and Plan of Reorganization (the "Reorganization Plan") between Chase Vista Prime Money Market Fund (the "acquiring fund"), a series of Mutual Fund Trust, and Chase Money Market Fund (the "acquired fund"), a series of Mutual Fund Investment Trust. Under the Reorganization Plan, the acquired fund would transfer all of its asset and liabilities to the acquiring fund in a tax-free reorganization. In exchange, shareholders of the acquired fund would receive shares of the acquiring fund with a value equal to their respective holdings in the acquired fund. A majority of shareholders of Chase Money Market Fund approved the Reorganization Plan by the following vote: For 152,977,629 Against 911,172 Abstain 5,944,315 103 [This page intentionally left blank] ---------------------------------------------- JPMorgan Money Market Funds Semi-Annual Report INVESTMENT ADVISER JPMorgan Fleming Asset Management ADMINISTRATOR, SHAREHOLDER AND FUND SERVICING AGENT AND CUSTODIAN The Chase Manhattan Bank DISTRIBUTOR J.P. Morgan Fund Distributors, Inc. TRANSFER AGENT DST Systems, Inc. LEGAL COUNSEL Simpson Thacher & Bartlett INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP JPMorgan Funds are distributed by J.P. Morgan Fund Distributors, Inc., which is unaffiliated with The Chase Manhattan Bank. Chase and its respective affiliates receive compensation from JPMorgan Funds for providing services to the Funds. This report is submitted for the general information of the shareholders of the funds. It is not authorized for distributions to prospective investors in the funds unless preceded or accompanied by a prospectus. The financial information in this report has been taken from the books and records of the funds without examination by independent accountants, who express no opinion thereto. To obtain a prospectus for any of the JPMorgan Funds, call 1-800-348-4782. The prospectus contains more complete information, including charges and expenses. Please read it carefully before you invest or send money. JPMorgan Funds Fulfillment Center 393 Manley Street West Bridgewater, MA 02379-1039 (C) JPMorgan Chase & Co., 2001 All Rights Reserved. April 2001 ANMM-2-401 -----END PRIVACY-ENHANCED MESSAGE-----