Summary Prospectus July
1, 2024
| JPMorgan BetaBuilders USD High Yield Corporate
Bond ETF Ticker: BBHY |
Before you invest, you may want to review the Fund’s Prospectus, which contains more
information about the Fund and its risks. You can find the Fund’s Prospectus and other information about the Fund, including the Statement of
Additional Information, online at www.jpmorganfunds.com/funddocuments. You can also get this information at no cost by calling 1-844-457-6383 or by sending an e-mail request to jpm.xf@jpmorgan.com or by
asking any financial intermediary that offers shares of the Fund. The Fund’s Prospectus and Statement of Additional Information, both dated July 1,
2024, as may be supplemented from time to time are incorporated by reference into this Summary Prospectus.
What is the goal of
the Fund?
The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the ICE BofA US High Yield Total Return Index.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold and sell Shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table and example
below.
| ANNUAL FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the
value of your investment) |
|
| Management Fees
|
0.15% |
| Total Annual Fund Operating Expenses |
0.15 |
1
The Fund's management agreement provides that the adviser will pay substantially all expenses of the Fund
(including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses, dividend and interest expenses related to short sales,
taxes, acquired fund fees and expenses (other than fees for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in
the ordinary course of the Fund’s business. Additionally, the Fund shall be responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with the Fund’s securities
lending program, if applicable.
Example
This Example
is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example does not take into account brokerage commissions that you pay when purchasing or selling Shares of the
Fund. The Example assumes that you invest $10,000 in the Fund for the time periods indicated. The
Example also assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same. Your actual costs may be higher or lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST
WOULD BE: | ||||
| |
1 Year |
3 Years |
5 Years |
10 Years |
| SHARES ($) |
15 |
48 |
85 |
192 |
Portfolio
Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are held in a
taxable account. These costs, which are not reflected in annual fund operating expenses or in the
Example, affect the Fund’s performance. During the Fund’s most recent fiscal year, the
Fund’s portfolio turnover rate was 16% of the average value of its portfolio.
What are the Fund’s main investment strategies?
The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the ICE BofA US High Yield Total Return Index (the Underlying
Index), which is capitalization weighted based on an issuer’s current market value of debt
outstanding and is designed to measure the performance of U.S. dollar denominated below investment
grade (commonly referred to as “junk”) corporate debt publicly issued in the U.S.
domestic market. To be included in the Underlying Index, securities must be rated below investment
grade (based on an average of Moody’s, S&P, and Fitch ratings), have at least 18 months
to final maturity at time of issuance, at least one year remaining term to final maturity as of rebalance date, a fixed coupon schedule and a minimum amount outstanding of $250 million. Securities must have risk
exposure to countries that are members of the FX-G10, Western Europe or territories of the US and
Western Europe. Securities that are original issue zero coupon bonds, 144A securities, pay-in-kind
securities, callable perpetual securities (provided they are at least one year from the first
call date), and fixed-to-floating (provided they are callable within the fixed rate period and at
least one year from last call prior to transition date) are also eligible for inclusion in the
index. As of May 31, 2024 the effective duration of the Underlying Index was 3.32 years.
The Fund will invest at least 80% of its Assets in securities included in the Underlying Index.
“Assets” means net assets, plus the amount of borrowings for investment purposes. The
Fund will provide shareholders with at least 60 days prior notice of any change to this
policy.
The Fund may invest up to 100% of its total assets in below investment grade or unrated securities. Such securities are also known as “junk bonds,”
“high yield bonds” and “non-investment grade bonds.” Such securities may include “distressed debt.” Distressed debt includes securities of issuers experiencing financial or operating difficulties, securities
where the issuer has
1
defaulted in the payment of interest or
principal or in the performance of its covenants or agreements, securities of issuers that may be
involved in bankruptcy proceedings, reorganizations or financial restructurings of securities of issuers operating in troubled industries.
In seeking to
track the Underlying Index, the Fund may invest in corporate bonds structured as corporate debt securities, public or private placements, restricted and other unregistered securities and U.S. dollar-denominated securities of
foreign issuers.
The
Fund, using a “passive” or indexing investment approach, attempts to closely correspond to the performance of the Underlying Index. Unlike many actively-managed funds, the Fund does not seek to outperform the Underlying
Index and does not seek temporary defensive positions when markets decline or appear
overvalued.
The Fund intends to utilize a “representative sampling” strategy whereby securities are chosen in order to attempt to approximate the investment characteristics of the
constituent securities. Targeted investment characteristics of the collective portfolio include
asset class exposure, industry weightings, liquidity, and other fixed income specific attributes (such as yield, duration, credit quality, spread and maturity). Even when the Fund utilizes representative sampling, it
must still invest at least 80% of its Assets in securities included in the Underlying Index. The
Fund’s portfolio will be rebalanced monthly in accordance with the monthly rebalancing of the Underlying Index.
The Fund will not invest 25% or
more of the value of its total assets in the securities of companies conducting their principal
business activities in the same industry.
The Fund’s Main Investment Risks
The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations
regarding particular instruments or markets are not met.
The Fund is subject to the main risks noted
below, any of which may adversely affect the Fund’s net asset value (NAV), market price,
performance and ability to meet its investment objective.
General Market Risk. Economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or
conditions in one country or region will adversely impact markets or issuers in other countries
or regions. Securities in the Underlying Index or in the Fund’s portfolio may underperform in comparison to securities in general financial markets, a particular financial market or other asset classes due to a number
of factors, including inflation (or expectations for inflation), deflation (or expectations for
deflation), interest rates, global demand for particular products or resources, market instability, financial system instability, debt crises and downgrades, embargoes, tariffs, sanctions and other trade barriers,
regulatory events, other governmental trade or market control programs and related geopolitical
events. In addition, the value of the Fund’s investments may be negatively affected by the occurrence of global events such as war, terrorism, environmental disasters, natural disasters or events, country
instability, and infectious disease epidemics or pandemics.
Index Related Risk. The Fund’s return may not track the return of the Underlying Index for a number of reasons and therefore may not achieve its investment objective. For
example, the Fund incurs a number of operating expenses not applicable to the Underlying Index,
and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Underlying Index. In addition, the Fund’s return may differ
from the return of the Underlying Index as a result of, among other things, pricing differences
between the valuation of securities in the Underlying Index and in the Fund’s NAV and the inability to purchase certain securities included in the Underlying Index due to regulatory or other restrictions.
In addition, because the Fund uses a representative sampling approach, the Fund may not be as well correlated with the return of the Underlying Index as when the Fund
purchases all of the securities in the Underlying Index in the proportions in which they are
represented in the Underlying Index.
Errors in the construction or calculation of the Underlying Index
may occur from time to time. Any such errors may not be identified and corrected by the Index
Provider for some period of time, which may have an adverse impact on the Fund and its
shareholders.
The risk that
the Fund may not track the performance of the Underlying Index may be heightened during times of increased market volatility or other unusual market conditions.
Passive Management Risk. Unlike many investment companies, the Fund is not “actively” managed. Therefore, it would not generally sell a security because the
security’s issuer was in financial trouble unless that security is removed from the
Underlying Index. As a result, the Fund’s performance could be lower than funds that
actively shift their portfolio assets to take advantage of market opportunities or lessen the impact of a market decline or a decline in the value of one or more issuers. The Fund will not take defensive positions
under any market conditions, including in declining markets.
Sampling Risk. To the extent the Fund uses a representative sampling approach, it will hold a smaller number of securities than are in the Underlying Index. As a result,
an adverse development respecting an issuer of securities held by the Fund could result in a
greater decline in the Fund’s NAV than would
2
be the case if the Fund held all of the
securities in the Underlying Index. Conversely, a positive development relating to an issuer of
securities in the Underlying Index that is not held by the Fund could cause the Fund to underperform the Underlying Index. To the extent the assets in the Fund are smaller, these risks may be greater.
High Yield Securities Risk. The Fund invests in securities including junk bonds and instruments that are issued by companies that are highly leveraged, less creditworthy or financially distressed. These investments are considered to be
speculative and may be subject to greater risk of loss, greater sensitivity to economic changes,
valuation difficulties and potential illiquidity. Such investments may be subject to additional risks including subordination to other creditors, no collateral or limited rights in collateral, lack of a regular trading
market, liquidity risks, prepayment risks, and lack of publicly available information. High yield
securities that are deemed to be liquid at the time of purchase may become illiquid.
In recent years,
there has been a broad trend of weaker or less restrictive covenant protections in the high yield market. Among other things, under such weaker or less restrictive covenants, borrowers might be able to exercise more
flexibility with respect to certain activities than borrowers who are subject to stronger or more
protective covenants. For example, borrowers might be able to incur more debt, including secured debt, return more capital to shareholders, remove or reduce assets that are designated as collateral securing high yield
securities, increase the claims against assets that are permitted against collateral securing
high yield securities or otherwise manage their business in ways that could impact creditors negatively. In addition, certain privately held borrowers might be permitted to file less frequent, less detailed or less timely
financial reporting or other information, which could negatively impact the value of the high
yield securities issued by such borrowers. Each of these factors might negatively impact the high
yield instruments held by the Fund.
No active trading market may exist for some instruments and certain investments may be subject to restrictions on resale. The inability to dispose of the Fund’s
securities and other investments in a timely fashion could result in losses to the Fund. Because
some instruments may have a more limited secondary market, liquidity and valuation risk may be more pronounced for the Fund. When instruments are prepaid, the Fund may have to reinvest in instruments with a lower yield or
fail to recover additional amounts (i.e., premiums) paid for these instruments, resulting in an
unexpected capital loss and/or a decrease in the amount of dividends and yield.
Interest Rate Risk. The Fund’s investments in bonds and other debt securities will change in value based on changes in interest rates. If rates rise, the value of these
investments generally declines. Securities with greater interest rate sensitivity and longer
maturities generally are subject to greater fluctuations in value. The Fund may invest in variable and floating rate loans and other variable and floating rate securities. Although these instruments are generally less sensitive to
interest rate changes than fixed rate instruments, the value of floating rate loans and other
securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. The Fund may face a heightened level of interest rate risk due to certain changes in monetary policy. It is difficult to
predict the pace at which central banks or monetary authorities may change inter
est rates or the timing, frequency, or
magnitude of such changes. Any such changes could be sudden and could expose debt markets to
significant volatility and reduced liquidity for Fund investments.
Credit Risk. The Fund’s investments are subject to the risk that issuers and/or counterparties will fail to make payments when due or default completely. If an issuer’s
or counterparty’s financial condition worsens, the credit quality of the issuer or
counterparty may deteriorate, making it difficult for the Fund to sell such
investments.
Smaller Company Risk. Investments in securities of smaller companies (mid cap and small cap companies) may be riskier, less liquid, more volatile and more vulnerable to economic, market and industry changes than securities of
larger, more established companies. The securities of smaller companies may trade less frequently
and in smaller volumes than securities of larger companies. As a result, changes in the price of securities issued by such companies may be more sudden or erratic than the prices of securities of large capitalization
companies, especially over the short term. These risks are higher for small cap
companies.
Foreign Securities Risk. U.S. dollar denominated securities of foreign issuers or U.S. affiliates of foreign issuers may be subject to additional risks not faced by domestic issuers. These risks include political and economic risks,
civil conflicts and war, greater volatility, expropriation and nationalization risks, sanctions
or other measures by the United States or other governments, higher transaction costs, delayed settlement, possible foreign controls on investments, liquidity risks and less stringent investor protection and disclosure
standards of foreign markets. In certain markets where securities and other instruments are not
traded “delivery versus payment,” the Fund may not receive timely payment for securities or other instruments it has delivered or receive delivery of securities paid for and may be subject to increased risk that the
counterparty will fail to make payments or delivery when due or default completely. Events and
evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable becoming riskier and more
volatile.
Foreign Issuer Risk. U.S. dollar-denominated securities of foreign issuers or U.S. affiliates of foreign issuers may be subject to
additional risks not faced by domestic issuers. These risks include political and economic risks,
civil conflicts and war, greater volatility, expropriation and nationalization risks, sanctions
or other measures by the United States or other governments, and regulatory issues facing issuers in such foreign countries. Events and evolving conditions in certain economies or markets may alter the risks associated with
investments tied to countries or regions that historically were perceived as comparatively stable
becoming riskier and more volatile.
ETF Shares Trading Risk. Shares are listed for trading on the Cboe BZX Exchange, Inc. (the Exchange) and are bought and sold in the secondary market at market prices. The market prices of Shares are expected to fluctuate, in some
cases materially, in response to changes in the Fund’s NAV, the intraday value of the
Fund’s holdings and supply and demand for Shares. The adviser cannot predict whether Shares will trade above, below or at their NAV. Disruptions to creations and redemptions, the existence of significant market
volatility or
3
potential lack of an active trading market
for the Shares (including through a trading halt), as well as other factors, may result in the
Shares trading significantly above (at a premium) or below (at a discount) to NAV or to the intraday value of the Fund’s holdings. During such periods, you may incur significant losses if you sell your
Shares.
The securities held by the Fund may be traded in markets that close at a different time than the Exchange. Liquidity in those securities may be reduced after the applicable
closing times. Accordingly, during the time when the Exchange is open but after the applicable
market closing, fixing or settlement times, bid-ask spreads on the Exchange and the corresponding
premium or discount to the Shares’ NAV may widen.
Authorized Participant Concentration Risk. Only an authorized participant may engage in creation or redemption transactions directly with the Fund. The Fund has a limited
number of intermediaries that act as authorized participants and none of these authorized
participants is or will be obligated to engage in creation or redemption transactions. To the extent that these intermediaries exit the business or are unable to or choose not to proceed with creation and/or redemption
orders with respect to the Fund and no other authorized participant creates or redeems, Shares
may trade at a discount to NAV and possibly face trading halts and/or delisting.
Industry and Sector Focus Risk. At times, the Fund may increase the relative emphasis of its investments in a particular industry or sector. The prices of securities of issuers in a particular industry or sector may be more susceptible to
fluctuations due to changes in economic or business conditions, government regulations,
availability of basic resources or supplies, contagion risk within a particular industry or sector or to other industries or sectors, or other events that affect that industry or sector more than securities of issuers in other
industries and sectors. To the extent that the Fund increases the relative emphasis of its
investments in a particular industry or sector, the value of the Fund’s Shares may fluctuate in response to events affecting that industry or sector.
Privately Placed Securities Risk. Privately placed securities generally are less liquid than publicly traded securities and the Fund may not always be able to sell such securities without experiencing delays in finding buyers or reducing
the sale price for such securities. The disposition of some of the securities held by the Fund
may be restricted under federal securities laws. As a result, the Fund may not be able to dispose of such investments at a time when, or at a price at which, it desires to do so and may have to bear expenses of
registering these securities, if necessary. These securities may also be difficult to
value.
You could lose money investing in the Fund.
The Fund’s Past Performance
This section provides some indication of the risks of investing in the Fund. The bar chart shows the performance of the Fund’s Shares over the past seven calendar years. The table shows the average annual total returns for the past one
year, five years
and
life of the Fund. It compares that performance to the ICE BofA US High Yield Total Return Index.
As of February 1, 2023, the Fund changed its investment strategies. In view of these changes, the
Fund’s performance record prior to this period might be less pertinent for investors considering whether to purchase shares of the Fund. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available by visiting www.jpmorganfunds.com or by calling 1-844-457-6383 (844-4JPM ETF).
SOURCE ICE DATA
INDICES, LLC (“ICE DATA”), IS USED WITH PERMISSION. ICE® IS A REGISTERED TRADEMARK OF ICE DATA OR ITS AFFILIATES AND BOFA® IS A REGISTERED TRADEMARK OF BANK OF AMERICA CORPORATION LICENSED BY BANK OF
AMERICA CORPORATION AND ITS AFFILIATES (“BOFA”) AND MAY NOT BE USED WITHOUT
BOFA’S PRIOR WRITTEN APPROVAL. ICE DATA, ITS AFFILIATES AND THEIR RESPECTIVE THIRD PARTY
SUPPLIERS DISCLAIM ANY AND ALL WARRANTIES AND REPRESENTATIONS, EXPRESS AND/OR IMPLIED, INCLUDING
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, INCLUDING THE
INDICES, INDEX DATA AND ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM. NEITHER ICE DATA,
ITS AFFILIATES NOR THEIR RESPECTIVE THIRD PARTY SUPPLIERS SHALL BE SUBJECT TO ANY DAMAGES OR
LIABILITY WITH RESPECT TO THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDICES OR
THE INDEX DATA OR ANY COMPONENT THEREOF, AND THE INDICES AND INDEX DATA AND ALL COMPONENTS
THEREOF ARE PROVIDED ON AN “AS IS” BASIS AND YOUR USE IS AT YOUR OWN RISK. ICE DATA,
ITS AFFILIATES AND THEIR RESPECTIVE THIRD PARTY SUPPLIERS DO NOT SPONSOR, ENDORSE, OR RECOMMEND
THE ADVISER, OR ANY OF ITS PRODUCTS OR SERVICES.
| YEAR-BY-YEAR RETURNS |
| Best Quarter |
2nd quarter, 2020 |
8.55% |
| Worst Quarter |
1st quarter, 2020 |
-11.81% |
| The Fund’s year-to-date total return |
through |
3/31/24 |
was |
1.38% |
. |
4
| AVERAGE ANNUAL TOTAL RETURNS
(For periods ended December 31, 2023) |
|||
| |
Past |
Past |
Life of Fund
since |
| |
1 Year |
5 Years |
09/14/2016 |
| SHARES |
|
|
|
| Return Before Taxes |
12.53 % |
4.82 % |
4.07 % |
| Return After Taxes on Distributions |
9.50 |
2.58 |
1.88 |
| Return After Taxes on Distributions and Sale of Fund Shares |
7.30 |
2.73 |
2.15 |
| ICE BOFA US HIGH YIELD TOTAL RETURN INDEX (Reflects No Deduction for Fees, Expenses, or Taxes) |
13.54 |
5.24 |
4.70 |
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not relevant to investors who hold their Shares through
tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
Management
J.P.
Morgan Investment Management Inc. (the adviser)
| Portfolio Manager |
Managed the Fund Since |
Primary Title with
Investment Adviser |
| Edward Gibbons |
2023 |
Executive Director |
| John Lux |
2023 |
Managing Director |
Purchase and Sale of Shares
Individual Shares of the Fund may only be purchased and sold in secondary market transactions through brokers
or financial intermediaries. Shares of the Fund are listed for trading on the
Exchange, and because Shares trade at
market prices rather than NAV, Shares of the Fund may trade at a price greater than NAV (premium)
or less than NAV (discount). Certain affiliates of the Fund and the adviser may purchase and resell Shares pursuant to this prospectus.
An investor may
incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase Shares of the Fund (bid) and the lowest price a seller is willing to accept for Shares (ask) when buying or
selling Shares in the secondary market (the bid-ask spread).
Recent information, including information about the Fund’s NAV, market price, premiums and discounts,
and bid-ask spreads, is included on the Fund’s website at
jpmorganfunds.com.
Tax Information
To the
extent the Fund makes distributions, those distributions will be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan, in which case you may be
subject to federal income tax upon withdrawal from the tax-advantaged investment
plan.
Payments to Broker-Dealers and Other Financial Intermediaries
If you
purchase Shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the adviser and its related companies may pay the financial intermediary for the sale of Shares and related services. These
payments may create a conflict of interest by influencing the broker-dealer or financial
intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
5
