Summary Prospectus July
1, 2024
| JPMorgan Limited Duration Bond ETF
Ticker: JPLD |
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 a high level of current income consistent with low volatility of principal.
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 EXPENSES
(Expenses that you pay each year as a percentage of the
value of your investment) |
|
| Management Fees
|
0.20% |
| Other Expenses
|
0.13 |
| Total Annual Fund Operating Expenses |
0.33 |
| Fee Waivers and/or Expense Reimbursements 1 |
-0.09 |
| Total Annual Fund Operating Expenses after Fee Waiv- ers and/or Expense Reimbursements 1 |
0.24 |
1
The Fund’s adviser and/or its affiliates have contractually agreed to waive fees and/or reimburse expenses
to the extent Total Annual Fund Operating Expenses (excluding acquired fund fees and expenses other than certain money market fund fees as described below, dividend and interest expenses related to short sales, interest,
taxes, expenses related to litigation and potential litigation, costs of shareholder meetings, and extraordinary expenses) exceed 0.24% of the average daily net assets of the Fund. The Fund may invest in one or more money
market funds advised by the adviser or its affiliates (affiliated money market funds). The Fund’s adviser has contractually agreed to waive fees and/or reimburse expenses in an amount sufficient to offset the fees and
expenses of the affiliated money market funds incurred by the Fund because of the Fund’s investment in such money market funds. These waivers are in effect through 7/31/26, at which time it will be determined whether such waivers will be renewed or revised. To the extent that the Fund engages in securities lending, affiliated money market fund fees and expenses resulting
from the Fund’s investment of cash received from securities lending borrowers are not included in Total Annual Fund Operating Expenses and therefore, the above waivers do not apply to such investments.
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 $10,000 in the Fund for the time periods indicated. The Example also assumes that your
investment has a 5% return each year and that the Fund’s
operating expenses are equal to the total annual fund operating expenses after fee waivers and expense reimbursements shown in the fee table through 7/31/26 and total annual
fund operating expenses thereafter. Your actual costs may be higher or
lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST
WOULD BE: | ||||
| |
1 Year |
3 Years |
5 Years |
10 Years |
| SHARES ($) |
25 |
87 |
166 |
399 |
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 6% of the average value of its portfolio.
What are the Fund’s main investment strategies?
The Fund mainly invests in mortgage-backed securities, asset-backed securities, mortgage-related securities, adjustable rate mortgages, money market instruments, and structured
investments. These investments may be structured as collateralized mortgage obligations (agency
and non-agency), stripped mortgage-backed securities, commercial mortgage-backed securities, and
mortgage pass-through securities. These securities may be structured such that payments consist of interest-only (IO), principal-only (PO) or principal and interest. Under normal circumstances, the Fund will invest at
least 80% of its Assets in bonds. For purposes of this policy, “Assets” means net
assets plus the amount of borrowings for investment purposes.
The Fund seeks to maintain a duration of three years or less, although, under certain market conditions such
as in periods of significant volatility in interest rates and spreads, the Fund’s duration
may be longer than three years. Duration is a measure of the price sensitivity of a debt security or a portfolio of debt securities to relative changes in interest rates. For instance, a duration of “three years” means
that a security’s or portfolio’s price would be expected to decrease by approximately 3% with a 1% increase in interest rates (assuming a parallel shift in yield curve).
1
The Fund invests in fixed and floating rate
debt securities representing an interest in or secured by residential mortgage loans. These
securities often are issued or guaranteed by the U.S. government, its agencies or instrumentalities such as the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae)
or the Federal Home Loan Mortgage Corporation (Freddie Mac). However, the Fund may also purchase
mortgage-backed securities and asset-backed securities that are issued by non-governmental
entities. Such securities may or may not have private insurer guarantees of timely payments.
Securities purchased by the Fund will be rated investment grade (or the unrated equivalent) at the time of
purchase. In addition, all securities will be U.S. dollar-denominated although they may be issued
by a foreign corporation, or a U.S. affiliate of a foreign corporation or a foreign government or its agencies and instrumentalities. The Fund may also invest in corporate debt securities that are issued by a U.S.
corporation. The Fund may invest a significant portion or all of its assets in mortgage-related
and mortgage-backed securities at the adviser’s discretion. The Fund may invest up to 25% of its assets in “sub-prime” mortgage-related securities at the time of purchase.
The Fund has flexibility to invest in derivatives and may use such instruments to manage duration, sector and
yield curve exposure, credit and spread volatility and to respond to volatile market conditions.
Derivatives, which are instruments which have a value based on another instrument, exchange rate or
index, may also be used as substitutes for securities in which the Fund can invest. The Fund may
use futures contracts, options, and swaps in connection with its principal strategies in order to
hedge various investments, for risk management purposes and/or to increase income or gain to the Fund.
The adviser buys and sells securities and investments for the Fund based on its view of individual securities and market sectors. Taking a long-term approach, the adviser
looks for individual fixed income investments that it believes will perform well over market
cycles. The adviser is value oriented and makes decisions to purchase and sell individual securities and instruments after performing a risk/reward analysis that includes an evaluation of interest rate risk, credit
risk, duration, liquidity, legal provisions and the structure of the transaction. As part of its
security selection process, the adviser seeks to assess the impact of environmental, social and governance (ESG) factors on certain issuers in the universe in which the Fund may invest. The adviser’s assessment
is based on an analysis of key opportunities and risks across industries to seek to identify
financially material issues with respect to the Fund’s investments in issuers and ascertain key issues that merit engagement with issuers. These assessments may not be conclusive and securities of issuers that may be
negatively impacted by such factors may be purchased and retained by the Fund while the Fund may
divest or not invest in securities of issuers that may be positively impacted by such factors.
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
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 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.
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 increase, 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 securities. Although these instruments are generally
less sensitive to interest rate changes than fixed rate instruments, the value of variable and
floating rate 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
interest 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. Prices of the Fund’s investments may be adversely
affected if any of the issuers or counterparties it is invested in are subject to an actual or perceived deterioration in their credit quality. Credit spreads may increase, which may reduce the market values of the Fund’s
securities. Credit spread risk is the risk that economic and market conditions or any actual or
perceived credit deterioration may lead to an increase in the credit spreads (i.e., the difference in yield between two securities of similar maturity but different credit quality) and a decline in price of the issuer’s
securities.
2
Government Securities
Risk. The Fund invests in securities issued or guaranteed by the U.S. government or its agencies
and instrumentalities (such as securities issued by Ginnie Mae, Fannie Mae, or Freddie Mac). U.S.
government securities are subject to market risk, interest rate risk and credit risk. Securities, such as those issued or guaranteed by Ginnie Mae or the U.S. Treasury, that are backed by the full faith and credit
of the United States, are guaranteed only as to the timely payment of interest and principal when
held to maturity and the market prices for such securities will fluctuate. Notwithstanding that
these securities are backed by the full faith and credit of the United States, circumstances
could arise that would prevent the payment of interest or principal. This would result in losses to
the Fund. Securities issued or guaranteed by U.S. government-related organizations, such as
Fannie Mae and Freddie Mac, are not backed by the full faith and credit of the U.S. government
and no assurance can be given that the U.S. government will provide financial support. Therefore,
U.S. government-related organizations may not have the funds to meet their payment obligations in
the future.
Asset-Backed, Mortgage-Related and Mortgage-Backed Securities Risk. The Fund may invest in asset-backed, mortgage-related and mortgage-backed securities including so-called “sub-prime” mortgages that are subject to
certain other risks including prepayment and call risks. When mortgages and other obligations are
prepaid and when securities are called, the Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected
capital loss and/or a decrease in the amount of dividends and yield. In periods of either rising
or declining interest rates, the Fund may be subject to extension risk, and may receive principal later than expected. As a result, in periods of rising interest rates, the Fund may exhibit additional volatility.
During periods of difficult or frozen credit markets, significant changes in interest rates or
deteriorating economic conditions, such securities may decline in value, face valuation
difficulties, become more volatile and/or become illiquid. Additionally, asset-backed, mortgage-related and mortgage-backed securities are subject to risks associated with their structure and the nature of the
assets underlying the securities and the servicing of those assets. Certain asset-backed,
mortgage-related and mortgage-backed securities may face valuation difficulties and may be less liquid than other types of asset-backed, mortgage-related and mortgage-backed securities, or debt securities.
Collateralized mortgage obligations (CMOs) and stripped mortgage-backed securities, including those structured as interest-only (IOs) and principal-only (POs), are
more volatile and may be more sensitive to the rate of prepayment than other mortgage-related
securities. The risk of default, as described under “Credit Risk,” for “sub-prime” mortgages is generally higher than other types of mortgage-backed securities. The structure of some of these securities may be
complex and there may be less available information than other types of debt
securities.
Prepayment Risk. The
issuer of certain securities may repay principal in advance, especially when yields fall. Changes in the rate at which prepayments occur can affect the return on investment of these securities. When debt obligations
are prepaid or when securities are called, the Fund may have to reinvest in
securities with a lower yield. The Fund
also may fail to recover additional amounts (i.e., premiums) paid for securities with higher
coupons, resulting in an unexpected capital loss.
Cash Transactions Risk. Unlike certain ETFs, the Fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that
the Fund might not have recognized if it were to distribute portfolio securities in-kind. As
such, investments in Shares may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in-kind.
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.
Geographic Focus Risk. The Fund may focus its investments in one or more regions or small groups of countries. As a result, the Fund’s performance may be subject to greater volatility than a more geographically diversified
fund.
Derivatives Risk. Derivatives, including futures contracts, options and swaps, may be riskier than other types of investments
and may increase the volatility of the Fund. Derivatives may be particularly sensitive to changes
in economic and market conditions and may create leverage, which could result in losses that
significantly exceed the Fund’s original investment. Certain derivatives also expose the
Fund to counterparty risk, which is the risk that the derivative counterparty will not fulfill its
contractual obligations (and includes credit risk associated with the counterparty). Certain
derivatives are synthetic instruments that attempt to replicate the performance of certain reference assets. With regard to such derivatives, the Fund does not have a claim on the reference assets and is subject
to enhanced counterparty risk. Derivatives may not perform as expected, so the Fund may not
realize the intended benefits. When used for hedging, the change in value of a derivative may not correlate as expected with the security being hedged. In addition, given their complexity, derivatives expose the Fund
to risks of mispricing or improper valuation. Derivatives also can expose the Fund to derivative
liquidity risk, which includes risks involving the liquidity demands that derivatives can create to make payments of margin, collateral, or settlement payments to counterparties, legal risk, which includes the risk of loss
resulting from insufficient or unenforceable contractual documentation, insufficient capacity or
authority of the Fund’s counterparty and operational risk, which includes documentation or settlement issues, system failures, inadequate controls and human error. Certain of the Fund’s transactions in derivatives could
also affect the amount, timing and character of distributions to shareholders which may result in
the Fund realizing more short-term capital gain and ordinary income subject to tax at ordinary income tax rates than it would if it did not engage in such transactions, which may adversely impact the Fund’s after-tax
returns.
3
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.
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 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.
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.
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 Fund commenced operations after the assets of another investment company advised by the adviser,
JPMorgan Limited Duration Bond Fund (the predecessor fund), were transferred to the Fund in a
tax-free reorganization as of the close of business on July 28, 2023. The Fund has the same
investment objective and substantially similar strategies as those of the predecessor fund.
Updated performance information is available by visiting
www.jpmorganfunds.com or by calling 1-844-457-6383 (844-4JPM ETF).
The bar chart shows how the performance of the Fund’s Shares (represented by the performance of the predecessor fund’s Class R6 Shares) has varied from year to year
for the past ten
calendar years. The table shows the Fund’s average annual total returns (represented by the average annual total returns of the predecessor fund’s Class R6 Shares) for
the past one year, five years and ten years. The table compares the Fund’s performance (represented by the performance of the predecessor fund’s Class R6 Shares) to the
performance of the Bloomberg 1-3 Year U.S. Government/Credit Bond Index (Index). Performance for
the Fund’s Shares has not been adjusted to reflect the Fund’s Shares’ lower expenses than those of the predecessor fund’s Class R6 Shares. Performance for the predecessor fund is based on the NAV per share
of the predecessor fund shares rather than on market-determined prices. Past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the
future.
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark
and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Bloomberg
does not approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be
obtained therefrom and, to the maximum extent allowed by law, shall have any liability or responsibility for injury or damages arising in connection therewith.
| YEAR-BY-YEAR RETURNS |
| Best Quarter |
2nd quarter, 2020 |
3.55% |
| Worst Quarter |
1st quarter, 2020 |
-1.92% |
| The Fund’s year-to-date total return |
through |
3/31/24 |
was |
1.43% |
. |
| AVERAGE ANNUAL TOTAL RETURNS
(For periods ended December 31, 2023) |
|||
| |
Past
1 Year |
Past
5 Years |
Past
10 Years |
| SHARES |
|
|
|
| Return Before Taxes |
6.50 % |
2.03 % |
1.91 % |
| Return After Taxes on Distributions |
4.69 |
1.05 |
1.09 |
| Return After Taxes on Distributions and Sale of Fund Shares |
3.82 |
1.13 |
1.10 |
| BLOOMBERG 1-3 YEAR U.S. GOVERNMENT/CREDIT BOND INDEX (Reflects No Deduction for Fees, Expenses, or Taxes) |
4.61 |
1.51 |
1.27 |
4
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 |
| Michael Sais |
2023 |
Managing Director |
| Robert Manning |
2023 |
Managing Director |
Mr. Sais and Mr. Manning also were the predecessor fund’s portfolio managers since 1995 and 2013,
respectively.
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
