Summary Prospectus July
1, 2024
| JPMorgan Active Bond ETF Ticker: JBND |
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 to deliver total return from a portfolio of investment grade intermediate- and long-term
bonds.
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
|
0.25% |
| Total Annual Fund Operating Expenses |
0.25 |
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 $10,000 in the Fund for the time periods indicated. The Example also assumes that your investment has a 5% return each year and that the
Fund’s operating expenses remain the same. Your actual costs may be higher or lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST
WOULD BE: | ||
| |
1 Year |
3 Years |
| SHARES ($) |
26 |
80 |
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 period (October 11, 2023
through February 29, 2024), the Fund’s portfolio turnover rate was 78% of the average value of its portfolio.
What are the Fund’s main investment strategies?
The Fund seeks to outperform (based on the Fund’s total return, gross of fees) the Bloomberg U.S. Aggregate Index (the Benchmark) over a market cycle, typically a 3-5 year
time horizon.
As a matter of non-fundamental policy, 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 any borrowings for investment purposes. As part of its main investment strategy, the Fund will invest primarily in investment grade corporate bonds, U.S. Treasury obligations, including treasury coupon strips and treasury
principal strips, other U.S. government and agency securities, and asset-backed and
mortgage-backed securities. Generally, the Fund’s bond holdings will have intermediate to long maturities. The Fund’s average weighted maturity will normally range between 4 and 12 years. Average weighted maturity
is the average of all the current maturities (that is, the term of the securities) of the
individual bonds in the Fund calculated so as to count most heavily those securities with the
highest dollar value. Average weighted maturity is important to investors as an indication of the
Fund’s sensitivity to changes in interest rates. The Fund may have a longer or shorter average weighted maturity under certain market conditions and the Fund may shorten or lengthen its average weighted maturity if deemed
appropriate for temporary defensive purposes. The dollar weighted average quality of the
securities in the Fund generally will be A- or higher (or the equivalent). In addition, all securities will be U.S. dollar-denominated. The weighted average effective duration of the Fund will typically remain within +/-20% of
the Benchmark. Duration is a measure of price sensitivity of a debt security or a portfolio of
debt securities to relative changes in interest rates. For instance, a duration of “five years” means that a security’s or portfolio’s price would be expected to decrease by approximately 5% with a 1% increase in interest
rates (assuming
1
a parallel shift in yield curve). The Fund
may also invest in private placements, restricted securities and other unregistered securities.
Securities issued under Rule 144A or other private placements are eligible investments. The Fund may invest in sub-prime mortgage-related securities.
All securities will be rated investment grade (or the unrated equivalent) at the time of purchase. While the
Fund may not purchase below investment grade securities, it may hold up to 5% in below investment
grade securities. 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 adviser may invest a significant portion or
all of its assets in mortgage-related and mortgage-backed securities in the adviser’s
discretion. As part of its principal investment strategy, the Fund may invest in debt securities
structured as private placements, restricted securities and other unregistered
securities.
In addition to direct investments in securities,
derivatives, which are instruments that have value based on another instrument, exchange rate or
index, may be used as substitutes for securities in which the Fund can invest. The Fund has flexibility to invest in derivatives to manage duration, sector and yield curve exposure, credit and spread volatility and to
respond to volatile market conditions. The Fund may use futures contracts, options, and
swaps.
The Fund’s Assets may be invested in foreign
securities, which will be denominated in USD. Foreign securities include securities issued by
foreign governments or their agencies and instrumentalities and companies that are incorporated outside the United States.
Under normal market conditions, the Fund will limit issuer concentrations to 5% of the Fund’s Assets per
issuer at the time of purchase. This limit does not apply to investments in obligations issued or
guaranteed by the U.S. government or its agencies and instrumentalities.
Securitized sectors (agency mortgage-backed securities (MBS), asset-backed
securities (ABS), commercial mortgage-backed securities (CMBS), and non-agency residential mortgage-backed securities (RMBS)) will be a minimum of the sector’s representation within the Benchmark plus 20%.
Credit sector exposure will be limited to the sector’s representation within the Benchmark
minus 10%.
For liquidity, as a result of cash flows due to contributions and withdrawals, and for temporary defensive
purposes in order to respond to unusual market conditions, the Fund may invest all or any portion
of its assets in cash and cash equivalents.
As part of its principal investment strategy and for temporary defensive
purposes, any portion of the Fund’s total assets may be invested in cash and cash equivalents, including affiliated money market funds.
Investment Process: The Portfolio Management (PM) team 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
PM team looks for individual fixed income investments that it believes will perform well over market cycles. The team 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 investment process, the adviser seeks to
assess the impact of environmental, social and governance (ESG) factors on many 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 or countries 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
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 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 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 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
2
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. 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.
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 the
Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association
(Fannie Mae), or the Federal Home Loan Mortgage Corporation (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.
Foreign Securities and Emerging Markets Risk. Investments
in foreign issuers and foreign securities (including depositary receipts) are subject to
additional risks, including political and economic risks, unstable governments, civil conflicts and war, greater volatility, decreased market liquidity, expropriation and nationalization risks, sanctions or other
measures by the United States or other governments, currency fluctuations, higher transaction
costs, delayed settlement, possible foreign controls on investment, 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. Foreign market trading hours, clearance and settlement
procedures, and holiday schedules may limit the Fund’s ability to buy and sell securities.
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. These risks are magnified in
“emerging markets.” Emerging market countries typically have less-established market economies than developed countries and may face greater social, economic,
regulatory and political uncertainties. In addition, emerging markets typically present greater illiquidity and price volatility concerns due to smaller or limited local
capital markets and greater difficulty in determining market valuations of securities due to
limited public information on issuers. Certain emerging market countries may be subject to less stringent requirements regarding accounting, auditing, financial reporting and record keeping and therefore, material information
related to an investment may not be available or reliable. Additionally, the Fund may have
substantial difficulties exercising its legal rights or enforcing a counterparty’s legal obligations in certain jurisdictions outside of the United States, in particular in emerging markets countries, which can increase
the risks of loss.
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.
Sovereign Debt Risk. The Fund may invest in securities issued or guaranteed by foreign governmental entities (known as sovereign debt securities). These investments are subject to the risk of payment delays or defaults, due, for
example, to cash flow problems, insufficient foreign currency reserves, political considerations,
large debt positions relative to the country’s economy or failure to implement economic reforms. There is no legal or bankruptcy process for collecting sovereign debt.
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.
3
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.
Derivatives Risk. Derivatives, including foreign forward
currency contracts, options, futures contracts and swaps, may be riskier than other types of
investments and may increase the volatility of the Fund. Derivatives may be 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 expose the Fund to
counter-party 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 currency, security or other risk 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.
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.
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 New York Stock Exchange LLC (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.
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.
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.
You could lose money investing in the
Fund.
The Fund’s Past
Performance
The Fund has not operated for a full calendar year as
of the date of this prospectus and therefore, has no reportable performance history. Once the Fund has operated for at least one calendar year, a bar chart and performance table will be included in the prospectus to show the performance of the Fund. When such information is included, this
section will provide some indication of the risks of investing in the Fund by showing changes in
the Fund’s performance history from year to year and showing how the Fund’s average annual total returns compare with those of a broad measure of market performance. Although past performance of the Fund is no
4
guarantee of how it will perform in the
future, historical performance may give you some indication of the risks of investing in the
Fund. Updated performance information is available by
visiting www.jpmorganfunds.com or by calling 1-844-457-6383 (844-4JPM ETF).
Management
J.P. Morgan Investment Management Inc. (the adviser)
| Portfolio Manager |
Managed the Fund Since |
Primary Title with
Investment Adviser |
| Richard Figuly |
2023 |
Managing Director |
| Justin Rucker |
2023 |
Managing Director |
| Andrew Melchiorre |
2023 |
Managing Director |
| Edward Fitzpatrick III |
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
