Summary
Prospectus August 5, 2024
| JPMorgan Fundamental Data Science Mid Core
ETF Ticker: MCDS |
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 August 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 provide long-term capital appreciation.
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 |
0.35% |
| Total Annual Fund Operating Expenses |
0.35 |
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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 $10,000 in the Fund for the time periods indicated. The Example also assumes that your investment has a 5% return each year and that the
Fund’s operating expenses remain the same. Your actual costs may be higher or lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR
COST WOULD BE: | ||
| |
1 Year |
3 Years |
| SHARES ($) |
36 |
113 |
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. The Fund has not yet commenced operations as of the date of this
prospectus. Therefore, there is no portfolio turnover rate for the Fund to report at this time.
What are the Fund’s main investment strategies?
Under normal circumstances, the Fund invests at least 80% of its Assets in equity securities of mid cap companies. “Assets” means net assets, plus the amount
of borrowings for investment purposes. Mid cap companies are companies with market
capitalizations similar to those within the universe of the Russell Midcap® Index, the
Fund’s benchmark, at the time of purchase. As of June 28, 2024, the market capitalizations of the companies in the Russell Midcap® Index ranged from $167 million to $81.6 billion. The adviser chooses the
Fund’s equity securities so that the overall portfolio has similar growth and value
characteristics to its benchmark. While the Fund invests in securities that have growth and value
characteristics, the portfolio is not focused on either type of securities, and the Fund is
considered a core portfolio. The Fund may also invest in real estate investment trusts (REITs).
Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can
invest. To the extent the Fund uses derivatives, the Fund will primarily use futures contracts to
more effectively gain targeted equity exposure from its cash positions.
The Fund will not invest more than 25% of the value of its total assets in
the securities of companies conducting their principal business activities in the same industry, except that, to the extent that an industry represents 20% or more of the Fund’s benchmark at the time of investment, the
Fund may invest up to 35% of its total assets in that industry.
Many of the equity securities in the Fund's portfolio are securities of
companies in the financials, industrials and consumer discretionary sectors.
Investment Process: In managing the Fund, the adviser employs a fundamental
data science enabled investment approach that combines research, data insights, and risk management. The
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adviser defines data science as the
discipline of extracting useful insights from collections of information, and the adviser
utilizes the insights as a part of its investment process. The adviser utilizes proprietary
techniques to process, analyze, and combine a wide variety of information, including the adviser’s multi-decade history of proprietary fundamental research, company financial statements, and a variety of other
data sources that the adviser finds relevant to conducting fundamental analysis. The adviser
combines insights derived from these sources to forecast the financial prospects of each
security, also known as fundamental analysis. Alongside its own insights, the Fund’s
portfolio management team uses the forecasts developed through data science techniques to help to
identify securities that are priced favorably relative to their associated levels of risk. The
Fund’s portfolio management team then constructs a portfolio that seeks to maximize expected
future financial performance while controlling for key risks to the underlying companies’
businesses identified by the adviser’s analysis. The adviser assesses key risks by analyzing potential events or conditions that may have a negative impact on the adviser’s valuation of a particular
security. Such key risks may include, but are not limited to, sensitivity to changes in
macroeconomic conditions, competitive risks from existing companies or new entrants, and
operational risks related to the companies’ business models. The adviser continuously evaluates the efficacy of the sources of information included within the investment process, and seeks to identify new
data sources that will be additive to the adviser’s forecasts and portfolio construction.
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 securities 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 adviser may sell a security for several reasons. A security may be sold due to a change in the company’s fundamentals or if the adviser believes the security is no
longer attractively valued relative to its associated levels of risk. Investments may also be
sold if the adviser identifies a stock that it believes offers a better investment opportunity.
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.
Equity Market Risk. The price of equity securities may
rise or fall because of changes in the broad market or changes in a company’s financial
condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries selected for the Fund’s portfolio or the securities market
as a whole, such as changes in economic or political conditions. When the value of the
Fund’s portfolio securities goes down, your investment in the Fund decreases in value.
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.
Data Science Investment Approach
Risk. The Fund relies on a proprietary data science enabled selection approach that utilizes proprietary techniques to process, analyze, and combine a wide variety of information, including the
adviser’s multi-decade history of proprietary fundamental research, company financial
statements, and other relevant data sources, to forecast the financial prospects of each security and to assess key risks. There is no guarantee that the use of the Fund’s proprietary data science approach will
result in effective investment decisions for the Fund, specifically to the extent the approach
does not perform as designed or as intended, the Fund’s strategy may not be successfully implemented and the Fund may lose value.
Mid Cap Company Risk. Investments in mid cap companies may be riskier, less liquid, more volatile and more vulnerable to economic, market and industry changes than
investments in 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 other equity
securities, especially over the short term.
Derivatives Risk. Derivatives, including futures, 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. The Fund may be more volatile than if the Fund had not been leveraged because the leverage tends to exaggerate any effect on the value of the
Fund’s portfolio securities. Certain derivatives expose the Fund to counterparty
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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 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.
Industry Concentration Risk. The Fund will not invest more than 25% of the value of its total assets in the securities of companies conducting their principal business
activities in the same industry, except that, to the extent that an industry represents 20% or
more of the Fund’s benchmark at the time of investment, the Fund may invest up to 35% of its assets in that industry. Concentrating Fund investments in companies conducting business in the same industry will subject
the Fund to a greater risk of loss as a result of adverse economic, business or other
developments affecting that industry than if its investments were not so concentrated.
ETF Shares Trading Risk. Shares are listed for trading on
The NASDAQ Stock Market 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.
Real Estate Securities
Risk. The Fund’s investments in real estate securities, including REITs, are subject to the
same risks as direct investments in real estate and mortgages, and their value will depend on the
value of the underlying real estate interests. These risks include default, prepayments, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and
creditworthiness of REIT issuers. The Fund will indirectly bear its proportionate share of
expenses, including management fees, paid by each REIT in which it invests in addition to the expenses of the Fund.
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.
Industrials Sector Risk. The industrials sector may be
adversely affected by changes in the supply of and demand for products and services, product
obsolescence, claims for environmental damage or product liability and general economic conditions,
among other factors.
Consumer Discretionary Sector Risk. The Fund will be sensitive to, and its performance may depend to a greater extent on, the overall condition of the consumer discretionary
sector. Companies engaged in the consumer discretionary sector may be affected by changes in
domestic and international economies, exchange rates, interest rates, competition,
consumers’ disposable income and consumer preferences, social trends and marketing
campaigns.
Financials Sector Risk. Financial services companies are subject to extensive governmental regulation which may limit both the
amounts and types of loans and other financial commitments they can make, the interest rates and
fees they can charge, the scope of their activities, the prices they can charge and the amount of
capital they must maintain. Profitability is largely dependent on the availability and cost of capital funds and can fluctuate significantly when interest rates change or due to increased competition. In addition, deterioration
of the credit markets generally may cause an adverse impact in a broad range of markets,
including U.S. and international credit and interbank money markets generally, thereby affecting a wide range of financial institutions and markets. Certain events in the financials sector may cause an unusually
high degree of volatility in the financial markets, both domestic and foreign, and cause certain
financial services companies to incur large losses. Securities of financial services companies may experience a dramatic decline in value when such companies experience substantial declines in the valuations of their
assets, take action to raise capital (such as the issuance of debt or equity securities), or
cease operations. Credit losses resulting from financial difficulties of borrowers and financial losses associated with investment activities can negatively impact the sector. Insurance companies may be subject to severe price
competition. Adverse economic, business or political developments could adversely affect
financial institutions engaged in mortgage finance or other lending or investing activities directly or indirectly connected to the value of real estate.
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. The Fund has a limited number of institutions that may act as authorized participants on an agency basis (i.e., on behalf of other
market participants). To the extent that these intermediaries exit the business or are unable to
or choose not to proceed with creation and/or
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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. Authorized participant concentration risk may be heightened for ETFs that invest in securities issued by non-U.S. issuers.
You could lose money investing in the
Fund.
The Fund’s Past
Performance
The Fund has not commenced operations 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 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 |
| Eric Moreau |
2024 |
Executive Director |
| Andrew Stern |
2024 |
Executive 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 (when available), 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.
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SPRO-FDSMC-ETF-824