Form 497K J.P. Morgan Exchange-Tra
Summary Prospectus May 20, 2022
JPMorgan Realty Income ETF
Ticker: JPRE
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 [email protected] or by asking any financial intermediary that offers shares of the Fund. The Fund’s Prospectus and Statement of Additional Information, both dated December 6, 2021, 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 high total investment return through a combination of capital appreciation and current income.
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 |
0.60% |
Other
Expenses1 |
0.09 |
Total Annual Fund Operating Expenses |
0.69 |
Fee Waivers and/or Expense Reimbursements2 |
-0.19 |
Total Annual Fund Operating Expenses after Fee Waiv- ers and/or Expense Reimbursements2 |
0.50 |
1
“Other
Expenses” is based on estimated amounts for the current fiscal year.
2
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 0.50% 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 06/30/25, 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 $10,000 in the Fund
for the time periods indicated. The Example also assumes that your investment has a 5% return each year and
that the Fund’s
operating expenses are
equal to the total annual fund operating expenses after fee waivers and expense reimbursements shown in the fee
table through 6/30/25 and total annual fund operating expenses thereafter. Your actual costs may be higher or
lower.
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST
WOULD BE: | ||||
|
1 Year |
3 Years |
5 Years |
10 Years |
SHARES ($) |
51 |
160 |
312 |
789 |
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 most recent fiscal year of the predecessor fund (as defined
below), the predecessor fund’s portfolio turnover rate was 90% of the average value of its portfolio.
What are the Fund’s main investment strategies?
The Fund seeks to achieve its objective by investing substantially all of its assets, and in any event under normal circumstances at least 80% of its net assets (plus the amount of any borrowings for investment purposes), in equity
securities of real estate investment trusts (“REITs”), including REITs with relatively small market
capitalizations. The Fund may invest in both equity REITs and mortgage REITs. Equity REITs take ownership
interests in real estate. Mortgage REITs invest in mortgages (loans secured by interests in real estate). The Fund may also invest up to 15% of net assets in illiquid holdings.
As investment adviser to the Fund, J.P. Morgan Investment Management Inc. (“JPMIM”) manages the portfolio utilizing a disciplined investment process that focuses on stock
selection rather than focusing on particular sectors or themes. JPMIM’s portfolio management team
continuously screens the target universe of investments, selecting companies that exhibit superior financial
strength, operating returns and attractive growth prospects.
The REIT research team takes an in-depth look at each company’s ability to generate earnings over a long-term
business cycle, rather than focusing solely on near-term expectations. These research efforts allow the team to
determine each
1
company’s normalized earnings (i.e., projected earnings adjusted to reflect what the company should earn at the
midpoint of an economic cycle) and growth potential, from which they evaluate whether each company’s
current price fully reflects its long-term value. As part of its investment process, the adviser seeks to
assess the impact of environmental, social and governance factors on the companies in which the Fund invests.
The adviser’s assessment is based on a proprietary analysis of key opportunities and risks across industries to seek to identify financially material issues on the Fund’s investments in securities and ascertain key issues that merit
engagement with company management. These assessments may not be conclusive and securities of companies may be
purchased and retained by the Fund for reasons other than material ESG factors.
The Fund is non-diversified.
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.
An investment in this Fund or any other fund may not provide a complete investment program. The suitability of an investment in the Fund should be considered based on the
investment objective, strategies and risks described in this prospectus, considered in light of all of the other investments in your portfolio, as well as your risk tolerance, financial goals and time horizons. You may want to consult with a financial advisor to determine if this Fund is suitable for you.
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.
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,
decreases in real estate values, overbuilding, increased competition and other risks related to local or
general economic conditions, increases in operating costs and property taxes, changes in zoning laws, casualty
or condemnation losses, possible environmental liabilities, regulatory limitations on rent, possible lack of
availability of mortgage financing, market saturation, fluctuations in rental income and the value of
underlying properties and extended vacancies of properties, 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.
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 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, 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.
For example, the outbreak of COVID-19, a novel coronavirus disease, has negatively affected economies, markets and individual companies throughout the world, including those in which the Fund invests. The effects of this pandemic to public
health and business and market conditions, including exchange trading suspensions and closures, may continue to
have a significant negative impact on the performance of the Fund’s investments, increase the
Fund’s volatility, negatively impact the Fund’s arbitrage and pricing mechanisms, exacerbate pre-existing political, social and economic risks to the Fund, and negatively impact broad segments of businesses and
populations. The Fund’s operations may be interrupted as a result, which may contribute to the negative
impact on investment performance. In addition, governments, their regulatory agencies, or self-regulatory
organizations may take actions in response to the pandemic that affect the instruments in which the Fund
invests, or the issuers of such instruments, in ways that could have a significant negative impact on the Fund’s investment performance. The full impact of the COVID-19 pandemic, or other future epidemics or pandemics, is currently
unknown.
Smaller
Company Risk. Investments in securities of mid cap and small 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 debt or equity issued by such
companies may be more sudden or erratic than the prices of other securities, especially over the short
term.
Non-Diversified Fund Risk. Since the Fund is non-diversified, it may invest a greater percentage of its assets in a particular issuer or group of issuers than a diversified fund would. This increased investment in fewer issuers may result in the
Fund’s shares being more sensitive to economic results of those issuing the securities.
Concentration Risk. The Fund is
concentrated in securities issued by REITs. This concentration increases the risk of loss to the Fund by
increasing its exposure to economic, business, political or regulatory developments that may be adverse to REITs.
Tax Risk. REITs in which the Fund
will invest are subject to complicated Internal Revenue Code rules. The tax laws that apply to these investment
vehicles have the potential to create
2
negative tax consequences for the Fund, or for certain shareholders of the Fund, including, in particular, charitable
remainder trusts and non-U.S. taxpayers. The Fund is subject to the risk that the issuer of the securities will
fail to comply with certain requirements of the Internal Revenue Code, which could cause adverse tax
consequences.
The Fund may distribute amounts to shareholders in excess of its earnings, resulting in a return of capital. Such distributions are not currently taxable to shareholders; instead, any
such distributions would reduce a shareholder’s tax basis in its shares, resulting in an increased gain,
or decreased loss, on a later redemption or other taxable disposition of such shares. Should any such
distributions exceed a shareholder’s tax basis in its shares, such excess would be treated as gain and taxable to the shareholder in the same manner as gain from a sale of Fund shares.
ETF Shares Trading Risk. Shares
are listed for trading on the NYSE Arca, 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.
Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or
guaranteed by the FDIC, the Federal Reserve Board or any other government agency.
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
Realty Income Fund (the predecessor fund), were transferred to the Fund in a tax-free reorganization as of the
close of business on May 20, 2022. It is currently contemplated that the reorganization, which does not require
the approval of shareholders of the Fund or the predecessor fund, will occur in the first half of 2022. The
Fund has the same investment objective and substantially similar investment strategies as those of the
predecessor fund.
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 Morgan Stanley Capital International (MSCI) US REIT Index. Performance shown for the predecessor
fund’s Class R6 Shares prior to their inception are based on the performance of the predecessor
fund’s Class R5 Shares. The actual returns of the predecessor fund’s Class R6 Shares would have
been different than those shown because the predecessor fund’s Class R6 Shares had different expenses
than the predecessor fund’s Class R5 Shares. 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 and Class
R5 Shares. Had the predecessor fund been structured as an exchange-traded fund (“ETF”), its
performance may have differed. 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. Updated
performance information is available by visiting www.jpmorganfunds.com or by calling 1-844-457-6383 (844-4JPM ETF).
YEAR-BY-YEAR RETURNS |
Best Quarter |
1st quarter, 2019 |
17.24% |
Worst Quarter |
1st quarter, 2020 |
-23.50% |
The Fund’s year-to-date total return |
through |
3/31/22 |
was |
-3.24% |
. |
3
AVERAGE ANNUAL TOTAL RETURNS
(For periods ended December 31, 2021) |
|||
|
Past
1 Year |
Past
5 Years |
Past 10 Years |
CLASS R6 SHARES |
|
|
|
Return Before Taxes |
40.85% |
11.36% |
11.05% |
Return After Taxes on Distributions |
36.97 |
9.53 |
9.10 |
Return After Taxes on Distributions and Sale of Fund Shares |
24.84 |
8.29 |
8.16 |
MSCI US REIT INDEX (Reflects No Deduction for Fees, Expenses, or Taxes) |
43.06 |
10.78 |
11.32 |
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. In some cases, the “Return After Taxes on Distributions and Sale of Fund
Shares” may exceed the “Return Before Taxes” due to an assumed benefit from any losses on a sale of shares at the end of the measurement period.
Management
J.P. Morgan Investment Management Inc. (the adviser)
Portfolio Manager |
Managed the
Fund Since |
Primary Title with
Investment Adviser |
Scott Blasdell |
2022 |
Managing Director |
Jason Ko, CFA |
2022 |
Executive Director |
Mr. Blasdell and Mr. Ko also were the predecessor fund's portfolio managers since 2017 and 2009,
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 (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.
4
SPRO-RINC-ETF-522
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