Form 497 JPMORGAN TRUST IV

April 5, 2021 5:23 PM EDT

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JPMorgan International Equity Funds
STATEMENT OF ADDITIONAL INFORMATION
PART I
March 1, 2021, as supplemented April 5, 2021
JPMORGAN TRUST I (“JPMT I”)
Fund Name A C I L R2 R3 R4 R5 R6
JPMorgan Emerging Markets Equity Fund (“Emerging Markets Equity Fund”) JFAMX JEMCX JEMSX JMIEX JHUJX JHURX JHUKX JEMOX JEMWX
JPMorgan Europe Dynamic Fund (“Europe Dynamic Fund”) VEUAX VEUCX JFESX JFEIX         VEUVX
JPMorgan International Advantage Fund (“International Advantage Fund”) JFTAX JIICX JISIX   JIIZX       JIFFX
JPMorgan International Equity Fund (“International Equity Fund”) JSEAX JIECX VSIEX   JIEZX     JIERX JNEMX
JPMorgan International Focus Fund (formerly, JPMorgan International Unconstrained Equity Fund) (“International Focus Fund”) IUAEX IUCEX IUESX   IUERX     IUEFX IUENX
JPMorgan International Value Fund (“International Value Fund”) JFEAX JIUCX JIESX JNUSX JPVZX     JPVRX JNVMX
JPMORGAN TRUST II (“JPMT II”)
Fund Name A I R6
JPMorgan International Research Enhanced Equity Fund
(“International Research Enhanced Equity Fund”)
OEIAX OIEAX JEIQX
JPMORGAN TRUST IV (“JPMT IV”)
Fund Name A C I R5 R6
JPMorgan Emerging Markets Research Enhanced Equity Fund (“Emerging Markets Research Enhanced Equity Fund”)     EMREX   EMRSX
JPMorgan International Hedged Equity Fund (“International Hedged Equity Fund”) JIHAX JIHCX JIHIX JIHYX JIHRX
SAI-INTEQ-321-2

 

(each a “Fund” and collectively, the “Funds”)
This Statement of Additional Information (“SAI”) is not a prospectus but contains additional information which should be read in conjunction with the prospectuses for the Funds dated March 1, 2021, as supplemented from time to time (“Prospectuses”). Additionally, this SAI incorporates by reference the financial statements included in the annual Shareholder Reports relating to the Funds, dated October 31, 2020 (collectively, “Financial Statements”). The Prospectuses and the Financial Statements, including the Independent Registered Public Accounting Firm’s Reports, are available, without charge upon request by contacting JPMorgan Distribution Services, Inc. (“JPMDS” or the “Distributor”), the Funds’ distributor, at 1111 Polaris Parkway, Columbus, OH 43240.
This SAI is divided into two Parts – Part I and Part II. Part I of this SAI contains information that is particular to each Fund. Part II of this SAI contains information that generally applies to the Funds and other J.P. Morgan Funds.
For more information about the Funds or the Financial Statements, simply write or call:
JPMorgan Funds Services
P.O. Box 219143
Kansas City, MO 64121-9143
1-800-480-4111

 

Part I
Table of Contents

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PLEASE SEE PART II OF THIS SAI FOR ITS TABLE OF CONTENTS

 

GENERAL
The Trusts and the Funds
The Funds (other than the JPMorgan Emerging Markets Research Enhanced Equity Fund, the JPMorgan International Hedged Equity Fund and the JPMorgan International Research Enhanced Equity Fund) are series of JPMorgan Trust I (“JPMT I”), an open-end, management investment company formed as a statutory trust under the laws of the State of Delaware on November 12, 2004, pursuant to a Declaration of Trust dated November 5, 2004, as subsequently amended. Each Fund (other than the Emerging Markets Research Enhanced Equity Fund, the International Hedged Equity Fund, the International Research Enhanced Equity Fund, and the International Focus Fund Fund) is a successor mutual fund to J.P. Morgan Funds that were series of J.P. Morgan Mutual Fund Series (“Predecessor Funds”) prior to February 18, 2005. Each of the Predecessor Funds operated as a series of another legal entity prior to reorganizing and redomiciling as series of J.P. Morgan Mutual Fund Series (“JPMMFS”) on February 18, 2005.
The International Research Enhanced Equity Fund is a series of JPMorgan Trust II (“JPMT II” and, collectively with JPMT I, the “Trusts”), an open-end, management investment company formed as a statutory trust under the laws of the State of Delaware on November 12, 2004, pursuant to a Declaration of Trust dated November 5, 2004, as subsequently amended. The JPMorgan International Research Enhanced Equity Fund, which is a series of JPMT II was formerly a series of One Group Mutual Funds, a Massachusetts business trust which was formed on May 23, 1985.
The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund are series of JPMorgan Trust IV (“JPMT IV” and, collectively with JPMT I and JPMT II, the “Trusts”), an open-end, management investment company formed as a statutory trust under the laws of the State of Delaware on November 11, 2015, pursuant to a Declaration of Trust dated November 11, 2015, as subsequently amended. In addition to the Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund, the Trust consists of other series representing separate investment funds (each a “J.P. Morgan Fund”).
The Predecessor Funds were formerly series of the following business trusts (the “Predecessor Trusts”):
J.P. Morgan Institutional Funds (“JPMIF”)
JPMorgan Emerging Markets Equity Fund
JPMorgan International Value Fund
J.P. Morgan Mutual Fund Group (“JPMMFG”)
JPMorgan Europe Dynamic Fund
JPMorgan International Advantage Fund
J.P. Morgan Mutual Fund Select Group (“JPMMFSG”)
JPMorgan International Equity Fund
One Group Mutual Funds (“OGMF”)
JPMorgan International Research Enhanced Equity Fund
JPMIF. Prior to February 19, 2005, the Emerging Markets Equity Fund and International Value Fund were series of JPMIF, an open-end, management investment company which was organized as a business trust under the laws of The Commonwealth of Massachusetts on November 4, 1992.
JPMMFG. Prior to February 19, 2005, the Europe Dynamic Fund and the International Advantage Fund were series of JPMMFG, an open-end, management investment company which was organized as a business trust under the laws of The Commonwealth of Massachusetts on May 11, 1987. JPMMFG liquidated November 29, 2012, and is in the process of winding up its affairs. Prior to July 31, 2018, the names of the Funds were the JPMorgan Intrepid European Fund and the JPMorgan Intrepid International Fund, respectively.
JPMMFSG. Prior to February 19, 2005, International Equity Fund was a series of JPMMFSG, an open-end, management investment company which was organized as a business trust under the laws of The Commonwealth of Massachusetts on October 1, 1996.
Part I - 1

 

After the close of business on February 18, 2005, the JPMorgan International Equity Fund acquired all of the assets and liabilities of One Group Diversified International Fund pursuant to an Agreement and Plan of Reorganization dated November 22, 2004 between JPMMFSG, on behalf of JPMorgan International Equity Fund, and One Group Mutual Funds, on behalf of One Group Diversified International Fund.
On January 20, 2005, shareholders of JPMMFS approved the redomiciliation of JPMMFS as a Delaware statutory trust to be called “JPMorgan Trust I” (“Redomiciliation”). The Redomiciliation took place after the close of business on February 18, 2005, at which time each Predecessor Fund became a series of JPMorgan Trust I. The Redomiciliation was effective after each of the reorganizations pursuant to the Shell Reorganization Agreements.
At shareholder meetings held on January 20, 2005 and February 3, 2005, shareholders of One Group Mutual Funds approved the redomiciliation of One Group Mutual Funds as a Delaware statutory trust to be called JPMorgan Trust II. The redomiciliation was effective after the close of business on February 18, 2005.
Share Classes
Shares in the Funds of the Trusts are generally offered in multiple classes. The Board of Trustees of JPMT I, JPMT II and JPMT IV have authorized the issuance and sale of the following share classes of the Funds:
Fund   Class A   Class C   Class I   Class L   Class R2   Class R3   Class R4   Class R5   Class R6
Emerging Markets Equity Fund   X   X   X   X   X   X   X   X   X
Emerging Markets Research Enhanced Equity Fund           X                       X
Europe Dynamic Fund   X   X   X   X                   X
International Advantage Fund   X   X   X       X               X
International Equity Fund   X   X   X       X           X   X
International Focus Fund (formerly, International Unconstrained Equity Fund)   X   X   X       X           X   X
International Hedged Equity Fund   X   X   X                   X   X
International Research Enhanced Equity Fund   X       X                       X
International Value Fund   X   X   X   X   X           X   X
Effective December 1, 2016, Class L shares of the Funds were not available for purchase by new investors, except as described in the Funds’ Prospectuses.
Miscellaneous
This SAI describes the financial history, investment strategies and policies, management and operation of each of the Funds in order to enable investors to select the Fund or Funds which best suit their needs.
This SAI provides additional information with respect to the Funds and should be read in conjunction with the relevant Fund's current Prospectuses. Capitalized terms not otherwise defined herein have the meanings accorded to them in the applicable Prospectuses. The Funds' executive offices are located at 277 Park Avenue, New York, NY 10172.
This SAI is divided into two Parts – Part I and Part II. Part I of this SAI contains information that is particular to each Fund. Part II of this SAI contains information that generally applies to the Funds and other series representing separate investment funds or portfolios of JPMT I, JPMT II, JPMT IV, J.P. Morgan Mutual Fund Investment Trust (“JPMMFIT”), J.P. Morgan Fleming Mutual Fund Group, Inc. (“JPMFMFG”) and Undiscovered Managers Funds (“UMF”) (each a “J.P. Morgan Fund,” and together with the Funds, the “J.P. Morgan Funds”). Throughout this SAI, JPMT I, JPMT II, JPMT IV, JPMMFIT, JPMFMFG and UMF are each referred to as a “Trust” and collectively, as the “Trusts.” Each Trust’s Board of Trustees, or Board of Directors in the case of JPMFMFG, is referred to herein as the “Board of Trustees” and each trustee or director is referred to as a “Trustee.”
Part I - 2

 

The Funds are advised by J.P. Morgan Investment Management Inc. (“JPMIM”). Certain other of the J.P. Morgan Funds are sub-advised by J.P. Morgan Private Investments Inc. (“JPMPI”) or Fuller & Thaler Asset Management, Inc. (“Fuller & Thaler”). JPMIM is also referred to herein as the “Adviser.” JPMPI and Fuller & Thaler are also referred to herein as the “Sub-Advisers” and, individually, as the “Sub-Adviser.”
Investments in the Funds are not deposits or obligations of, nor guaranteed or endorsed by, JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”), an affiliate of the Adviser, or any other bank. Shares of the Funds are not federally insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency. An investment in the Funds is subject to risk that may cause the value of the investment to fluctuate, and when the investment is redeemed, the value may be higher or lower than the amount originally invested by the investor.
The Funds are not subject to registration or regulation as a “commodity pool operator” as defined in the Commodity Exchange Act because the Funds have claimed an exclusion from that definition.
INVESTMENT POLICIES
The following investment policies have been adopted by the respective Trust with respect to the applicable Funds. The investment policies listed below under the heading “Fundamental Investment Policies”, as well as the investment objective of the International Research Enhanced Equity Fund, are “fundamental” policies which, under the Investment Company Act of 1940, as amended (the “1940 Act”), may not be changed without the vote of a majority of the outstanding voting securities of each Fund, as such term is defined in “Additional Information” in Part II of this SAI. All other investment policies of each of the Funds (including their respective investment objectives for each Fund other than the International Research Enhanced Equity Fund) are non-fundamental, unless otherwise designated in the Prospectuses or herein, and may be changed by the Trustees of each Fund without shareholder approval.
The percentage limitations contained in the policies below apply at the time of purchase of the securities. If a percentage or rating restriction on investment or use of assets set forth in a fundamental investment policy or a non-fundamental investment policy or in a Prospectus is adhered to at the time of investment, later changes in percentage resulting from any cause other than actions by a Fund will not be considered a violation. With respect to fundamental investment policies (2), (3) and (4), the 1940 Act generally limits a Fund’s ability to borrow money on a non-temporary basis if such borrowings constitute “senior securities.” As noted in “Investment Strategies and Policies — Miscellaneous Investment Strategies and Risks — Borrowings” in SAI Part II, in addition to temporary borrowing, a Fund may borrow from any bank, provided that immediately after any such borrowing there is an asset coverage of at least 300% for all borrowings by a Fund and provided further, that in the event that such asset coverage shall at any time fall below 300%, a Fund shall, within three days (not including Sundays and holidays) thereafter or such longer period as the U.S. Securities and Exchange Commission (“SEC”) may prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the asset coverage of such borrowing shall be at least 300%. A Fund may also borrow money or engage in economically similar transactions if those transactions do not constitute “senior securities” under the 1940 Act as interpreted based upon no-action letters and other pronouncements of the staff of the SEC. Under current pronouncements, certain Fund positions (e.g., reverse repurchase agreements) are excluded from the definition of “senior security” so long as a Fund maintains adequate cover, segregation of assets or otherwise. Similarly, a short sale will not be considered a senior security if a Fund takes certain steps contemplated by SEC staff pronouncements, such as ensuring the short sale transaction is adequately covered. If the value of a Fund’s holdings of illiquid securities at any time exceeds the percentage limitation applicable at the time of acquisition due to subsequent fluctuations in value or other reasons, the Fund’s Adviser will consider what actions, if any, are appropriate to maintain adequate liquidity.
For purposes of the fundamental investment policies regarding industry concentration for the International Focus Fund, “to concentrate” generally means to invest more than 25% of a Fund’s total assets, taken at market value at the time of investment. For purposes of fundamental investment policies involving industry concentration, “group of industries” means a group of related industries, as determined in good faith by the Adviser, based on published classifications or other sources. For purposes of fundamental investment policies regarding industry concentration, the Adviser may classify issuers by industry in accordance with classifications set forth in the Directory of Companies Filing Annual Reports with the SEC or other sources. In the absence of such classification or if the Adviser or the Sub-Adviser determines in good faith based on its own information that the economic characteristics affecting a particular issuer make it more appropriate to be considered engaged in a different industry, the Adviser (or Sub-Adviser) may classify an issuer accordingly.
Part I - 3

 

Accordingly, the composition of an industry or group of industries may change from time to time. For purposes of fundamental investment policies involving industry concentration, “group of industries” means a group of related industries, as determined in good faith by the Adviser or the Sub-Adviser, as may be the case, based on published classifications or other sources.
Finally, while the International Focus Fund is generally not limited within its equity universe by any particular capitalization, sector or style and may invest in any foreign country, including emerging market countries, the Fund is subject to the fundamental and non-fundamental investment policies and investment restrictions applicable to such Fund that are described herein and by any restrictions imposed by applicable law.
Fundamental Investment Policies.
(1) (a) The International Value Fund, Emerging Markets Equity Fund, International Focus Fund, International Advantage Fund and the International Research Enhanced Equity Fund may not make any investment inconsistent with their classification as a diversified investment company under the 1940 Act;
(b) The International Equity Fund may not purchase securities of any issuer if such purchase would not be consistent with the maintenance of the Fund’s status as a diversified company under the 1940 Act, or the rules or regulations thereunder, as such statute, rules or regulations may be amended from time to time;
(c) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may not make any investment inconsistent with its classification as a diversified investment company as that term is defined in the 1940 Act or as interpreted, modified or applied by the SEC or its staff;
(2) (a) The International Value Fund, Emerging Markets Equity Fund and the International Advantage Fund may not purchase any security which would cause the Fund to concentrate its investments in the securities of issuers primarily engaged in any particular industry except as permitted by the SEC;
(b) The International Equity Fund and Europe Dynamic Fund may not purchase any security of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, or repurchase agreements secured thereby), if as a result, more than 25% of that Fund’s total assets would be invested in the securities of companies whose principal business activities are in the same industry, except as permitted by the SEC. Notwithstanding the foregoing, with respect to a Fund’s permissible futures and options transactions in U.S. government securities, positions in such options and futures shall not be subject to this policy. The International Research Enhanced Equity Fund may not purchase any securities that would cause more than 25% of the total assets of the Fund to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that this limitation does not apply to investments in obligations issued or guaranteed by the U.S. government or its agencies and instrumentalities and repurchase agreements involving such securities. For purposes of this limitation, (i) utilities will be divided according to their services (for example, gas, gas transmission, electric and telephone will each be considered a separate industry); and (ii) wholly-owned finance companies will be considered to be in the industries of their parents if their activities are primarily related to financing the activities of their parents;
(c) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may not purchase any security which would cause the Fund to concentrate its investments in the securities of issuers primarily engaged in any particular industry or group of industries, except as permitted by the 1940 Act or any applicable law, rule, order or interpretation;
(d) International Focus Fund may not purchase any security which would cause the Fund to concentrate its investments in the securities of issuers primarily engaged in any particular industry or group of industries. This restriction does not apply to investments in securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, or repurchase agreements secured thereby, and futures and options transactions issued or guaranteed by the U.S. government or any of its agencies or instrumentalities;
(3) (a) The Emerging Markets Equity Fund, International Research Enhanced Equity Fund, International Focus Fund, International Value Fund and the International Advantage Fund may not issue senior securities, except as permitted under the 1940 Act or any rule, order or interpretation thereunder;
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(b) The Europe Dynamic Fund and International Equity Fund may not issue any senior security (as defined in the 1940 Act) except that (i) a Fund may engage in transactions that may result in the issuance of senior securities to the extent permitted under applicable regulations and interpretations under the 1940 Act or an exemptive order; (ii) a Fund may acquire other securities, the acquisition of which may result in the issuance of a senior security, to the extent permitted under applicable regulations or interpretations of the 1940 Act; (iii) subject to the policies set forth above, a Fund may borrow money as authorized by the 1940 Act. For purposes of this policy, collateral arrangements with respect to permissible options and futures transactions, including deposits of initial and variation margin, are not considered to be the issuance of a senior security;
(c) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may issue senior securities, to the extent permitted by the 1940 Act or any applicable law, rule, order or interpretation;
(4) (a) The Emerging Markets Equity Fund, International Equity Fund, International Research Enhanced Equity Fund, International Value Fund, Europe Dynamic Fund and International Advantage Fund may not borrow money, except to the extent permitted under the 1940 Act or the rules or regulations thereunder, as such statute, rules or regulations may be amended from time to time or as permitted by order or interpretation of the SEC;
(b) The International Focus Fund may not borrow money, except to the extent permitted by applicable law;
(c) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may borrow money, to the extent permitted by the 1940 Act or any applicable law, rule, order or interpretation;
(5) (a) The Emerging Markets Equity Fund, International Equity Fund, International Research Enhanced Equity Fund, International Value Fund, Europe Dynamic Fund and International Advantage Fund may not underwrite securities of other issuers, except to the extent that a Fund, in disposing of portfolio securities, may be deemed an underwriter within the meaning of the Securities Act of 1933, as amended (the “1933 Act”);
(b) The International Focus Fund may not underwrite securities of other issuers, except to the extent that the Fund, in disposing of portfolio securities, may be deemed an underwriter under certain securities laws;
(c) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may not underwrite the securities of other issuers, except to the extent that the Fund, may be deemed an underwriter under certain securities laws in disposing of portfolio securities or in connection with investments in other investment companies;
(6) (a) The Emerging Markets Equity Fund, International Value Fund and the International Advantage Fund may not purchase or sell real estate, except that, to the extent permitted by applicable law, these Funds may (a) invest in securities or other instruments directly or indirectly secured by real estate, (b) invest in securities or other instruments issued by issuers that invest in real estate, and (c) (except for the International Advantage Fund) make direct investments in mortgages;
(b) The International Equity Fund, International Research Enhanced Equity Fund and Europe Dynamic Fund may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent a Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business). Investments by a Fund in securities backed by mortgages or real estate or in marketable securities of companies engaged in such activities are not hereby precluded;
(c) The International Focus Fund may not invest directly in real estate unless it is acquired as a result of ownership of securities or other instruments. This restriction shall not prevent the Fund from investing in securities or other instruments (a) issued by companies that invest, deal or otherwise engage in transactions in real estate, or (b) backed or secured by real estate or interests in real estate;
(d) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may purchase or sell real estate or any interest therein (such as securities or instruments backed by or related to real estate) to the extent permitted by the 1940 Act or any applicable law, rule, order or interpretation;
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(7) (a) The Emerging Markets Equity Fund, International Value Fund and the International Advantage Fund may not purchase or sell commodities or commodity contracts unless acquired as a result of ownership of securities or other instruments issued by persons that purchase or sell commodities or commodities contracts; but this shall not prevent a Fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments that are not related to physical commodities;
(b) The International Equity Fund and Europe Dynamic Fund may not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments; this shall not prevent a Fund from (i) purchasing or selling options on futures contracts or from investing in securities or other instruments backed by physical commodities or (ii) engaging in forward purchase or sales of foreign currencies or securities;
(c) The International Research Enhanced Equity Fund may not purchase physical commodities or contracts relating to physical commodities, except as permitted under the 1940 Act, or operate as a commodity pool, in each case as interpreted or modified by regulatory authority having jurisdiction, from time to time;
(d) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may purchase and sell commodities to the extent permitted by the 1940 Act or any applicable law, rule, order or interpretation;
(e) The International Focus Fund may not purchase or sell commodities or commodity contracts except as may be permitted by the 1940 Act or unless acquired as a result of ownership of securities or other instruments issued by persons that purchase or sell commodities or commodities contracts; but this shall not prevent the Fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments including derivatives related to physical commodities;
(8) (a) The Funds, except for the International Research Enhanced Equity Fund, may make loans to other persons, in accordance with a Fund’s investment objective and policies and to the extent permitted by applicable law;
(b) The Emerging Markets Research Enhanced Equity Fund and the International Hedged Equity Fund may make loans to the extent permitted by the 1940 Act or any applicable law, rule, order or interpretation;
(c) The International Research Enhanced Equity Fund may not make loans, except that the Fund may (i) purchase or hold debt instruments in accordance with its investment objective and policies; (ii) enter into repurchase agreements; (iii) engage in securities lending as described in the Prospectus and the Statement of Additional Information; and (iv) make loans to the extent permitted by an order issued by the SEC;
(9) The Europe Dynamic Fund may not invest in securities which are not traded or have not sought a listing on a stock exchange, over-the-counter market or other organized securities market that is open to the international public and on which securities are regularly traded if, regarding all such securities, more than 10% of its total net assets would be invested in such securities immediately after and as a result of such transaction;
(10) The Europe Dynamic Fund may not deal in put options, write or purchase call options, including warrants, unless such options or warrants are covered and are quoted on a stock exchange or dealt in on a recognized market, and, at the date of the relevant transaction: (i) call options written do not involve more than 25%, calculated at the exercise price, of the market value of the securities within the Fund’s portfolio excluding the value of any outstanding call options purchased, and (ii) the cost of call options or warrants purchased does not exceed, in terms of premium, 2% of the value of the net assets of the Fund;
(11) The Europe Dynamic Fund may not purchase securities of any issuer if such purchase at the time thereof would cause more than 10% of the voting securities of such issuer to be held by the Fund;
(12) The International Research Enhanced Equity Fund may not purchase securities on margin or sell securities short for use of short-term credit necessary for clearance of purchases of portfolio securities;
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(13) The International Research Enhanced Equity Fund may not purchase participation or other direct interests in oil, gas or mineral exploration or development programs (although investments by the Fund in marketable securities of companies engaged in such activities are not hereby precluded);
(14) The International Research Enhanced Equity Fund may not purchase securities of other investment companies except as permitted by the 1940 Act and rules, regulations and applicable exemptive relief thereunder.
In addition, as a matter of fundamental policy, notwithstanding any other investment policy or restriction, the International Equity Fund and Europe Dynamic Fund may seek to achieve their investment objectives by investing all of their investable assets in another investment company having substantially the same investment objective and policies as the Funds.
Pursuant to fundamental policy (8), the International Focus Fund may lend to other J.P. Morgan Funds as described under “Interfund Lending” in Part II of this Statement of Additional Information. In addition, the Funds may invest in types of investments and engage in transactions that are considered lending transactions. The types of investment and strategies that the Funds may use are described in further detail in the Prospectus and this SAI.
For the purposes of investment policies (6)(b) and 6(d) above, real estate includes real estate limited partnerships. For the purposes of investment policy (2)(b) above, industrial development bonds, where the payment of principal and interest is the ultimate responsibility of companies within the same industry, are grouped together as an “industry.” Investment policy (2)(b) above, however, is not applicable to investments by a Fund in municipal obligations where the issuer is regarded as a state, city, municipality or other public authority since such entities are not members of an “industry.” Supranational organizations are collectively considered to be members of a single “industry” for purposes of policy (2)(b) above.
Fundamental investment policy (4)(b) shall be interpreted based upon no-action letters and other pronouncements of the staff of the SEC. Generally, the 1940 Act limits the Fund’s ability to borrow money on a non-temporary basis if such borrowings constitute “senior securities.” As noted above and in “Investment Strategies and Policies — Miscellaneous Investment Strategies and Risks — Borrowings” in SAI Part II, in addition to temporary borrowing, the Fund may borrow from any bank, provided that immediately after any such borrowing there is asset coverage of at least 300% for all borrowings by the Fund. The Fund may also borrow money or engage in economically similar transactions if those transactions do not constitute “senior securities” under the 1940 Act. Under current pronouncements, certain Fund positions (e.g. reverse repurchase agreements) are excluded from the definition of “senior security” so long as the Fund maintains adequate cover, segregation of assets or otherwise. Similarly, a short sale will not be considered a senior security if the Fund takes certain steps contemplated by SEC staff pronouncements, such as ensuring the short sale transaction is adequately covered.
Non-Fundamental Investment Policies.
Each Fund is subject to the following non-fundamental policies which may be changed without shareholder approval.
(1) The Emerging Markets Equity Fund, International Equity Fund, International Value Fund, Europe Dynamic Fund and International Advantage Fund may not make short sales of securities other than short sales “against the box”, maintain a short position, or purchase securities on margin except for short-term credits necessary for clearance of portfolio transactions, provided that this policy will not be applied to limit the use of options, futures contracts and relation options, in the manner otherwise permitted by the investment restrictions, policies and investment program of a Fund. No Fund has the current intention of making short sales against the box. This policy shall not be deemed to be applicable to the purchase or sale of when-issued or delayed delivery securities, or to short sales that are covered in accordance with SEC rules;
(2) The Emerging Markets Equity Fund, International Equity Fund, International Research Enhanced Equity Fund, International Value Fund, Europe Dynamic Fund and International Advantage Fund may not acquire securities of other investment companies, except as permitted by the 1940 Act or any order pursuant thereto;
(3) Each of the Europe Dynamic Fund and International Equity Fund may not, with respect to 50% of its assets, hold more than 10% of the outstanding voting securities of any issuer;
(4) The Europe Dynamic Fund and International Equity Fund may not purchase or sell interests in oil, gas or mineral leases;
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(5) The Europe Dynamic Fund and International Equity Fund may not write, purchase or sell any put or call option or any combination thereof, provided that this shall not prevent (i) the writing, purchasing or selling of puts, calls or combinations thereof with respect to portfolio securities or (ii) with respect to a Fund’s permissible futures and options transactions, the writing, purchasing, ownership, holding or selling of futures and options positions or of puts, calls or combinations thereof with respect to futures;
(6) Each of the Europe Dynamic Fund and International Equity Fund may invest up to 5% of its total assets in the securities of any one investment company, but may not own more than 3% of the securities of any one investment company or invest more than 10% of its total assets in the securities of other investment companies; and
(7) None of the Funds may acquire the securities of registered open-end investment companies or registered unit investment trusts in reliance on Section 12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.
(8) The International Focus Fund may not acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) in excess of the limits contained in Section 12(d)(1)(A) of the 1940 Act, except to the extent it:
(i) invests in affiliated money market funds for short-term cash management purposes,
(ii) engages in interfund borrowing and lending transactions, or
(iii) receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company.
For investment policy purposes for the Europe Dynamic Fund and International Equity Fund, the issuer of a tax exempt security is deemed to be the entity (public or private) ultimately responsible for the payment of the principal of and interest on the security.
With respect to the Europe Dynamic Fund, as a matter of non-fundamental policy, to the extent permitted under applicable law, the above policies do not apply to the following investments (“OECD investments”): (i) any security issued by or the payment of principal and interest on which is guaranteed by the government of any member state of the Organization for Economic Cooperation and Development (“OECD country”); and (ii) any fixed income security issued in any OECD country by any public or local authority or nationalized industry or undertaking of any OECD country or anywhere in the world by the International Bank for Reconstruction and Development, European Investment Bank, Asian Development Bank or any body which is, in the Trustees’ opinion, of similar standing. However, no investment may be made in any OECD investment of any one issue if that would result in the value of a Fund’s holding of that issue exceeding 30% of the net asset value of the Fund and, if the Fund’s portfolio consists only of OECD investments, those OECD investments shall be of at least six different issues.
INVESTMENT PRACTICES
The Funds invest in a variety of securities and employ a number of investment techniques. What follows is a list of some of the securities and techniques which may be utilized by the Funds. For a more complete discussion, see the “Investment Strategies and Policies” section in Part II of this SAI.
FUND NAME FUND CODE
Emerging Markets Equity Fund 1
Emerging Markets Research Enhanced Equity Fund 2
Europe Dynamic Fund 3
International Advantage Fund 4
International Equity Fund 5
International Focus Fund 6
International Hedged Equity Fund 7
International Research Enhanced Equity Fund 8
International Value Fund 9
    
Instrument Fund Code Part II
Section Reference
Adjustable Rate Mortgage Loans (“ARMs”): Loans in a mortgage pool which provide for a fixed initial mortgage interest rate for a specified period of time, after which the rate may be subject to periodic adjustments. 3, 5 Mortgage-Related Securities
Part I - 8

 

Instrument Fund Code Part II
Section Reference
Asset-Backed Securities: Securities secured by company receivables, home equity loans, truck and auto loans, leases, and credit card receivables or other securities backed by other types of receivables or other assets. 3, 5 Asset-Backed Securities
Auction Rate Securities: Auction rate municipal securities and auction rate preferred securities issued by closed-end investment companies. 3, 5 Auction Rate Securities
Bank Obligations: Bankers’ acceptances, certificates of deposit and time deposits. Bankers’ acceptances are bills of exchange or time drafts drawn on and accepted by a commercial bank. Maturities are generally six months or less. Certificates of deposit are negotiable certificates issued by a bank for a specified period of time and earning a specified return. Time deposits are non-negotiable receipt issued by a bank in exchange for the deposit of funds. 1, 3-5, 7-9 Bank Obligations
Borrowings: A Fund may borrow for temporary purposes and/or for investment purposes. Such a practice will result in leveraging of a Fund’s assets and may cause a Fund to liquidate portfolio positions when it would not be advantageous to do so. A Fund must maintain continuous asset coverage of 300% of the amount borrowed, with the exception for borrowings not in excess of 5% of the Fund’s total assets made for temporary administrative purposes. 1-5, 7-9 Miscellaneous Investment Strategies and Risks
Brady Bonds: Securities created through the exchange of existing commercial bank loans to public and private entities in certain emerging markets for new bonds in connection with debt restructurings. 1, 3-5, 7-9 Foreign Investments (including Foreign Currencies)
Call and Put Options: A call option gives the buyer the right to buy, and obligates the seller of the option to sell, a security at a specified price at a future date. A put option gives the buyer the right to sell, and obligates the seller of the option to buy a security at a specified price at a future date. The Funds will sell only covered call and secured put options. 1, 3-9 Options and Futures Transactions
Commercial Paper: Secured and unsecured short-term promissory notes issued by corporations and other entities. Maturities generally vary from a few days to nine months. 1, 3-5, 8-9 Commercial Paper
Commodity-Linked Derivatives: Instruments whose value derives from the price of a commodity, including commodity futures and commodity options. 1, 3-5, 8- 9 Miscellaneous Investment Strategies and Risks
Common Stock: Shares of ownership of a company. 1-9 Equity Securities, Warrants and Rights
Common Stock, Warrants and Rights: Securities, typically issued with preferred stock or bonds, that give the holder the right to buy a proportionate amount of common stock at a specified price. 1-9 Equity Securities, Warrants and Rights
Convertible Securities: Bonds or preferred stock that can convert to common stock including contingent convertible securities. 1-9 Convertible Securities
Corporate Debt Securities: May include bonds and other debt securities of domestic and foreign issuers, including obligations of industrial, utility, banking and other corporate issuers. 1, 3-5, 8- 9 Debt Instruments
Part I - 9

 

Instrument Fund Code Part II
Section Reference
Credit Default Swaps (“CDSs”): A swap agreement between two parties pursuant to which one party pays the other a fixed periodic coupon for the specified life of the agreement. The other party makes no payment unless a credit event, relating to a predetermined reference asset, occurs. If such an event occurs, the party will then make a payment to the first party, and the swap will terminate. 3, 5 Swaps and Related Swap Products
Custodial Receipts: A Fund may acquire securities in the form of custodial receipts that evidence ownership of future interest payments, principal payments or both on certain U.S. Treasury notes or bonds in connection with programs sponsored by banks and brokerage firms. These are not considered to be U.S. government securities. These notes and bonds are held in custody by a bank on behalf of the owners of the receipts. 3, 5 Custodial Receipts
Demand Features: Securities that are subject to puts and standby commitments to purchase the securities at a fixed price (usually with accrued interest) within a fixed period of time following demand by a Fund. 3, 5 Demand Features
Emerging Market Securities: Securities issued by issuers or governments in countries with emerging economies or securities markets which may be undergoing significant evolution and rapid development. 1-6, 8- 9 Foreign Investments (including Foreign Currencies)
Exchange-Traded Fund (“ETFs”): Ownership interest in unit investment trusts, depositary receipts, and other pooled investment vehicles that hold a portfolio of securities or stocks designed to track the price performance and dividend yield of a particular broad based, sector or international index. ETFs include a wide range of investments. 1-9 Investment Company Securities and Exchange Traded Funds
Foreign Currency Transactions: Strategies used to hedge against interest rate and currency risks, for other risk management purposes or to increase income or gain to the Fund. These strategies may consist of use of any of the following: options on currencies, currency futures, options on such futures, forward foreign currency transactions (including non-deliverable forwards (“NDFs”)), forward rate agreements and interest rate and currency swaps, caps and floors. 1-9 Foreign Investments (including Foreign Currencies)
Foreign Investments: Equity and debt securities (e.g., bonds and commercial paper) of foreign entities and obligations of foreign branches of U.S. banks and foreign banks. Foreign securities may also include American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), European Depositary Receipts (“EDRs”) and American Depositary Securities. 1-9 Foreign Investments (including Foreign Currencies)
High Yield/High Risk Securities/Junk Bonds: Securities that are generally rated below investment grade by the primary rating agencies or are unrated but are deemed by a Fund’s adviser to be of comparable quality. 3, 5 Debt Instruments
Inflation-Linked Debt Securities: Include fixed and floating rate debt securities of varying maturities issued by the U.S. government as well as securities issued by other entities such as corporations, foreign governments and foreign issuers. 3, 5 Debt Instruments
Initial Public Offerings (“IPOs”): A transaction in which a previously private company makes its first sale of stock to the public. 1-9 Equity Securities, Warrants and Rights
Part I - 10

 

Instrument Fund Code Part II
Section Reference
Interfund Lending: Involves lending money and borrowing money for temporary purposes through a credit facility. 1-6, 8-9 Miscellaneous Investment Strategies and Risks
Inverse Floating Rate Instruments: Leveraged variable debt instruments with interest rates that reset in the opposite direction from the market rate of interest to which the inverse floater is indexed. 5 Inverse Floating and Interest Rate Caps
Investment Company Securities: Shares of other investment companies, including money market funds for which the adviser and/or its affiliates serve as investment adviser or administrator. The adviser will waive certain fees when investing in funds for which it serves as investment adviser, to the extent required by law or by contract. 1-9 Investment Company Securities and Exchange Traded Funds
Loan Assignments and Participations: Assignments of, or participations in all or a portion of loans to corporations or to governments, including governments in less developed countries. 3, 5 Loans
Master Limited Partnerships: Limited partnerships that are publicly traded on a securities exchange. 1, 3-5, 8-9 Master Limited Partnerships
Mortgages (Directly Held): Debt instruments secured by real property. 3, 5 Mortgage-Related Securities
Mortgage-Backed Securities: Debt obligations secured by real estate loans and pools of loans, such as collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities (“CMBSs”), and other asset-backed structures. 3, 5 Mortgage-Related Securities
Mortgage Dollar Rolls: A transaction in which a Fund sells securities for delivery in a current month and simultaneously contracts with the same party to repurchase similar but not identical securities on a specified future date. 3, 5 Mortgage-Related Securities
Municipal Securities: Securities issued by a state or political subdivision to obtain funds for various public purposes. Municipal securities include private activity bonds and industrial development bonds, as well as general obligation notes, tax anticipation notes, bond anticipation notes, revenue anticipation notes, other short-term tax-exempt obligations, municipal leases, obligations of municipal housing authorities and single family revenue bonds. 3, 5 Municipal Securities
New Financial Products: New options and futures contracts and other financial products continue to be developed and a Fund may invest in such options, contracts and products. 1-6, 8-9 Miscellaneous Investment Strategies and Risks
Obligations of Supranational Agencies: Obligations which are chartered to promote economic development and are supported by various governments and governmental agencies. 1, 3-5, 8-9 Foreign Investments (including Foreign Currencies)
Options and Futures Transactions: A Fund may purchase and sell (a) exchange traded and over-the-counter put and call options on securities, indexes of securities and futures contracts on securities and indexes of securities, and (b) futures contracts on securities and indexes of securities. 1-9 Options and Futures Transactions
Preferred Stock: A class of stock that generally pays a dividend at a specified rate and has preference over common stock in the payment of dividends and in liquidation. 1-9 Equity Securities, Warrants and Rights
Private Placements, Restricted Securities and Other Unregistered Securities: Securities not registered under the Securities Act of 1933, such as privately placed commercial paper and Rule 144A securities. 1-9 Miscellaneous Investment Strategies and Risks
Part I - 11

 

Instrument Fund Code Part II
Section Reference
Real Estate Investment Trusts (“REITs”): Pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interest. 1-9 Real Estate Investment Trusts
Repurchase Agreements: The purchase of a security and the simultaneous commitment to return the security to the seller at an agreed upon price on an agreed upon date. This is treated as a loan. 1, 3-5, 8-9 Repurchase Agreements
Reverse Repurchase Agreements: The sale of a security and the simultaneous commitment to buy the security back at an agreed upon price on an agreed upon date. This is treated as a borrowing by a Fund. 1, 3-5, 8-9 Reverse Repurchase Agreements
Securities Issued in Connection with Reorganizations and Corporate Restructurings: In connection with reorganizing or restructuring of an issuer, an issuer may issue common stock or other securities to holders of its debt securities. 1, 3-6, 8-9 Miscellaneous Investment Strategies and Risks
Securities Lending: The lending of up to 33 13% of a Fund’s total assets. In return, a Fund will receive cash, other securities, and/or letters of credit as collateral. 1-9 Securities Lending
Short Selling: A Fund sells a security it does not own in anticipation of a decline in the market value of the security. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. A Fund is obligated to replace the security borrowed by purchasing it subsequently at the market price at the time of replacement. 1, 3-5, 8-9 Short Selling
Short-Term Funding Agreements: Agreements issued by banks and highly rated U.S. insurance companies such as Guaranteed Investment Contracts (“GICs”) and Bank Investment Contracts (“BICs”). 1, 3-5, 8-9 Short-Term Funding Agreements
Sovereign Obligations: Investments in debt obligations issued or guaranteed by a foreign sovereign government or its agencies, authorities or political subdivisions. 1, 3-5, 8-9 Foreign Investments (including Foreign Currencies)
Stripped Mortgage-Backed Securities: Derivative multi-class mortgage securities which are usually structured with two classes of shares that receive different proportions of the interest and principal from a pool of mortgage assets. These include Interest- Only (“IO”) and Principal-Only (“PO”) securities issued outside a Real Estate Mortgage Investment Conduit (“REMIC”) or CMO structure. 3, 5 Mortgage-Related Securities
Structured Investments: A security having a return tied to an underlying index or other security or asset class. Structured investments generally are individually negotiated agreements and may be traded over-the-counter. Structured investments are organized and operated to restructure the investment characteristics of the underlying index, commodity, currency or financial instrument. 1-5, 8-9 Structured Investments
Swaps and Related Swap Products: Swaps involve an exchange of obligations by two parties. Caps and floors entitle a purchaser to a principal amount from the seller of the cap or floor to the extent that a specified index exceeds or falls below a predetermined interest rate or amount. A Fund may enter into these transactions to manage its exposure to changing interest rates and other factors. 3-5, 8-9 Swaps and Related Swap Products
Part I - 12

 

Instrument Fund Code Part II
Section Reference
Synthetic Variable Rate Instruments: Instruments that generally involve the deposit of a long-term tax exempt bond in a custody or trust arrangement and the creation of a mechanism to adjust the long-term interest rate on the bond to a variable short-term rate and a right (subject to certain conditions) on the part of the purchaser to tender it periodically to a third party at par. 3, 5, 6, 8-9 Swaps and Related Swap Products
Temporary Defensive Positions: To respond to unusual circumstances, a Fund may invest in cash and cash equivalents for temporary defensive purposes. 1-9 Miscellaneous Investment Strategies and Risks
Treasury Receipts: A Fund may purchase interests in separately traded interest and principal component parts of U.S. Treasury obligations that are issued by banks or brokerage firms and that are created by depositing U.S. Treasury notes and U.S. Treasury bonds into a special account at a custodian bank. Receipts include Treasury Receipts (“TRs”), Treasury Investment Growth Receipts (“TIGRs”), and Certificates of Accrual on Treasury Securities (“CATS”). 1, 3-5, 8-9 Treasury Receipts
U.S. Government Agency Securities: Securities issued by agencies and instrumentalities of the U.S. government. These include all types of securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), including funding notes, subordinated benchmark notes, CMOs and REMICs. 1, 3-6, 8-9 Mortgage-Related
Securities
U.S. Government Obligations: May include direct obligations of the U.S. Treasury, including Treasury bills, notes and bonds, all of which are backed as to principal and interest payments by the full faith and credit of the United States, and separately traded principal and interest component parts of such obligations that are transferable through the Federal book-entry system known as Separate Trading of Registered Interest and Principal of Securities (“STRIPS”) and Coupon Under Book-Entry Safekeeping (“CUBES”). 1, 3-6, 8-9 U.S. Government
Obligations
Variable and Floating Rate Instruments: Obligations with interest rates which are reset daily, weekly, quarterly or some other frequency and which may be payable to the Fund on demand or at the expiration of a specified term. 3-5, 8 Debt Instruments
When-Issued Securities, Delayed Delivery Securities and Forward Commitments: Purchase or contract to purchase securities at a fixed price for delivery at a future date. 1, 3-6, 8-9 When-Issued
Securities, Delayed
Delivery Securities
and Forward
Commitments
Zero-Coupon, Pay-in-Kind and Deferred Payment Securities: Zero-coupon securities are securities that are sold at a discount to par value and on which interest payments are not made during the life of the security. Pay-in-kind securities are securities that have interest payable by delivery of additional securities. Deferred payment securities are zero-coupon debt securities which convert on a specified date to interest bearing debt securities. 3-5, 8 Debt Instruments
Part I - 13

 

INVESTMENT PRACTICES FOR THE INTERNATIONAL RESEARCH ENHANCED EQUITY FUND
Foreign Currency Transactions
Although the Fund has no current intention to do so, the Fund may write covered call options on up to 100% of the currencies in its portfolio to offset some of the costs of hedging against fluctuations in currency exchange rates.
The Fund will not speculate in foreign currency options, futures or related options or currency swap contracts. Accordingly, the Fund will not hedge a currency substantially in excess (as determined by the Adviser) of the market value of the securities denominated in such currency which they own, the expected acquisition price of securities which they have committed or anticipate to purchase which are denominated in such currency, and, in the cases of securities which have been sold by the Fund but not yet delivered, the proceeds thereof in its denominated currency. Further, the Fund will earmark and reserve, at its custodian or sub-custodians, U.S. government or other high quality liquid securities having a market value representing any subsequent net decrease in the market value of such hedged positions including net positions with respect to cross-currency hedges. The Fund may not incur potential net liabilities with respect to currency and securities positions, including net liabilities with respect to cross-currency hedges, of more than 33 13% of its total assets from foreign currency options, futures, related options and forward currency transactions.
For a more complete discussion see the “Foreign Investments (including Foreign Currencies)” section in Part II of this SAI.
The Funds' Investments
Inclusion of a security in the Morgan Stanley Capital International (“MSCI”) Europe, Australasia, Far East (“EAFE”) Index is not intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. The MSCI EAFE Index is determined, composed and calculated by MSCI without regard to the Fund. MSCI is neither a sponsor of, nor in any way affiliated with, the Fund. MSCI makes no representation or warranty, expressed or implied, on the advisability of investing in the Fund or as to the ability of the EAFE Index to track general stock market performance. “MSCI EAFE Index” is a service mark of MSCI.
Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com)
Limitations on the Use of Options. The Fund will limit the writing of put and call options to 25% of its net assets. Some Funds may enter into over-the-counter option transactions. There will be an active over-the-counter market for such options which will establish their pricing and liquidity.
Use of When-Issued Securities and Forward Commitments. The Fund intends to purchase “when issued” securities only for the purpose of acquiring portfolio securities, not for speculative purposes. Because the Fund will set aside cash or liquid portfolio securities to satisfy its purchase commitments in the manner described under the heading “When-Issued Securities, Delayed Delivery Securities and Forward Commitments” in Part II of this SAI, the Fund’s liquidity and the ability of its Adviser to manage the Fund might be affected in the event its commitments to purchase when-issued securities ever exceeded 40% of the value of its assets. Commitments to purchase when-issued securities will not, under normal market conditions, exceed 25% of the Fund’s total assets. The Fund may dispose of a when-issued security or forward commitment prior to settlement if the Fund’s Adviser deems it appropriate to do so.
Part I - 14

 

DIVERSIFICATION
JPMT I, JPMT II and JPMT IV are each a registered open-end investment company. Each Fund intends to meet the diversification requirement of the 1940 Act..
For a more complete discussion, see the “Diversification” section in Part II of this SAI.
QUALITY DESCRIPTION
At the time the Emerging Markets Equity Fund, International Equity Fund, International Hedged Equity Fund, International Research Enhanced Equity Fund, International Value Fund, Europe Dynamic Fund and the International Advantage Fund invest in any commercial paper, bank obligation or repurchase agreement, the issuer must have outstanding debt rated A or higher by Moody’s Investor Service Inc. (“Moody’s”) or Standard & Poor’s (“S&P”) and the issuer’s parent corporation, if any, must have outstanding commercial paper rated Prime-1 by Moody’s or A-1 by S&P, or if no such ratings are available, the investment must be of comparable quality in the Adviser’s opinion. At the time a Fund invests in any other short-term debt securities, they must be rated A or higher by Moody’s or S&P, or if unrated, the investment must be of comparable quality in the Adviser’s opinion.
In determining suitability of investment in a particular unrated security, the Adviser takes into consideration asset and debt service coverage, the purpose of the financing, history of the issuer, existence of other rated securities of the issuer, and other relevant conditions, such as comparability to other issuers.
PORTFOLIO TURNOVER
A portfolio turnover rate is, in summary, the percentage computed by dividing the lesser of a Fund’s purchases or sales of securities (excluding short-term securities) by the average market value of the Fund. The Adviser intends to manage each Fund’s assets by buying and selling securities to help attain its investment objective. A rate of 100% indicates that the equivalent of all of a Fund’s assets have been sold and reinvested in a year. Higher portfolio turnover may affect the amount, timing and character of distributions, and, as a result, may increase the amount of taxes payable by shareholders. High portfolio turnover also results in higher transaction costs. To the extent that net short-term capital gains are realized by a Fund, any distributions resulting from such gains are considered ordinary income for federal income tax purposes. For a more complete discussion, see the “Distributions and Tax Matters” section in Part II of this SAI.
The table below sets forth the Funds’ portfolio turnover rate for the two most recently completed fiscal years:
    Fiscal Year Ended October 31,
Fund   2019   2020
Emerging Markets Equity Fund   34%   15%
Emerging Markets Research Enhanced Equity Fund1   28%   47%
Europe Dynamic Fund   83%   159%
International Advantage Fund   74%   71%
International Equity Fund   25%   28%
International Focus Fund   34%   38%
International Hedged Equity Fund2   9%   85%
International Research Enhanced Equity Fund   22%   52%
International Value Fund   61%   59%
1 The Fund commenced operations on 12/11/2018.
2 The Fund commenced operations on 3/15/2019.
Part I - 15

 

TRUSTEES
Standing Committees
There are six standing committees of the Board of Trustees: the Audit and Valuation Committee, the Compliance Committee, the Governance Committee, the Equity Committee, the Fixed Income Committee and the Money Market and Alternative Products Committee. The following table shows how often each Committee met during the fiscal year ended October 31, 2020:
Committee   Fiscal Year Ended
October 31, 2020
Audit and Valuation Committee   4
Compliance Committee   4
Governance Committee   4
Equity Committee   5
Fixed Income Committee   5
Money Market and Alternative Products Committee   5
For a more complete discussion, see the “Trustees” section in Part II of this SAI.
Ownership of Securities
The following table shows the dollar range of each Trustee’s beneficial ownership of equity securities in the Funds and each Trustee’s aggregate dollar range of ownership in the J.P. Morgan Funds that the Trustee (each of whom is an Independent Trustee) oversees in the Family of Investment Companies as of December 31, 2020.
Name of Trustee   Ownership of
Emerging
Markets
Equity
Fund
  Ownership of
Emerging
Markets
Research
Enhanced
Equity Fund
  Ownership of
Europe
Dynamic
Fund
  Ownership of
International
Advantage
Fund
  Ownership of
International
Equity
Fund
  Ownership of
International
Focus
Fund
 
Independent Trustees                      
John F. Finn   None   None   None   None   None   Over $100,000  
Stephen P. Fisher   None   None   None   None   None   None  
Kathleen M. Gallagher   None   None   None   None   None   None  
Dennis P. Harrington   None   None   None   None   None   None  
Frankie D. Hughes   None   None   None   None   None   None  
Raymond Kanner   None   None   None   None   None   None  
Mary E. Martinez   None   None   None   None   None   None  
Marilyn McCoy   None   None   None   None   None   None  
Dr. Robert A. Oden, Jr.   None   None   None   None   None   None  
Marian U. Pardo   None   None   None   None   None   None  
    
Name of Trustee   Ownership of
International
Hedged
Equity
Fund
  Ownership of
International
Research
Enhanced
Equity
Fund
  Ownership of
International
Value Fund
  Aggregate
Dollar Range
of Equity
Securities in
All Registered
Investment
Companies
Overseen by
the Trustee
in the
Family of
Investment
Companies(1)(2)
Independent Trustees              
John F. Finn   None   None   None   Over
$100,000
Stephen P. Fisher   None   None   None   Over
$100,000
Kathleen M. Gallagher   None   None   None   Over $100,000
Dennis P. Harrington   None   None   None   Over
$100,000
Part I - 16

 

Name of Trustee   Ownership of
International
Hedged
Equity
Fund
  Ownership of
International
Research
Enhanced
Equity
Fund
  Ownership of
International
Value Fund
  Aggregate
Dollar Range
of Equity
Securities in
All Registered
Investment
Companies
Overseen by
the Trustee
in the
Family of
Investment
Companies(1)(2)
Frankie D. Hughes   None   None   None   Over
$100,000
Raymond Kanner   None   None   None   Over
$100,000
Mary E. Martinez   None   None   None   Over
$100,000
Marilyn McCoy   None   None   None   Over
$100,000
Dr. Robert A. Oden, Jr.   None   None   None   Over
$100,000
Marian U. Pardo   None   None   None   Over
$ 100,000
(1) A Family of Investment Companies means any two or more registered investment companies that share the same investment adviser or principal underwriter and hold themselves out to investors as related companies for purposes of investment and investor services. The Family of Investment Companies for which the Board of Trustees currently serves includes ten registered investment companies (128 J.P. Morgan Funds).
(2) For Mses. Gallagher and McCoy and Messrs. Finn, Fisher, Harrington, Kanner and Oden, these amounts include deferred compensation balances, as of 12/31/20, through participation in the J.P. Morgan Funds’ Deferred Compensation Plan for Eligible Trustees. For a more complete discussion, see the “Trustee Compensation” section in Part II of this SAI.
As of December 31, 2020, none of the Independent Trustees or their immediate family members owned securities of the Adviser or JPMDS or a person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with the Adviser or JPMDS.
Trustee Compensation
For the year ended December 31, 2020, the Funds of the J.P. Morgan Funds Complex overseen by the Trustees paid each Trustee an annual base fee of $395,000 (with the new Trustees receiving a pro rata portion of the base fee depending on when each became a Trustee). Committee chairs who are not already receiving an additional fee are each paid $50,000 annually in addition to their base fee. In addition to the base fee, the Funds pay the Chairman $225,000 annually and reimburse expenses of the Chairman in the amount of $4,000 per month. The Chairman receives no additional compensation for service as committee chair. In addition to the base fee, the Funds pay the Vice Chair $125,000 annually.
Trustee aggregate compensation paid by each Fund and the J.P. Morgan Funds Complex for the calendar year ended December 31, 2020, is set forth below:
Aggregate Trustee Compensation Paid by the Funds
Name of Trustee   Emerging
Markets
Equity
Fund
  Emerging
Markets
Research
Enhanced
Equity
Fund
  Europe
Dynamic
Fund
  International
Advantage
Fund
  International
Equity
Fund
Independent Trustees                    
John F. Finn   $6,049   $3,280   $2,297   $2,852   $3,402
Stephen P. Fisher   3,567   2,531   2,163   2,371   2,576
Kathleen M. Gallagher   3,566   2,531   2,163   2,371   2,576
Dennis P. Harrington   4,118   2,697   2,193   2,478   2,760
Frankie D. Hughes   3,567   2,531   2,163   2,371   2,576
Raymond Kanner   4,121   2,696   2,191   2,469   2,753
Peter C. Marshall4   3,566   2,531   2,163   2,371   2,576
Mary E. Martinez   4,376   2,782   2,207   2,530   2,849
Part I - 17

 

Name of Trustee   Emerging
Markets
Equity
Fund
  Emerging
Markets
Research
Enhanced
Equity
Fund
  Europe
Dynamic
Fund
  International
Advantage
Fund
  International
Equity
Fund
Marilyn McCoy   $3,567   $2,531   $2,163   $2,371   $2,576
Mitchell M. Merin6   4,118   2,697   2,193   2,478   2,760
Dr. Robert A. Oden, Jr.   3,824   2,616   2,178   2,423   2,666
Marian U. Pardo   4,118   2,697   2,193   2,478   2,760
    
Name of Trustee   International
Focus
Fund
  International
Hedged
Equity
Fund
  International
Research
Enhanced
Equity
Fund
  International
Value
Fund
  Total
Compensation
Paid From
Fund
Complex1
Independent Trustees                    
John F. Finn   $3,332   $2,130   $4,307   $2,223   $620,000
Stephen P. Fisher   2,550   2,101   2,915   2,136   395,000
Kathleen M. Gallagher   2,550   2,101   2,915   2,136   395,000 2
Dennis P. Harrington   2,724   2,107   3,224   2,155   445,000
Frankie D. Hughes   2,550   2,101   2,915   2,136   395,000
Raymond Kanner   2,718   2,107   3,209   2,153   445,000 3
Peter C. Marshall4   2,550   2,101   2,915   2,136   395,000 2
Mary E. Martinez   2,808   2,110   3,369   2,164   470,000
Marilyn McCoy   2,550   2,101   2,915   2,136   395,000 5
Mitchell M. Merin6   2,724   2,107   3,224   2,155   445,000
Dr. Robert A. Oden, Jr.   2,635   2,104   3,059   2,145   420,000
Marian U. Pardo   2,724   2,107   3,224   2,155   445,000
1 A Fund Complex means two or more registered investment companies that (i) hold themselves out to investors as related companies for purposes of investment and investor services or (ii) have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. The J.P. Morgan Funds Complex for which the Board of Trustees currently serves includes ten registered investment companies (128 Funds).
2 Includes $118,500 of Deferred Compensation.
3 Includes $445,000 of Deferred Compensation.
4 Mr. Marshall retired as a Trustee of the Trusts, effective 12/31/20.
5 Includes $395,000 of Deferred Compensation.
6 Mr. Merin retired as Trustee of the Trusts, effective 2/1/21. Mr. Merin will serve as a consultant to the Board of Trustees until 12/31/21 and, in that role, will receive a fee equivalent to the pro rata portion, for that period, of the annual base fee payable to Trustees.
For a more complete discussion, see the “Trustee Compensation” section in Part II of this SAI.
INVESTMENT ADVISER
Investment Advisory Fees
For the fiscal periods indicated, the Funds paid the following investment advisory fees to JPMIM and JPMIM waived investment advisory fees (amounts waived are in parentheses) (amounts in thousands):
    Fiscal Year Ended
    October 31, 2018   October 31, 2019   October 31, 2020
Fund   Paid   Waived   Paid   Waived   Paid   Waived
Emerging Markets Equity Fund   $35,392   $ (7,000)   $38,286   $(6,056)   $56,172   $(1,581)
Emerging Markets Research Enhanced Equity Fund1   N/A   N/A   703   (264)   5,589   (938)
Europe Dynamic Fund   5,933   (50)   3,663   (32)   2,870   (20)
International Advantage Fund   17,665   (3,570)   15,201   (3,505)   7,419   (1,286)
International Equity Fund   20,824   (10,215)   19,356   (6,261)   12,771   (1,941)
International Focus Fund   2,362   (1,255)   3,021   (1,112)   13,953   (2,684)
International Hedged Equity Fund2   N/A   N/A     (83)   7   (242)
International Research Enhanced Equity Fund   8,533   (2,406)   7,315   (1,704)   7,969   (1,937)
International Value Fund   3,294   (1,000)   1,877   (597)   1,324   (431)
1 The Fund commenced operations on 12/11/2018.
2 The Fund commenced operations on 3/15/2019.
Part I - 18

 

For a more complete discussion, see the “Investment Advisers and Sub-Advisers” section in Part II of this SAI.
Part I - 19

 

PORTFOLIO MANAGERS
Portfolio Managers' Other Accounts Managed*
The following table shows information regarding all of the other accounts for which advisory fees are not based on the performance of the accounts that are managed by each portfolio manager as of October 31, 2020:
  Non-Performance Based Fee Advisory Accounts
  Registered Investment
Companies
  Other Pooled Investment
Vehicles
  Other Accounts
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
Emerging Markets Equity Fund                    
Leon Eidelman 3   $ 1,636,471   11   $22,164,011   11   $6,587,572
Austin Forey 3   1, 636,471   11   22,164,011   11   6,587,572
Amit Mehta 2   1,186,223   5   2,462,810   1   574,723
Emerging Markets Research Enhanced Equity Fund                    
Anuj Arora 6   1,210,376   16   9,855,040   18   4,802,399
Lina Nassar 1   40,930   1   3,027,040   9   990,055
Europe Dynamic Fund                    
Jonathan Ingram 4   606,425   5   1,620,898   3   280,069
John Baker 4   606,425   7   1,577,632   3   280,069
Blake Crawford 4   606,425   4   981,244   3   280,069
International Advantage Fund                    
Zenah Shuhaiber 1   330,662   7   2,002,451   3   852,667
Richard Webb 0   0   6   2,429,452   0   0
Timothy Lewis 1   191,435   4   2,171,187   0   0
International Equity Fund                    
Thomas Murray 12   4,483,401   6   3,061,166   25   7,850,976
Shane Duffy 12   4,483,401   6   3,061,166   25   6,258,619
James Sutton 0   0   0   0   0   0
International Focus Fund                      
Shane Duffy 12   4,622,884   6   3,061,166   25   6,258,619
Thomas Murray 12   4,622,884   6   3,061,166   25   7,850,976
International Hedged Equity Fund                    
Hamilton Reiner 3   13,489,642   1   140,104   0   0
Piera Elisa Grassi 3   4,897,444   11   3,617,186   13   4,840,092
Nicholas Farserotu 3   4,938,157   7   2,158,023   12   4,840,091
Winnie Cheung 3   4,938,157   5   1,927,251   11   4,815,849
International Research Enhanced Equity Fund                
Piera Elisa Grassi 3   147,194   11   3,617,186   13   4,840,092
Nicholas Farserotu 3   232,087   7   2,158,023   12   4,840,091
Winnie Cheung 3   232,087   5   1,927,251   11   4,815,849
International Value Fund                    
Ian Butler 0   0   5   2,392,176   2   227,238
Thomas Buckingham 2   258,128   10   3,133,119   2   208,395
Kyle Williams 0   0   1   214,833   1   199,579
Michael Barakos 1   256,461   10   3,969715   0   0
The following table shows information on the other accounts managed by each portfolio manager that have advisory fees wholly or partly based on performance as of October 31, 2020:
  Performance Based Fee Advisory Accounts
  Registered Investment
Companies
  Other Pooled Investment
Vehicles
  Other Accounts
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
Emerging Markets Equity Fund                    
Part I - 20

 

  Performance Based Fee Advisory Accounts
  Registered Investment
Companies
  Other Pooled Investment
Vehicles
  Other Accounts
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
  Number
of
Accounts
  Total Assets
($thousands)
Leon Eidelman 0   $0   0   $ 0   4   $2,312,121
Austin Forey 0   0   1   1,425,782   5   2,490,420
Amit Mehta 0   0   1   1,425,782   0   0
Emerging Markets Research Enhanced Equity Fund                    
Anuj Arora 0   0   1   416,959   4   866,104
Lina Nassar 0   0   0   0   0   0
Europe Dynamic Fund                    
Jonathan Ingram 0   0   3   508.618   1   105,915
John Baker 0   0   3   509,372   1   105,915
Blake Crawford 0   0   1   150,684   1   105,915
International Advantage Fund                    
Zenah Shuhaiber 0   0   0   0   0   0
Richard Webb 0   0   0   0   0   0
Timothy Lewis 0   0   0   0   0   0
International Equity Fund                    
Thomas Murray 0   0   0   0   3   704,170
Shane Duffy 0   0   0   0   4   1,058,251
James Sutton 0   0   0   0   0   0
International Focus Fund                      
Shane Duffy 0   0   0   0   4   1,058,251
Thomas Murray 0   0   0   0   3   704,170
International Hedged Equity Fund                    
Hamilton Reiner 0   0   0   0   0   0
Piera Elisa Grassi 0   0   0   0   1   484,260
Nicholas Farserotu 0   0   0   0   1   484,260
Winnie Cheung 0   0   0   0   1   484,260
International Research Enhanced Equity Fund                
Piera Elisa Grassi 0   0   0   0   1   484,260
Nicholas Farserotu 0   0   0   0   1   484,260
Winnie Cheung 0   0   0   0   1   484,260
International Value Fund                    
Ian Butler 0   0   0   0   0   0
Thomas Buckingham 0   0   0   0   0   0
Kyle Williams 0   0   1   25,268   1   79,226
Michael Barakos 0   0   3   1,537,595   2   123,025
* The total value and number of accounts managed by a portfolio manager may include sub-accounts of asset allocation, multi-managed and other accounts.
Portfolio Managers' Ownership of Securities
The following table indicates for each Fund the dollar range of securities of each Fund beneficially owned by each portfolio manager, as of October 31, 2020. Aggregate Dollar Range, if applicable, includes the portfolio manager’s deferred compensation balance attributable to the Fund through participation in the Adviser’s deferred compensation plan. If applicable, this reflects an obligation of the Adviser to pay deferred compensation to the portfolio manager at a future date in an amount based on the performance of the Fund and accordingly, is the economic equivalent of an investment in Fund shares.
    Dollar Range of Securities in the Fund
Fund Name   None   $1-$10,000   $10,001-
$50,000
  $50,001-
$100,000
  $100,001-
$500,000
  $500,001-
$1,000,000
  Over
$1,000,000
Emerging Markets Equity Fund                            
Leon Eidelman                           X
Austin Forey(1)   X                        
Part I - 21

 

    Dollar Range of Securities in the Fund
Fund Name   None   $1-$10,000   $10,001-
$50,000
  $50,001-
$100,000
  $100,001-
$500,000
  $500,001-
$1,000,000
  Over
$1,000,000
Amit Mehta   X                        
Emerging Markets Research Enhanced Equity Fund                            
Anuj Arora(1)   X                        
Lina Nassar               X            
Europe Dynamic Fund                            
Jonathan Ingram(1)   X                        
John Baker(1)   X                        
Blake Crawford(1)   X                        
International Advantage Fund                            
Zenah Shuhaiber   X                        
Richard Webb   X                        
Timothy Lewis   X                        
International Equity Fund                            
Thomas Murray   X                        
Shane Duffy   X                        
James Sutton   X                        
International Focus                            
Fund                            
Shane Duffy(1)                           X
Thomas Murray   X                        
International Hedged Equity Fund                            
Hamilton Reiner       X                    
Piera Elisa Grassi   X                        
Nicholas Farserotu   X                        
Winnie Cheung   X                        
International Research Enhanced Equity                            
Fund                            
Piera Elisa Grassi   X                        
Nicholas Farserotu   X                        
Winnie Cheung   X                        
International Value Fund                            
Ian Butler                   X        
Thomas Buckingham                   X        
Kyle Williams           X                
Michael Barakos                       X    
(1) As of October 31, 2020, the portfolio manager beneficially owned shares of a fund for which he or she serves as a portfolio manager that has an investment strategy that is the same as or substantially similar to that of the Fund.
For a more complete discussion, see the “Portfolio Manager Compensation” section in Part II of this SAI.
Portfolio Managers' Compensation
In evaluating each portfolio manager’s performance with respect to the mutual funds he or she manages, the Adviser currently uses the following indices as benchmarks to evaluate the performance of the portfolio manager with respect to the Fund:
Name of Fund   Benchmark
Emerging Markets Equity Fund   MSCI Emerging Markets Index (net of foreign withholding taxes)
Emerging Markets Research Enhanced Equity Fund   MSCI Emerging Markets Index (net of foreign withholding taxes)
Europe Dynamic Fund   MSCI Europe Index (net of foreign withholding taxes)
International Advantage Fund   MSCI EAFE Index (net of foreign withholding taxes)
International Equity Fund   MSCI EAFE Index (net of foreign withholding taxes)
Part I - 22

 

Name of Fund   Benchmark
International Focus Fund   MSCI All Country World Index, ex-U.S. (net of foreign withholding taxes)
International Hedged Equity Fund   MSCI EAFE Index (net of foreign withholding taxes)
International Research Enhanced Equity Fund   MSCI EAFE Index (net of foreign withholding taxes)
International Value Fund   MSCI EAFE Value Index (net of foreign withholding taxes)
Please see “Portfolio Manager Compensation” section in Part II of this SAI for a description of the structure and method of determining the compensation of the portfolio managers identified in the Risk/Return Summary of the Prospectuses.
ADMINISTRATOR
Administrator Fees
The table below sets forth the administration services fees paid by the Funds to JPMIM (the amounts voluntarily waived are in parentheses) for the fiscal years indicated (amounts in thousands):
    Fiscal Year Ended
    October 31, 2018   October 31, 2019   October 31, 2020
Fund   Paid   Waived   Paid   Waived   Paid   Waived
Emerging Markets Equity Fund   $   $(4,045)   $ 776   $(3,416)   $5,485   $ (870)
Emerging Markets Research Enhanced Equity Fund1   N/A   N/A   149   (141)   1,394   (564)
Europe Dynamic Fund   747     441     361  
International Advantage Fund   599   (2,271)   379   (2,083)   495   (811)
International Equity Fund     (3,596)   296   (2,898)   975   (1,232)
International Focus Fund     (419)   29   (460)   349   (1,731)
International Hedged Equity Fund2   N/A   N/A     (25)   1   (74)
International Research Enhanced Equity Fund   3,048   (1,388)   2,453   (978)   2,675   (1,040)
International Value Fund   31   (550)   4   (316)   9   (230)
1 The Fund commenced operations on 12/11/2018.
2 The Fund commenced operations on 3/15/2019.
For a more complete discussion, see the “Administrator” section in Part II of this SAI.
FUND ACCOUNTING AGENT
Fund Accounting Fees
The table below sets forth the fund accounting fees paid by the Funds to JPMorgan Chase Bank, N.A. for the fiscal years indicated (amounts in thousands):
    Fiscal Year Ended
Fund   October 31, 2018   October 31, 2019   October 31, 2020
Emerging Markets Equity Fund   $ 102   $113   $224
Emerging Markets Research Enhanced Equity Fund1   N/A   22   72
Europe Dynamic Fund   20   20   20
International Advantage Fund   67   16   44
International Equity Fund   86   20   75
International Focus Fund   22   25   71
International Hedged Equity Fund2   N/A   8   20
International Research Enhanced Equity Fund   103   22   126
International Value Fund   24   24   20
1 The Fund commenced operations on 12/11/2018.
2 The Fund commenced operations on 3/15/2019.
For more information, see the “Custody and Fund Accounting Fees and Expenses” section in Part II of this SAI.
Part I - 23

 

SECURITIES LENDING ACTIVITIES
To the extent that any Funds engaged in securities lending during the fiscal year ended October 31, 2020, such Funds and information concerning the amounts of income and fees/compensation related to securities lending activities are described below:
  Emerging Markets
Equity Fund
  Emerging Markets
Research Enhanced
Equity Fund
  Europe
Dynamic Fund
  International
Advantage Fund
Gross Income from Securities Lending Activities1 $430,518   $222,362   $143,042   $246,610
Fees and/or Compensation for Securities Lending Activities              
Revenue Split2 24,731   12,799   10,922   15,336
Cash Collateral Management Fees3 45,851   16,456   6,348   14,677
Administrative Fees      
Indemnification Fees      
Rebates to Borrowers 53,949   41,117   3,857   39,709
Others Fees      
Aggregate Fees/Compensation for Securities Lending Activities 124,530   70,372   21,127   69,722
Net Income from the Securities Lending Activities 305,988   151,990   121,915   176,888
    
  International
Equity Fund
  International
Focus Fund
  International
Research Enhanced
Equity Fund
  International
Value Fund
Gross Income from Securities Lending Activities1 $578,514   $1,024,977   $447,952   $122,092
Fees and/or Compensation for Securities Lending Activities              
Revenue Split2 33,405   63,972   20,125   8,412
Cash Collateral Management Fees3 30,982   38,646   23,905   4,997
Administrative Fees      
Indemnification Fees      
Rebates to Borrowers 137,349   162,365   165,972   15,017
Others Fees      
Aggregate Fees/Compensation for Securities Lending Activities 201,736   264,983   210,001   28,426
Net Income from the Securities Lending Activities 376,778   759,995   237,951   93,666
1 Gross income includes income from the reinvestment of cash collateral, premium income (i.e. rebates paid by borrowers to the Fund), management fees from a pooled cash collateral reinvestment vehicle that are deducted from the vehicle's assets before income is distributed, and any other income.
2 Revenue split represents the share of revenue generated by securities lending program and paid to Citi.
3 Cash collateral is reinvested in certain JPMorgan money market funds that are advised by JPMIM (“money market funds”). Cash collateral management fees include the fees and expenses deducted from the money market funds. The contractual management fees are derived using the Total Annual Fund Operating Expenses after Fee Waivers and/or Expense Reimbursements from the money market funds’ most recently available prospectus. Actual fees incurred by the Money Market Funds may differ due to other expenses, fee waivers and expense reimbursements.
For more information, see the “Securities Lending Agent” section in Part II of this SAI.
DISTRIBUTOR
Compensation Paid to JPMDS
The following table describes the compensation paid by the Funds to the principal underwriter, JPMDS, for the fiscal year ended October 31, 2020 (amounts have been rounded to the nearest whole dollar):
Fund   Total
Underwriting
Discounts and
Commissions
  Compensation on
Redemptions and
Repurchases
  Brokerage
Commissions
  Other
Compensation*
Emerging Markets Equity Fund   $101,531   $42,180   $16   $1,879,379
Part I - 24

 

Fund   Total
Underwriting
Discounts and
Commissions
  Compensation on
Redemptions and
Repurchases
  Brokerage
Commissions
  Other
Compensation*
Emerging Markets Research Enhanced Equity Fund   $   $   $—   $
Europe Dynamic Fund   2,168   818   24   316,053
International Advantage Fund   1,012   951     303,450
International Equity Fund   99,670   16,075     851,150
International Hedged Equity Fund   715       2,925
International Research Enhanced Equity Fund   576   15   16   400,352
International Focus Fund   28,431   7,898     448,925
International Value Fund   28,059   4,321     425,652
* Fees paid by the Fund pursuant to Rule 12b-1 are provided in the “Distribution Fees” section below.
The following table sets forth the aggregate amount of underwriting commissions retained by JPMDS from the Funds with respect to the fiscal periods, as indicated below:
Fund   Fiscal Period Ended October 31,
2018   2019   2020
Emerging Markets Equity Fund   109,716   83,243   101,531
Emerging Markets Research Enhanced Equity Fund      
Europe Dynamic Fund   20,469   7,580   2,168
International Advantage Fund   1,761   1,967   1,012
International Equity Fund   72,875   98,091   99,670
International Hedged Equity Fund     1,052   715
International Research Enhanced Equity Fund   1,494   413   576
International Focus Fund   35,749   36,142   28,431
International Value Fund   60,419   34,431   28,059
             
For a more complete discussion, see the “Distributor” section in Part II of this SAI.
Distribution Fees
The table below sets forth the Rule 12b-1 fees that the Funds paid to JPMDS (waived amounts are in parentheses) with respect to the fiscal periods indicated (amounts in thousands).
    Fiscal Year Ended
    October 31, 2018   October 31, 2019   October 31, 2020
Fund   Paid   Waived   Paid   Waived   Paid   Waived
Emerging Markets Equity Fund
Class A Shares   $1,251   $   $1,082   $—   $1,395   $—
Class C Shares   405     385     473  
Class R2 Shares   —*     1     1  
Class R3 Shares   1     3     10  
Europe Dynamic Fund
Class A Shares   398     269     204  
Class C Shares   309     179     112  
International Advantage Fund
Class A Shares   511     383     163  
Class C Shares   14     11     8  
Class R2 Shares   126     155     132  
International Equity Fund
Class A Shares   708     683     746  
Class C Shares   170     126     92  
Class R2 Shares   11     8     13  
International Focus Fund
Class A Shares   226     239     316  
Class C Shares   188     149     126  
Class R2 Shares   3     5     7  
Part I - 25

 

    Fiscal Year Ended
    October 31, 2018   October 31, 2019   October 31, 2020
Fund   Paid   Waived