Form 497K J.P. Morgan Exchange-Tra
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Summary Prospectus October 4, 2021
JPMorgan Active Value ETF
Ticker: JAVA
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 October 4, 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 long-term capital
appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold and sell Shares of the Fund. You may pay other fees, such as brokerage commissions and other fees
to financial intermediaries, which are not reflected in the tables and examples below.
| ANNUAL FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the
value of your investment) | |
| Management Fees |
0.44% |
| Other Expenses |
None |
| Total Annual Fund Operating Expenses |
0.44 |
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The Fund’s management
agreement provides that the adviser will pay substantially all expenses of the Fund (including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses,
dividend and interest expenses related to short sales, taxes, acquired fund fees and expenses (other than fees
for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be
responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with
the Fund’s securities lending program, if applicable.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example does not take into account brokerage commissions that
you pay when purchasing or selling Shares of the Fund. The Example assumes that you invest $10,000 in the Fund
for the time periods indicated. The Example also assumes that your investment has a 5% return each year and
that the Fund’s operating expenses remain the same. Your actual costs may be higher or lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | ||
| |
1 Year |
3 Years |
| SHARES ($) |
45
|
141 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which
are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. The
Fund has not yet commenced operations as of the date of this prospectus. Therefore, there is no portfolio
turnover rate for the Fund to report at this time.
What are the Fund’s main investment strategies?
The adviser seeks to meet its objective by investing primarily in equities, including common stock, preferred
stock and bonds which are convertible to common stock, that the adviser identifies to be attractively valued
given their growth potential over a long-term time horizon. The securities held by the Fund will predominantly
be of companies with market capitalizations similar to those within the universe of the Russell 1000 Value
Index (which includes both large cap and mid cap companies). As of the reconstitution of the Russell 1000 Value
Index on June 25, 2021, the market capitalizations of the companies in the index ranged from approximately $742
million to $1.95 trillion.
The Fund may also invest significantly in real
estate investment trusts (REITs) and depositary receipts. Depositary receipts are financial instruments
representing a foreign company’s publicly traded securities. A depository receipt trades on a stock
exchange in a country different from the company’s local market.
Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can invest. To the
extent the Fund uses derivatives, the Fund will mainly use futures contracts to more effectively gain targeted
equity exposure from its cash positions.
Investment Process: The portfolio managers leverage the adviser’s U.S. Value strategy and the
adviser’s Large Cap Value strategy to construct a portfolio for the Fund. This portfolio is unique and
will be different from an investment in the two strategies directly. The adviser will invest in companies whose
securities are in the adviser’s opinion, undervalued when purchased, but which have the potential to
increase the intrinsic value per share. The “intrinsic value” of a stock is an expression of what
the adviser believes to be the stock’s true worth. The adviser employs a bottom-up approach to stock selection, constructing portfolios based on company fundamentals,
1
quantitative screening and proprietary fundamental analysis. The adviser's analysis includes a review of proprietary data, information self-reported by companies, data from third party
vendors and internal fundamental research. As a part of its investment process, the adviser seeks to assess the
impact of environmental, social and governance factors (including accounting and tax policies, disclosure and
investor communication, shareholder rights and remuneration policies) on the cash flows of many companies in
which it may invest to identify issuers that the adviser believes will be negatively impacted by such factors
relative to other issuers. These determinations may not be conclusive and securities of such issuers may be purchased and retained by the Fund.
The adviser may sell a security for several reasons. A security may be sold due to a change in the
company’s fundamentals or if the adviser believes the security is no longer attractively valued.
Investments may also be sold if the adviser identifies a stock that it believes offers a better investment opportunity.
The Fund’s investment strategies may involve active and frequent trading resulting in high portfolio turnover.
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.
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.
Value Investing Risk. A value stock may decrease in price or may not increase in price as anticipated by the adviser if other investors fail to recognize the company’s value or the factors that the adviser believes will cause the stock price to increase
do not occur.
Large Cap Company Risk. Because the Fund invests in large cap company securities, it may underperform other funds during periods when the Fund’s large cap securities are out of
favor.
Mid Cap Company Risk. Investments in mid cap companies may be riskier, less liquid, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. The securities of smaller
companies may trade less frequently and in smaller volumes than securities of larger companies. As a result,
share price changes may be more sudden or erratic than the prices of other equity securities, especially over
the short term.
Derivatives Risk. Derivatives, including futures, may be riskier than other types of investments and may increase the volatility of the Fund. Derivatives may be sensitive to changes in economic and market conditions and may create leverage, which could result in losses that significantly exceed the Fund’s original investment. The Fund may be more volatile
than if the Fund had not been leveraged because the leverage tends to exaggerate any effect on the value of the
Fund’s portfolio securities. Certain derivatives expose the Fund to counterparty risk, which is the risk
that the derivative counterparty will not fulfill its contractual obligations (and includes credit risk
associated with the counterparty). Certain derivatives are synthetic instruments that attempt to replicate the
performance of certain reference assets. With regard to such derivatives, the Fund does not have a claim on the
reference assets and is subject to enhanced counterparty risk. Derivatives may not perform as expected, so the
Fund may not realize the intended benefits. When used for hedging, the change in value of a
2
derivative may not correlate as
expected with the security or other risk being hedged. In addition, given their complexity, derivatives expose
the Fund to risks of mispricing or improper valuation.
Foreign Securities Risk. Investments in foreign issuers (including depositary receipts) are subject to additional risks, including political and economic risks, greater volatility, civil
conflicts and war, currency fluctuations, sanctions or other measures by the United States or other
governments, expropriation and nationalization risks, higher transaction costs, delayed settlement, possible
foreign controls on investment and less stringent investor protection and disclosure standards of foreign markets. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a
small number of industries. If foreign securities are denominated and traded in a foreign currency, the value
of the Fund’s foreign holdings can be affected by currency exchange rates and exchange control
regulations. In certain markets where securities and other instruments are not traded “delivery versus payment,” the Fund may not receive timely payment for securities or other instruments it has delivered or receive delivery of securities paid for and may be subject to increased risk that the counterparty will fail to make payments or delivery when
due or default completely. Events and evolving conditions in certain economies or markets may alter the risks
associated with investments tied to countries or regions that historically were perceived as comparatively
stable becoming riskier and more volatile.
Real Estate Securities Risk. The Fund’s investments in real estate securities, including REITs, are subject to the same risks as direct investments in real estate and mortgages, and their value will depend on the value of the underlying real estate
interests. These risks include default, prepayments, changes in value resulting from changes in interest rates
and demand for real and rental property, and the management skill and credit-worthiness 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.
Depositary Receipts Risk. The Fund’s investments may take the form of depositary receipts, including unsponsored depositary receipts. Unsponsored depositary receipts may not provide as
much information about the underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts. Unsponsored depositary receipts are issued by one or more depositaries in response to
market demand, but without a formal agreement with the company that issues the underlying
securities.
Industry and Sector Focus Risk. At times the Fund may increase the relative emphasis of its investments in a particular industry or sector. The prices of securities of issuers in a
particular industry or sector may be more susceptible to fluctuations due to changes in economic or business
conditions, government regulations, availability of basic resources or supplies, or other events that affect
that industry or sector more than securities of issuers in other industries and sectors. To the extent that the
Fund increases the relative emphasis of its investments in a particular industry or sector, its shares’
values may fluctuate in response to events affecting that industry or sector.
High Portfolio Turnover Risk. The Fund will likely engage in active and frequent trading leading to increased portfolio turnover, higher transaction costs, and the possibility of increased capital gains, including short-term capital gains that
will generally be taxable to shareholders as ordinary income.
Transactions Risk. The Fund could experience a loss and its liquidity may be negatively impacted when selling securities to meet redemption requests. The risk of loss increases if the
redemption requests are unusually large or frequent or occur in times of overall market turmoil or declining
prices. Similarly, large purchases of Fund shares may adversely affect the Fund’s performance to the
extent that the Fund is delayed in investing new cash and is required to maintain a larger cash position than
it ordinarily would.
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
The Fund has not commenced operations as of the date of this prospectus and therefore, has no reportable performance history.Once the Fund has operated for at least one calendar year, a bar chart and performance table will be included in the prospectus to show the performance of the Fund. When such information is included, this section will provide some indication
of the risks of investing in the Fund by showing changes in the Fund’s performance history from year to
year and showing how the Fund’s average annual total returns compare with those of a broad measure of
market performance.Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.
3
Management
J.P. Morgan Investment Management Inc. (the adviser)
| Portfolio Manager |
Managed the Fund Since |
Primary Title with
Investment Adviser |
| Scott Blasdell |
2021
|
Managing Director |
| Clare Hart |
2021
|
Managing Director |
| Andrew Brandon |
2021
|
Managing Director |
| David Silberman |
2021
|
Managing Director |
Purchase and Sale of Shares
Individual Shares of the Fund may only be purchased and sold in secondary market transactions through brokers
or financial intermediaries. Shares of the Fund are listed for trading on the Exchange, and because Shares
trade at market prices rather than NAV, Shares of the Fund may trade at a price greater than NAV (premium) or
less than NAV (discount). Certain affiliates of the Fund and the adviser may purchase and resell Shares
pursuant to this prospectus.
An investor may incur costs attributable to the difference between the highest price a buyer is willing to
pay to purchase Shares of the Fund (bid) and the lowest price a seller is willing to accept for Shares (ask)
when buying or selling Shares in the secondary market (the “bid-ask spread”).
Recent information, including
information about the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads (when
available), is included on the Fund’s website at jpmorganfunds.com.
Tax Information
To the extent the Fund makes distributions, those distributions will be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other
tax-advantaged investment plan, in which case you may be subject to federal income tax upon withdrawal from the
tax-advantaged investment plan.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase Shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the adviser and its related companies may pay the financial intermediary for
the sale of Shares and related services. These payments may create a conflict of interest by influencing the
broker-dealer or financial intermediary and your salesperson to recommend the Fund over another investment. Ask
your salesperson or visit your financial intermediary’s website for more information.
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SPRO-AV-ETF-1021
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